Exam 2: The Audit Standards Setting Process

Limited liability companies are structured and taxed like a general partnership,but their owners have limited personal liability similar to that of a general corporation.

Listed below are policies or procedures that the Crystal Cove audit firm has in place.For each identified policy or procedure state if it is a Generally Accepted Audit Standard (GAAS)or a Quality Control Standard.

Which of the following is not one of the responsibilities of an auditor under the principles underlying an audit?

Standards issued by the Public Company Accounting Oversight Board must be followed by CPAs who audit:

The "Principles Underlying an Audit in Accordance with Generally Accepted Auditing Principles" provides a framework to help auditors:

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

In order to properly plan and perform an audit,an important fact for both the auditor and the client to understand is that:

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

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

Membership in the AICPA is mandatory for all licensed practicing CPAs.

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

The organization that is responsible for providing oversight for auditors of public companies is called the ________.

Professional skepticism must be maintained only if the auditor suspects fraud.

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

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

Sarbanes-Oxley and the Securities Exchange Commission restrict auditors from providing many consulting services to their publicly traded audit clients.

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

Which of the following are audit standards used in professional practice by audit firms?

The following are definitions of terms that are listed on the right.Match the definition with its associated term.Each term can be used once,more than once or not at all.

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