Question 1

What does ISA 700 say about the interpretation of an audit opinion?

Accepted Answer

A) It enhances the credibility of the financial statements of corporation. 
B) It guarantees the future viability of the corporation. 
C) It assures readers that no errors have been made in the financial statements. 
D) It tells shareholders that management has operated the corporation efficiently. 
A) It enhances the credibility of the financial statements of corporation. 
B) It guarantees the future viability of the corporation. 
C) It assures readers that no errors have been made in the financial statements. 
D) It tells shareholders that management has operated the corporation efficiently. A

Question 2

Which of the following is NOT a factor influencing the probability that an auditor will detect an accounting error?

Accepted Answer

A) Competence of the auditor 
B) Quality review and monitoring 
C) Financial reporting requirements 
D) Independence of the auditor 
A) Competence of the auditor 
B) Quality review and monitoring 
C) Financial reporting requirements 
D) Independence of the auditor D

Question 3

Auditors in the United Kingdom often include disclaimers of liability in their audit reports.According to the U.S.Securities and Exchange Commission, how effective is this approach to limiting civil liabilities?

Accepted Answer

A) It will have no effect when included in the financial statements of U.S.companies. 
B) It effectively caps the damage awards that will be made in U.S.civil courts. 
C) It limits who can bring civil action in cases involving the audit of U.S.companies. 
D) It limits both civil and criminal liability against auditors of U.S.companies. 
A) It will have no effect when included in the financial statements of U.S.companies. 
B) It effectively caps the damage awards that will be made in U.S.civil courts. 
C) It limits who can bring civil action in cases involving the audit of U.S.companies. 
D) It limits both civil and criminal liability against auditors of U.S.companies. A

Question 4

What is the primary role of external auditing in multinational corporations?

Accepted Answer

A) Preparing the annual report to corporate shareholders 
B) Designing a working system of internal accounting controls 
C) Assuring that financial statement information is high quality 
D) Selecting independent members for the board of directors 
A) Preparing the annual report to corporate shareholders 
B) Designing a working system of internal accounting controls 
C) Assuring that financial statement information is high quality 
D) Selecting independent members for the board of directors

Question 5

What reason can be given for the importance of internal auditing in multinational corporations?

Accepted Answer

A) A serious lack of external auditors available to audit an international company 
B) A growing demand for risk management skills possessed by internal auditors 
C) Reluctance by multinational corporations to hire external auditors to comply with international regulations 
D) Decline in the reputation of external auditors 
A) A serious lack of external auditors available to audit an international company 
B) A growing demand for risk management skills possessed by internal auditors 
C) Reluctance by multinational corporations to hire external auditors to comply with international regulations 
D) Decline in the reputation of external auditors

Question 6

What is the focus of Section 404 of the Sarbanes-Oxley Act?

Accepted Answer

A) Requirement that all members of the board of directors be independent of the corporation. 
B) It addresses the need for a consistent set of international auditing standards. 
C) Attesting to the reliability of internal controls in the annual report. 
D) This defines the membership in the Public Company Accounting Oversight Board (PCAO
B) . 
A) Requirement that all members of the board of directors be independent of the corporation. 
B) It addresses the need for a consistent set of international auditing standards. 
C) Attesting to the reliability of internal controls in the annual report. 
D) This defines the membership in the Public Company Accounting Oversight Board (PCAO
B) .

Question 7

What is the first line of enforcement of legal and professional financial reporting standards?

Accepted Answer

A) Prosecuting attorney 
B) International Accounting Standards Board 
C) Local civil court system in the home country 
D) External auditing 
A) Prosecuting attorney 
B) International Accounting Standards Board 
C) Local civil court system in the home country 
D) External auditing

Question 8

A recent survey of multinational corporations found that the Sarbanes-Oxley Act had the effect of increasing the percentage of U.S.companies with a financial expert on the audit committee from 65% to:

Accepted Answer

A) 67% 
B) 70% 
C) 75% 
D) 95% 
A) 67% 
B) 70% 
C) 75% 
D) 95%

Question 9

An auditor may be subject to criminal liability under which of the following situations?

Accepted Answer

A) He/she willingly participates in defrauding the company's stockholders. 
B) He/she breaks a contract with the client. 
C) He/she violates a rule on the manner of advertising allowed by the professional accounting and auditing association. 
D) None of the above 
A) He/she willingly participates in defrauding the company's stockholders. 
B) He/she breaks a contract with the client. 
C) He/she violates a rule on the manner of advertising allowed by the professional accounting and auditing association. 
D) None of the above

Question 10

In multinational corporations, to whom are the external auditors responsible according to OECD guidelines?

Accepted Answer

A) Corporate management 
B) Shareholders 
C) Government of the host country 
D) Creditors 
A) Corporate management 
B) Shareholders 
C) Government of the host country 
D) Creditors

Question 11

Which of the following is the responsibility of an audit committee?

Accepted Answer

A) Oversee the internal control systems 
B) Oversee internal auditing and the independent public accounting function 
C) Monitor the financial reporting process 
D) All of the above 
A) Oversee the internal control systems 
B) Oversee internal auditing and the independent public accounting function 
C) Monitor the financial reporting process 
D) All of the above

Question 12

The Canadian Institute of Chartered Accountants (CICA) has taken a principles-based approach to auditor independence, whereas the Federation des Experts Comptables Europeens (FEE) has taken a conceptual approach.What is the difference?

Accepted Answer

A) The principles-based approach has been effective, but the conceptual approach has not. 
B) The principles-based approach offers more flexibility in compliance than the conceptual approach does. 
C) The principles-based approach gives specific rules and prohibitions that must be followed, but the conceptual approach asks auditors to focus on the aim of independence rather than rules. 
D) The conceptual approach is only theoretical and hasn't yet been applied, whereas the principles-based approach is currently in practice. 
A) The principles-based approach has been effective, but the conceptual approach has not. 
B) The principles-based approach offers more flexibility in compliance than the conceptual approach does. 
C) The principles-based approach gives specific rules and prohibitions that must be followed, but the conceptual approach asks auditors to focus on the aim of independence rather than rules. 
D) The conceptual approach is only theoretical and hasn't yet been applied, whereas the principles-based approach is currently in practice.

Question 13

What reason has been given to explain the lack of well-developed auditing professions in less developed economies?

Accepted Answer

A) Inability to train auditors given the lack of educational systems. 
B) Since creditors and investors are not major players in these economies, there is little need for audited financial statements. 
C) Investors and creditors in these countries do not want external auditors attesting to financial statement reliability. 
D) In these cultures, financial statements are presumed to be accurate and therefore do not require independent audits. 
A) Inability to train auditors given the lack of educational systems. 
B) Since creditors and investors are not major players in these economies, there is little need for audited financial statements. 
C) Investors and creditors in these countries do not want external auditors attesting to financial statement reliability. 
D) In these cultures, financial statements are presumed to be accurate and therefore do not require independent audits.

Question 14

In what countries would one expect auditing standards to evolve based on the needs perceived by the auditing profession?

Accepted Answer

A) Code law countries 
B) Members of the European Union 
C) Countries that follow common law 
D) Countries with strong accounting laws 
A) Code law countries 
B) Members of the European Union 
C) Countries that follow common law 
D) Countries with strong accounting laws

Question 15

Who is considered to be the client for external auditors in the United Kingdom?

Accepted Answer

A) Corporate shareholders 
B) The government 
C) Society as a whole 
D) All of the above 
A) Corporate shareholders 
B) The government 
C) Society as a whole 
D) All of the above

Question 16

Why was the issuance of International Standard on Auditing 13 (ISA 13) considered so important to harmonization of auditing standards?

Accepted Answer

A) It required all multinational corporations to adopt international auditing standards by 2008. 
B) It specified the form and content of the annual report. 
C) It provided guidance on the form and content of the audit report. 
D) It requires the auditor to express an opinion on whether the statements give a true and fair view of corporate performance. 
A) It required all multinational corporations to adopt international auditing standards by 2008. 
B) It specified the form and content of the annual report. 
C) It provided guidance on the form and content of the audit report. 
D) It requires the auditor to express an opinion on whether the statements give a true and fair view of corporate performance.

Question 17

Which of the following is NOT a concern identified in the 2008 IFAC report "Financial Reporting Supply Chain-Current Perspectives and Directions"?

Accepted Answer

A) Governance in name, but not in spirit 
B) Overregulation 
C) The development of a checklist mentality 
D) Trend towards less disclosure and transparency in business and financial reporting 
A) Governance in name, but not in spirit 
B) Overregulation 
C) The development of a checklist mentality 
D) Trend towards less disclosure and transparency in business and financial reporting

Question 18

According to OECD principles, what group is ultimately responsible for governing a multinational organization?

Accepted Answer

A) Regulatory agencies in the host country 
B) Regulatory agencies in the home country 
C) Board of directors 
D) Common shareholders 
A) Regulatory agencies in the host country 
B) Regulatory agencies in the home country 
C) Board of directors 
D) Common shareholders

Question 19

What is the position of the U.S.Securities and Exchange Commission (SEC) with respect to internal auditing?

Accepted Answer

A) It requires all companies, including foreign enterprises, listed on U.S.stock exchanges to have an internal audit function. 
B) Since 2000, the SEC has been silent with respect to internal auditing. 
C) Internal auditing is recommended by the SEC, but it is not required for listed companies. 
D) Only multinational companies are required to have internal auditing systems. 
A) It requires all companies, including foreign enterprises, listed on U.S.stock exchanges to have an internal audit function. 
B) Since 2000, the SEC has been silent with respect to internal auditing. 
C) Internal auditing is recommended by the SEC, but it is not required for listed companies. 
D) Only multinational companies are required to have internal auditing systems.

Question 20

Under the Sarbanes-Oxley Act of 2002, to whom does the audit committee report?

Accepted Answer

A) Management of the corporation 
B) External auditor 
C) Board of directors 
D) Internal audit department 
A) Management of the corporation 
B) External auditor 
C) Board of directors 
D) Internal audit department

What does ISA 700 say about the interpretation of an audit opinion?

Which of the following is NOT a factor influencing the probability that an auditor will detect an accounting error?

Auditors in the United Kingdom often include disclaimers of liability in their audit reports.According to the U.S.Securities and Exchange Commission, how effective is this approach to limiting civil liabilities?

What is the primary role of external auditing in multinational corporations?

What reason can be given for the importance of internal auditing in multinational corporations?

What is the focus of Section 404 of the Sarbanes-Oxley Act?

What is the first line of enforcement of legal and professional financial reporting standards?

A recent survey of multinational corporations found that the Sarbanes-Oxley Act had the effect of increasing the percentage of U.S.companies with a financial expert on the audit committee from 65% to:

An auditor may be subject to criminal liability under which of the following situations?

In multinational corporations, to whom are the external auditors responsible according to OECD guidelines?

Which of the following is the responsibility of an audit committee?

The Canadian Institute of Chartered Accountants (CICA) has taken a principles-based approach to auditor independence, whereas the Federation des Experts Comptables Europeens (FEE) has taken a conceptual approach.What is the difference?

What reason has been given to explain the lack of well-developed auditing professions in less developed economies?

In what countries would one expect auditing standards to evolve based on the needs perceived by the auditing profession?

Who is considered to be the client for external auditors in the United Kingdom?

Why was the issuance of International Standard on Auditing 13 (ISA 13) considered so important to harmonization of auditing standards?

Which of the following is NOT a concern identified in the 2008 IFAC report "Financial Reporting Supply Chain-Current Perspectives and Directions"?

According to OECD principles, what group is ultimately responsible for governing a multinational organization?

What is the position of the U.S.Securities and Exchange Commission (SEC) with respect to internal auditing?

Under the Sarbanes-Oxley Act of 2002, to whom does the audit committee report?

Introduction to International Accounting

Worldwide Accounting Diversity

International Convergence of Financial Reporting

International Financial Reporting Standards: Part I

International Financial Reporting Standards: Part II

Comparative Accounting

Foreign Currency Transactions and Hedging Foreign Exchange Risk

Translation of Foreign Currency Financial Statements

Additional Financial Reporting Issues

Analysis of Foreign Financial Statements

International Taxation

International Transfer Pricing

Strategic Accounting Issues in Multinational Corporations

International Corporate Social Reporting

Filters

Exam 14: Comparative International Auditing and Corporate Governance

What does ISA 700 say about the interpretation of an audit opinion?

Which of the following is NOT a factor influencing the probability that an auditor will detect an accounting error?

Auditors in the United Kingdom often include disclaimers of liability in their audit reports.According to the U.S.Securities and Exchange Commission, how effective is this approach to limiting civil liabilities?

What is the primary role of external auditing in multinational corporations?

What reason can be given for the importance of internal auditing in multinational corporations?

What is the focus of Section 404 of the Sarbanes-Oxley Act?

What is the first line of enforcement of legal and professional financial reporting standards?

A recent survey of multinational corporations found that the Sarbanes-Oxley Act had the effect of increasing the percentage of U.S.companies with a financial expert on the audit committee from 65% to:

An auditor may be subject to criminal liability under which of the following situations?

In multinational corporations, to whom are the external auditors responsible according to OECD guidelines?

Which of the following is the responsibility of an audit committee?

The Canadian Institute of Chartered Accountants (CICA) has taken a principles-based approach to auditor independence, whereas the Federation des Experts Comptables Europeens (FEE) has taken a conceptual approach.What is the difference?

What reason has been given to explain the lack of well-developed auditing professions in less developed economies?

In what countries would one expect auditing standards to evolve based on the needs perceived by the auditing profession?

Who is considered to be the client for external auditors in the United Kingdom?

Why was the issuance of International Standard on Auditing 13 (ISA 13) considered so important to harmonization of auditing standards?

Which of the following is NOT a concern identified in the 2008 IFAC report "Financial Reporting Supply Chain-Current Perspectives and Directions"?

According to OECD principles, what group is ultimately responsible for governing a multinational organization?

What is the position of the U.S.Securities and Exchange Commission (SEC) with respect to internal auditing?

Under the Sarbanes-Oxley Act of 2002, to whom does the audit committee report?

Introduction to International Accounting

Worldwide Accounting Diversity

International Convergence of Financial Reporting

International Financial Reporting Standards: Part I

International Financial Reporting Standards: Part II

Comparative Accounting

Foreign Currency Transactions and Hedging Foreign Exchange Risk

Translation of Foreign Currency Financial Statements

Additional Financial Reporting Issues

Analysis of Foreign Financial Statements

International Taxation

International Transfer Pricing

Strategic Accounting Issues in Multinational Corporations

International Corporate Social Reporting

Filters