Question 1

An auditor need not abide by a particular auditing standard if the auditor believes that:

Accepted Answer

A) the issue in question is immaterial in amount. 
B) more expertise is needed to fulfill the requirement. 
C) the requirement of the standard has not been addressed by the PCAOB. 
D) any of the above three are correct. 
A) the issue in question is immaterial in amount. 
B) more expertise is needed to fulfill the requirement. 
C) the requirement of the standard has not been addressed by the PCAOB. 
D) any of the above three are correct.

Question 2

The SAS number identifies the order in which it was issued in relation to all other SASs.

Accepted Answer

A) True 
 B)False

Question 3

The legal right to perform audits is granted to a CPA firm by regulation of:

Accepted Answer

A) each state. 
B) the Financial Accounting Standards Board (FAS
B) . 
C) the American Institute of Certified Public Accountants (AICP
A) . 
D) the Audit Standards Board. 
A) each state. 
B) the Financial Accounting Standards Board (FAS
B) . 
C) the American Institute of Certified Public Accountants (AICP
A) . 
D) the Audit Standards Board.

Question 4

Which one of the following is not true regarding the American Institute of Certified Public Accountants peer review requirement?

Accepted Answer

A) A CPA firm must develop and adhere to quality control standards. 
B) Peer reviews are mandatory. 
C) A CPA firm will lose AICPA eligibility if a peer review is not performed. 
D) Firms required to be registered with and inspected by the PCAOB are exempt. 
A) A CPA firm must develop and adhere to quality control standards. 
B) Peer reviews are mandatory. 
C) A CPA firm will lose AICPA eligibility if a peer review is not performed. 
D) Firms required to be registered with and inspected by the PCAOB are exempt.

Question 5

Which of the following is not an essential component of quality control?

Accepted Answer

A) Policies and procedures to ensure that firm personnel are actively engaged in marketing strategies 
B) Policies and procedures to ensure that the work performed by firm personnel meet applicable professional standards 
C) Policies to ensure that personnel maintain their independence in fact and in appearance 
D) Policies that ensure that monitoring activities are effectively applied 
A) Policies and procedures to ensure that firm personnel are actively engaged in marketing strategies 
B) Policies and procedures to ensure that the work performed by firm personnel meet applicable professional standards 
C) Policies to ensure that personnel maintain their independence in fact and in appearance 
D) Policies that ensure that monitoring activities are effectively applied

Question 6

The Sarbanes-Oxley Act established the Public Company Accounting Oversight Board (PCAOB).What are the PCAOB's primary functions?

Accepted Answer

The PCAOB has responsibility for providi

Question 7

The Public Company Accounting Oversight Board (PCAOB)provides oversight to auditors of publicly traded and private companies.

Accepted Answer

A) True 
 B)False

Question 8

Which of the following statements is true as it relates to limited liability partnerships?

Accepted Answer

A) Only senior partners are liable for the partnership's debts. 
B) Partners have no liability in a limited liability partnership arrangement. 
C) Partners are personally liable for the acts of those under their supervision. 
D) All partners must be AICPA members. 
A) Only senior partners are liable for the partnership's debts. 
B) Partners have no liability in a limited liability partnership arrangement. 
C) Partners are personally liable for the acts of those under their supervision. 
D) All partners must be AICPA members.

Question 9

Statements on Auditing Standards issued by the AICPA's Auditing Standards Board are:

Accepted Answer

A) part of the generally accepted auditing standards under the AICPA Code of Professional Conduct. 
B) interpretations of generally accepted auditing standards and departures from such statements must be justified. 
C) interpretations of generally accepted auditing standards and such standards must be followed in every engagement. 
D) generally accepted auditing procedures that are not covered by the AICPA Code of Professional Conduct. 
A) part of the generally accepted auditing standards under the AICPA Code of Professional Conduct. 
B) interpretations of generally accepted auditing standards and departures from such statements must be justified. 
C) interpretations of generally accepted auditing standards and such standards must be followed in every engagement. 
D) generally accepted auditing procedures that are not covered by the AICPA Code of Professional Conduct.

Question 10

Requires annual inspections of accounting firms auditing > 100 issuers.

Accepted Answer

A) AICPA 
B) PCAOB 
C) Securities Exchange Commission 
D) Form 10-k 
E) IAASB
F)Form S-1
G)Due professional care
H)Limited Liability Partnership
I)Professional Corporation
J)Limited Liability Company
K)Peer review
L)1933 Securities Act
M)1934 Securities Act
N) Form 8-k
O) State Regulation
P) Code of Professional Conduct
Q) Quality Control Standards
R) GAAS Standards 
A) AICPA 
B) PCAOB 
C) Securities Exchange Commission 
D) Form 10-k 
E) IAASB
F)Form S-1
G)Due professional care
H)Limited Liability Partnership
I)Professional Corporation
J)Limited Liability Company
K)Peer review
L)1933 Securities Act
M)1934 Securities Act
N) Form 8-k
O) State Regulation
P) Code of Professional Conduct
Q) Quality Control Standards
R) GAAS Standards

Question 11

Hansen Corporation's stock is listed on a national stock exchange and registered with the Securities and Exchange Commission.Hansen's management hires a CPA to perform an independent audit of Hansen's financial statements.The primary objective of this audit is to provide assurance to the:

Accepted Answer

A) investors in Hansen Corporation's stock. 
B) stock exchange. 
C) Securities and Exchange Commission. 
D) management of Hansen Corporation. 
A) investors in Hansen Corporation's stock. 
B) stock exchange. 
C) Securities and Exchange Commission. 
D) management of Hansen Corporation.

Question 12

The International Standards on Auditing (ISAs):

Accepted Answer

A) are issued by the AICPA. 
B) override a country's regulations governing the audit of a company. 
C) has many of the same standards as the Auditing Standards Board (AS
B) . 
D) must be followed by companies whose stock is traded in the U.S. 
A) are issued by the AICPA. 
B) override a country's regulations governing the audit of a company. 
C) has many of the same standards as the Auditing Standards Board (AS
B) . 
D) must be followed by companies whose stock is traded in the U.S.

Question 13

List and describe the six organizational structures available to CPA firms.

Accepted Answer

CPA firms can take one of six organizati

Question 14

Within the context of quality control, the primary purpose of continuing professional education and training activities is to enable a CPA firm to provide its personnel with:

Accepted Answer

A) technical training that assures proficiency as a valuation expert. 
B) professional education that is required in order to perform with due professional care. 
C) knowledge required to fulfill assigned responsibilities. 
D) knowledge required to perform a peer review. 
A) technical training that assures proficiency as a valuation expert. 
B) professional education that is required in order to perform with due professional care. 
C) knowledge required to fulfill assigned responsibilities. 
D) knowledge required to perform a peer review.

Question 15

The overall purpose of the Securities and Exchange Commission is to assist in providing investors with reliable information upon which to make investment decisions.

Accepted Answer

A) True 
 B)False

Question 16

Members of the Public Company Accounting Oversight Board are appointed and overseen by:

Accepted Answer

A) the U.S.Congress. 
B) the American Institute of Certified Public Accountants. 
C) the Auditing Standards Board. 
D) the Securities and Exchange Commission. 
A) the U.S.Congress. 
B) the American Institute of Certified Public Accountants. 
C) the Auditing Standards Board. 
D) the Securities and Exchange Commission.

Question 17

Which of the following is a true statement regarding auditing standards?

Accepted Answer

A) Prior to the passage of Sarbanes-Oxley, the FASB established auditing principles for U.S.public companies. 
B) PCAOB auditing standards are applicable to entities outside the U.S. 
C) There are no similarities between PCAOB standards and International Standards on Auditing. 
D) The Auditing Standards Board has revised most of its standards to converge with the international standards. 
A) Prior to the passage of Sarbanes-Oxley, the FASB established auditing principles for U.S.public companies. 
B) PCAOB auditing standards are applicable to entities outside the U.S. 
C) There are no similarities between PCAOB standards and International Standards on Auditing. 
D) The Auditing Standards Board has revised most of its standards to converge with the international standards.

Question 18

What are the major functions of the AICPA?

Accepted Answer

Major functions of the AICPA include:
•E

Question 19

A report that is filed when a company wishes to issue new securities.

Accepted Answer

A) AICPA 
B) PCAOB 
C) Securities Exchange Commission 
D) Form 10-k 
E) IAASB
F)Form S-1
G)Due professional care
H)Limited Liability Partnership
I)Professional Corporation
J)Limited Liability Company
K)Peer review
L)1933 Securities Act
M)1934 Securities Act
N) Form 8-k
O) State Regulation
P) Code of Professional Conduct
Q) Quality Control Standards
R) GAAS Standards 
A) AICPA 
B) PCAOB 
C) Securities Exchange Commission 
D) Form 10-k 
E) IAASB
F)Form S-1
G)Due professional care
H)Limited Liability Partnership
I)Professional Corporation
J)Limited Liability Company
K)Peer review
L)1933 Securities Act
M)1934 Securities Act
N) Form 8-k
O) State Regulation
P) Code of Professional Conduct
Q) Quality Control Standards
R) GAAS Standards

Question 20

Oversees accounting firms who audit public companies.

Accepted Answer

A) AICPA 
B) PCAOB 
C) Securities Exchange Commission 
D) Form 10-k 
E) IAASB
F)Form S-1
G)Due professional care
H)Limited Liability Partnership
I)Professional Corporation
J)Limited Liability Company
K)Peer review
L)1933 Securities Act
M)1934 Securities Act
N) Form 8-k
O) State Regulation
P) Code of Professional Conduct
Q) Quality Control Standards
R) GAAS Standards 
A) AICPA 
B) PCAOB 
C) Securities Exchange Commission 
D) Form 10-k 
E) IAASB
F)Form S-1
G)Due professional care
H)Limited Liability Partnership
I)Professional Corporation
J)Limited Liability Company
K)Peer review
L)1933 Securities Act
M)1934 Securities Act
N) Form 8-k
O) State Regulation
P) Code of Professional Conduct
Q) Quality Control Standards
R) GAAS Standards

Exam 2: The Cpa Profession

An auditor need not abide by a particular auditing standard if the auditor believes that:

The SAS number identifies the order in which it was issued in relation to all other SASs.

The legal right to perform audits is granted to a CPA firm by regulation of:

Which one of the following is not true regarding the American Institute of Certified Public Accountants peer review requirement?

Which of the following is not an essential component of quality control?

The Sarbanes-Oxley Act established the Public Company Accounting Oversight Board (PCAOB).What are the PCAOB's primary functions?

The Public Company Accounting Oversight Board (PCAOB)provides oversight to auditors of publicly traded and private companies.

Which of the following statements is true as it relates to limited liability partnerships?

Statements on Auditing Standards issued by the AICPA's Auditing Standards Board are:

Requires annual inspections of accounting firms auditing > 100 issuers.

Hansen Corporation's stock is listed on a national stock exchange and registered with the Securities and Exchange Commission.Hansen's management hires a CPA to perform an independent audit of Hansen's financial statements.The primary objective of this audit is to provide assurance to the:

The International Standards on Auditing (ISAs):

List and describe the six organizational structures available to CPA firms.

Within the context of quality control, the primary purpose of continuing professional education and training activities is to enable a CPA firm to provide its personnel with:

The overall purpose of the Securities and Exchange Commission is to assist in providing investors with reliable information upon which to make investment decisions.

Members of the Public Company Accounting Oversight Board are appointed and overseen by:

Which of the following is a true statement regarding auditing standards?

What are the major functions of the AICPA?

A report that is filed when a company wishes to issue new securities.

Oversees accounting firms who audit public companies.

The Demand for Audit and Other Assurance Services

Audit Reports

Professional Ethics

Legal Liability

Audit Responsibilities and Objectives

Audit Evidence

Audit Planning and Analytical Procedures

Materiality and Risk

Internal Control, Control Risk, and Section 404 Audits

Fraud Auditing

The Impact of Information Technology on the Audit Process

Overall Audit Strategy and Audit Program

Audit of the Sales and Collection Cycle: Tests of Controls and Substantive Tests of Transactions

Audit Sampling for Tests of Controls and Substantive Tests of Transactions

Completing the Tests in the Sales and Collection Cycle: Accounts Receivable

Audit Sampling for Tests of Details of Balances

Audit of the Acquisition and Payment Cycle: Tests of Controls, Substantive Tests of Transactions, and Accounts Payable

Completing the Tests in the Acquisition and Payment Cycle: Verification of Selected Accounts

Audit of the Payroll and Personnel Cycle

Audit of the Inventory and Warehousing Cycle

Audit of the Capital Acquisition and Repayment Cycle

Audit of Cash and Financial Instruments

Completing the Audit

Other Assurance Services

Internal and Governmental Financial Auditing and Operational Auditing

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