Strayer ACC 403/ACC403 Midterm Exam 2015 (100% ANSWER) 50/50 - 88338

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PART I Question 1 5 out of 5 points The three requirements for becoming a CPA include all but which of the following? Question 2 5 out of 5 points In "auditing" financial accounting data, the primary concern is with: Answer Question 3 5 out of 5 points Three common types of attestation services are: Answer Question 4 5 out of 5 points ________ risk reflects the possibility that the information upon which the business decision was made was inaccurate. Answer Question 5 5 out of 5 points Recording, classifying, and summarizing economic events in a logical manner for the purpose of providing financial information for decision making is commonly called: Answer Question 6 5 out of 5 points A correct relationship among the auditor, the client, and the external users is: Answer A. management of a public company hires the independent auditor. B. the audit committee of a private company hires the independent auditor. C. the client provides capital to the external users. D. the external users can rely upon the auditor's report to reduce information risk. Question 7 5 out of 5 points Standards issued by the Public Company Accounting Oversight Board must be followed by CPAs who audit: Answer Question 8 5 out of 5 points In order to properly plan and perform an audit, an important fact for both the auditor and the client to understand is that: Answer Question 9 5 out of 5 points Assume the Public Company Accounting Oversight Board (PCAOB) identifies a violation during its inspection of a registered accounting firm. The PCAOB: Answer Question 10 5 out of 5 points Which of the following are audit standards used in professional practice by audit firms? Answer Question 11 5 out of 5 points The purpose of establishing quality control policies and procedures to accept or continue a client relationship is to: Answer Question 12 5 out of 5 points For privately held companies who is responsible for establishing auditing standards? Question 13 5 out of 5 points When a qualified or adverse opinion is issued, the qualifying paragraph is inserted: Answer Question 14 5 out of 5 points When there is uncertainty about a company's ability to continue as a going concern, the auditor's concern is the possibility that the client may not be able to continue its operations or meet its obligations for a "reasonable period of time." For this purpose, a reasonable period of time is considered not to exceed: Answer Question 15 5 out of 5 points After the auditor determines whether any conditions exist which require a departure from a standard unqualified report, the next step in the decision process for audit reports is to: Answer Question 16 5 out of 5 points The audit report date on a standard unqualified report indicates: Answer Question 17 5 out of 5 points A CPA may wish to emphasize specific matters regarding the financial statements even though an unqualified opinion will be issued. Normally, such explanatory information is: Answer Question 18 5 out of 5 points If most or all users' decisions that are based on the financial statements are likely to be significantly affected, the materiality level is: Answer Question 19 5 out of 5 points Which of the following represents all of the ways a CPA firm can be organized under Rule 505? Answer Question 20 5 out of 5 points When a member observes the profession's technical and ethical standards and strives to continually improve her competence and quality of services, she is exercising: Answer Question 21 5 out of 5 points The financial interests of a CPA's family members can affect the CPA's independence. Which of the following parties would not be included as a "direct financial interest" of the CPA? Answer Question 22 5 out of 5 points Rule 301 of the AICPA's Code of Professional Conduct requires CPAs to maintain the confidentiality of client information. This rule would be violated if a CPA disclosed information without a client's consent as a result of a: Answer Question 23 5 out of 5 points The AICPA's Code of Professional Conduct states that a CPA should maintain integrity and objectivity. The term "objectivity" in the Code refers to a CPA's ability to: Answer Question 24 5 out of 5 points The members of a client's "audit committee" should be: Answer Question 25 5 out of 5 points Which of the following services are allowed by the SEC whenever a CPA also audits the company? Answer MIDTERM part II Question 1 5 out of 5 points The laws that have been developed through court decisions are called: Answer Question 2 5 out of 5 points Laws that have been passed by the U.S. Congress and other governmental units are: Answer Question 3 5 out of 5 points The Foreign Corrupt Practices Act (FCPA) of 1977: Answer Question 4 5 out of 5 points Which of the following most accurately describes fraud? Answer Question 5 0 out of 5 points The expectation gap: Answer Often results in unwarranted lawsuits against the auditor Question 6 5 out of 5 points Recklessness in the case of an audit is present if the auditor knew an adequate audit was not done but still issued an opinion, even though there was no intent to deceive financial statement users. This description is the legal term for: Answer Question 7 5 out of 5 points In certifying their annual financial statements, the CEO and CFO of a public company certify that the financial statements comply with the requirements of: Answer Question 8 5 out of 5 points The auditor's best defense when material misstatements are not uncovered is to have conducted the audit: Answer Question 9 5 out of 5 points If a short-term note payable is included in the accounts payable balance on the financial statement, there is a violation of the: Answer Question 10 5 out of 5 points The essence of the attest function is to: Answer Question 11 5 out of 5 points Management assertions are: Answer Question 12 5 out of 5 points Tests of details of balances are specific audit procedures that are intended to: Answer Question 13 5 out of 5 points Physical examination: Answer Question 14 5 out of 5 points When practical and reasonable, U.S. auditing standards require the confirmation of: Answer Question 15 5 out of 5 points When the auditor develops supporting evidence for amounts posted to account balances with documentary evidence, that process is called: Answer Question 16 5 out of 5 points ________ is the auditor's examination of the client's documents and records to substantiate that the information is included in the financial statements. Answer Question 17 5 out of 5 points Which of the following is not one of the four decisions about what evidence to gather and how much of it to accumulate? Question 18 5 out of 5 points The two characteristics of the appropriateness of evidence are: Answer Question 19 5 out of 5 points An example of an external document that provides reliable information for the auditor is: Answer Question 20 5 out of 5 points Smith, CPA has requested permission to communicate with the predecessor auditor in order to review certain workpapers for high risk accounts for a new audit client. The new audit client's refusal to allow this communication to occur would impact Rodgers decision concerning: Answer Question 21 5 out of 5 points Which of the following normally signs the engagement letter for an audit of a private company? Answer Question 22 5 out of 5 points The purpose of an engagement letter is to: Answer Question 23 5 out of 5 points A measure of the auditor's assessment of the likelihood that there are material misstatements in an account before considering the effectiveness of the client's internal control is called: Answer Question 24 5 out of 5 points In making client acceptance decisions, the audit firm will consider: Answer Question 25 5 out of 5 points Related party: Answer
Solution Description

PART I

Question 1

5 out of 5 points

The three requirements for becoming a CPA include all but which of the following?

Question 2

5 out of 5 points

In "auditing" financial accounting data, the primary concern is with:

Answer

Question 3

5 out of 5 points

Three common types of attestation services are:

Answer

Question 4

5 out of 5 points

________ risk reflects the possibility that the information upon which the business decision was made was inaccurate.

Answer

Question 5

5 out of 5 points

Recording, classifying, and summarizing economic events in a logical manner for the purpose of providing financial information for decision making is commonly called:

Answer

Question 6

5 out of 5 points

A correct relationship among the auditor, the client, and the external users is:

Answer

A. management of a public company hires the independent auditor.
B. the audit committee of a private company hires the independent auditor.
C. the client provides capital to the external users.
D. the external users can rely upon the auditor's report to reduce information risk.

Question 7

5 out of 5 points

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

Answer

Question 8

5 out of 5 points

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

Answer

Question 9

5 out of 5 points

Assume the Public Company Accounting Oversight Board (PCAOB) identifies a violation during its inspection of a registered accounting firm. The PCAOB:

Answer

Quest

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