Question 1

An assurance engagement is one in which a CA is engaged to ________.

Accepted Answer

A) issue a written communication expressing a conclusion concerning a subject matter for which an accountable party is responsible 
B) provide tax advice or prepare a tax return based on financial information the CA has not audited or reviewed 
C) testify as an expert witness in accounting,auditing,or tax matters,given certain stipulated facts 
D) assemble prospective financial statements based on the assumptions of the entity's management without expressing any assurance 
A) issue a written communication expressing a conclusion concerning a subject matter for which an accountable party is responsible 
B) provide tax advice or prepare a tax return based on financial information the CA has not audited or reviewed 
C) testify as an expert witness in accounting,auditing,or tax matters,given certain stipulated facts 
D) assemble prospective financial statements based on the assumptions of the entity's management without expressing any assurance A

Question 2

Three-Party Accountability includes all of the following parties except ________.

Accepted Answer

A) users 
B) practitioners 
C) Audit Committee 
D) management 
A) users 
B) practitioners 
C) Audit Committee 
D) management C

Question 3

The fourth reporting standard requires the audit report to comment on the consistency of the accounting principles used in preparing the financial statements.

Accepted Answer

A) True 
 B)False  False

Question 4

Audit committees monitor management's financial reporting responsibilities.

Accepted Answer

A) True 
 B)False

Question 5

All of the following are examples of assurance engagements except ________.

Accepted Answer

A) tax planning 
B) financial statements audit 
C) internal controls statement 
D) financial statements review 
A) tax planning 
B) financial statements audit 
C) internal controls statement 
D) financial statements review

Question 6

A prospectus is the information,usually including financial information,about a firm that accompanies any new issuance of shares in a regulated securities market.

Accepted Answer

A) True 
 B)False

Question 7

Reliance on self-regulation of the accounting profession has changed as a result of its perceived failure to detect the problems leading to the corporate scandals of 2002/2003.

Accepted Answer

A) True 
 B)False

Question 8

Auditors try to achieve independence in appearance in order to ________.

Accepted Answer

A) maintain public confidence in the profession 
B) become independent in appearance and in fact 
C) comply with the generally accepted auditing standards 
D) maintain an unbiased mental attitude 
A) maintain public confidence in the profession 
B) become independent in appearance and in fact 
C) comply with the generally accepted auditing standards 
D) maintain an unbiased mental attitude

Question 9

Practice inspection is something a new auditor does as part of his or her training program.

Accepted Answer

A) True 
 B)False

Question 10

According to IFAC,which of the following is not one of the elements of quality control?

Accepted Answer

A) Independence. 
B) Supervision. 
C) Acceptance and continuance of clients. 
D) Due professional care. 
A) Independence. 
B) Supervision. 
C) Acceptance and continuance of clients. 
D) Due professional care.

Question 11

According to GAAS,the overall objective of a financial statement audit is ________.

Accepted Answer

A) to enable the auditor to express an opinion as to whether the financial statements are prepared in accordance with generally accepted accounting principles 
B) to reduce audit risk to an acceptably low level 
C) to determine whether the financial principles adopted by management in preparing the financial statements are acceptable 
D) to obtain reasonable assurance that the financial statements taken as a whole are free from misstatement,whether due to fraud or error 
A) to enable the auditor to express an opinion as to whether the financial statements are prepared in accordance with generally accepted accounting principles 
B) to reduce audit risk to an acceptably low level 
C) to determine whether the financial principles adopted by management in preparing the financial statements are acceptable 
D) to obtain reasonable assurance that the financial statements taken as a whole are free from misstatement,whether due to fraud or error

Question 12

The CICA Handbook recommendations are a step-by-step list of procedures auditors have to complete for each engagement.

Accepted Answer

A) True 
 B)False

Question 13

A report giving conclusions about a firm's compliance with quality control standards is typical of which of the following?

Accepted Answer

A) Practice inspection. 
B) Quality inspection. 
C) Peer review. 
D) Quality review. 
A) Practice inspection. 
B) Quality inspection. 
C) Peer review. 
D) Quality review.

Question 14

The assessment of materiality has a pervasive impact on the audit.

Accepted Answer

A) True 
 B)False

Question 15

Appropriate audit evidence,to be reliable and relevant,must be quantitative,objective,and absolutely compelling.

Accepted Answer

A) True 
 B)False

Question 16

Practice standards are a general set of standards intended to guide the audits of financial statements.

Accepted Answer

A) True 
 B)False

Question 17

The general standard of GAAS relates primarily to the personal integrity and professional qualifications of auditors.

Accepted Answer

A) True 
 B)False

Question 18

The reporting standards require that the auditor explicitly report on whether the financial statements ________.

Accepted Answer

A) contain adequate disclosure of all material matters 
B) are in accordance with GAAP 
C) used principles that are appropriate for the circumstances 
D) were prepared on a consistent basis with the comparative year 
A) contain adequate disclosure of all material matters 
B) are in accordance with GAAP 
C) used principles that are appropriate for the circumstances 
D) were prepared on a consistent basis with the comparative year

Question 19

Audit risk is the risk that an auditor expresses an inappropriate audit opinion when the financial statements are materially misstated.

Accepted Answer

A) True 
 B)False

Question 20

Several sources of GAAP consulted by an auditor are in conflict as to the application of an accounting principle.Which of the following should the auditor consider to be the most authoritative?

Accepted Answer

A) CICA Handbook. 
B) CICA Exposure Drafts. 
C) Industry practice. 
D) Federal legislation. 
A) CICA Handbook. 
B) CICA Exposure Drafts. 
C) Industry practice. 
D) Federal legislation.

Exam 2: Auditors Professional Roles and Responsibilities

An assurance engagement is one in which a CA is engaged to ________.

Three-Party Accountability includes all of the following parties except ________.

The fourth reporting standard requires the audit report to comment on the consistency of the accounting principles used in preparing the financial statements.

Audit committees monitor management's financial reporting responsibilities.

All of the following are examples of assurance engagements except ________.

A prospectus is the information,usually including financial information,about a firm that accompanies any new issuance of shares in a regulated securities market.

Reliance on self-regulation of the accounting profession has changed as a result of its perceived failure to detect the problems leading to the corporate scandals of 2002/2003.

Auditors try to achieve independence in appearance in order to ________.

Practice inspection is something a new auditor does as part of his or her training program.

According to IFAC,which of the following is not one of the elements of quality control?

According to GAAS,the overall objective of a financial statement audit is ________.

The CICA Handbook recommendations are a step-by-step list of procedures auditors have to complete for each engagement.

A report giving conclusions about a firm's compliance with quality control standards is typical of which of the following?

The assessment of materiality has a pervasive impact on the audit.

Appropriate audit evidence,to be reliable and relevant,must be quantitative,objective,and absolutely compelling.

Practice standards are a general set of standards intended to guide the audits of financial statements.

The general standard of GAAS relates primarily to the personal integrity and professional qualifications of auditors.

The reporting standards require that the auditor explicitly report on whether the financial statements ________.

Audit risk is the risk that an auditor expresses an inappropriate audit opinion when the financial statements are materially misstated.

Several sources of GAAP consulted by an auditor are in conflict as to the application of an accounting principle.Which of the following should the auditor consider to be the most authoritative?

Introduction to Auditing

Auditors Ethical and Legal Responsibilities

Reports on Audited Financial Statements

Preliminary Audit Planning: Understanding the Auditees Business

Assessing Risks in an Audit Engagement

Internal Control Over Financial Reporting

Audit Evidence and Assurance

Control Assessment and Testing

Audit Sampling

The Revenues, Receivables, and Receipts Process and Cash Account Balance

The Purchases, Payables, and Payments Process

Payroll and Production Processes

The Finance and Investment Process

hapter 15 Completing the Audit Work

Applying Professional Judgment to Form the Audit Opinion and Issue the Audit Report

Other Public Accounting Services and Reportsreviews and Compilations

Professional Rules of Conduct Details and Auditor Responsibilities

The Audit of Accounting Estimates: Basic Material Relating to Accounting Estimates

Legal Liability Cases

Other Professional Accounting Services and Reports, Including Fraud Auditing

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