STRAYER ACC403 WEEK 2 QUIZ 1 (Answer 30/30) - 87379

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Question 1 In "auditing" financial accounting data, the primary concern is with: Answer determining whether recorded information properly reflects the economic events that occurred during the accounting period determining if fraud has occurred.. determining if taxable income has been calculated correctly. analyzing the financial information to be sure that it complies with government requirements. Question 2 The Sarbanes-Oxley Act applies to which of the following companies? Answer All companies Privately held companies Public companies All public companies and privately held companies with assets greater than $500 million Question 3 Which of the following isnotaSysTrustServices principle as defined by the AICPA? Answer Online privacy Availability Processing integrity Operational integrity Question 4 Which of the following services provides the lowest level of assurance on a financial statement? Answer A review An audit Neither service provides assurance on financial statements. Each service provides the same level of assurance on financial statements. Question 5 An accountant: Answer must possess expertise in the accumulation of audit evidence. must decide the number and types of items to test. must have an understanding of the principles and rules that provide the basis for preparing the accounting information. must be a CPA. Question 6 Recording, classifying, and summarizing economic events in a logical manner for the purpose of providing financial information for decision making is commonly called: Answer finance. auditing. accounting. economics. Question 7 Any service that requires a CPA firm to issue a report about the reliability of an assertion that is made by another party is a(n): Answer accounting and bookkeeping service. attestation service. assurance service. tax service. Question 8 The use of the Certified Public Accountant title is regulated by: Answer the federal government. state law through a licensing department or agency of each state. the American Institute of Certified Public Accountants through the licensing departments of the tax and auditing committees. the Securities and Exchange Commission. Question 9 The most common way for users to obtain reliable information is to: Answer have an internal audit. have an independent audit. verify all information individually. verify the information with management. Question 10 An examination of part of an organization's procedures and methods for the purpose of evaluating efficiency and effectiveness is what type of audit? Answer Operational audit Compliance audit Financial statement audit Production audit Question 11 One objective of an operational audit is to: Answer determine whether the financial statements fairly present the entity's operations. determine if the auditee is in compliance with GAAP. make recommendations for improving performance. report on the entity's relative success in attaining profit maximization. Question 12 Which of the following is considered audit evidence? Answer Oral statements made by management Written Communications Auditor Observation Y N N Oral statements made by management Written Communications Auditor Observation N Y Y Oral statements made by management Written Communications Auditor Observation Y Y Y Oral statements made by management Written Communications Auditor Observation N N Y Question 13 An audit to determine whether an entity is following specific procedures or rules set down by some higher authority is classified as a(n): Answer audit of financial statements. compliance audit. operational audit. production audit. Question 14 A correct relationship among the auditor, the client, and the external users is: Answer management of a public company hires the independent auditor. the audit committee of a private company hires the independent auditor. the client provides capital to the external users. the external users can rely upon the auditor's report to reduce information risk. Question 15 Three common types of attestation services are: Answer audits of historical financial statements, reviews of historical financial statements, and audits of internal control over financial reporting. audits of historical financial information, verifications of historical financial information, and attestations regarding internal controls. reviews of historical financial information, verifications of future financial information, and attestations regarding internal controls. audits of historical financial information, reviews of controls related to investments, and verifications of historical financial information. Question 16 The methods used by a CPA firm to ensure that the firm meets is professional responsibilities to clients and others is: Answer continuing professional education. compliance with generally accepted reporting standards. quality control. peer review. Question 17 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: Answer investors in Hansen Corporation's stock. stock exchange. Securities and Exchange Commission. management of Hansen Corporation. Question 18 Members of the Public Company Accounting Oversight Board are appointed and overseen by: Answer the U.S. Congress. the American Institute of Certified Public Accountants. the Auditing Standards Board the Securities and Exchang e Commission. Question 19 The International Standards on Auditing (ISAs): Answer are issued by the AICPA. override a country's regulations governing the audit of a company. has many of the same standards as the Auditing Standards Board (ASB). must be followed by companies whose stock is traded in the U.S. Question 20 To obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, the auditor must fulfill several performance responsibilities, including: Answer verifying that all audit work is performed by a CPA with a minimum of three years experience. obtaining sufficient, appropriate audit evidence. exercising professional judgment. providing an opinion on the financial statements. Question 21 The legal right to perform audits is granted to a CPA firm by regulation of: Answer each state. the Financial Accounting Standards Board (FASB). the American Institute of Certified Public Accountants (AICPA). the Audit Standards Board. Question 22 The purpose of establishing quality control policies and procedures to accept or continue a client relationship is to: Answer provide reasonable assurance that personnel are adequately trained to fulfill their responsibilities. monitor the risk factors concerning misstatements that arise from the misappropriation of assets. document objective criteria for the CPA firm's peer review. minimize the likelihood of associating with a client whose management may lack integrity. Question 23 The form that must be completed and filed with the Securities and Exchange Commission whenever a company experiences a significant event that is of interest to public investors is the: Answer Form S-1. Form 8-K. Form 10-K. Form 10-Q. Question 24 Statements on Standards for Accounting and Review Services are issued by the: Answer Accounting and Review Services Committee. Professional Ethics Executive Committee. Securities and Exchange Commission. Financial Accounting Standards Board. Question 25 For privately held companies who is responsible for establishing auditing standards? Answer Securities and Exchange Commission Public Company Accounting Oversight Board Auditing Standards Board National Association of Accounting Question 26 Standards issued by the Public Company Accounting Oversight Board must be followed by CPAs who audit: Answer both private and public companies. public companies only. private companies, public companies, and nonprofit entities. private companies only. Question 27 The organization that is responsible for providing oversight for auditors of public companies is called the ________. Answer Auditing Standards Board American Institute of Certified Public Accountants Public Oversight Board Public Company Accounting Oversight Board Question 28 The "Principles Underlying an Audit in Accordance with Generally Accepted Auditing Principles" provides a framework to help auditors: Answer understand the ten GAAS standards. obtain complete assurance that the financial statements are free from any error. report on the financial statements. prevent fraud. Question 29 Historically auditing standards have been organized into three categories, including: Answer Standards of field work. Purpose of an audit. Responsibilities of the auditor. Proper planning and supervision. Question 30 When assessing the risk of material misstatements in the financial statements, Answer inadequate internal control procedures will mitigate client business risk. GAAS specifies in detail how much and what types of evidence the auditor needs to obtain. company management is responsible for determining materiality levels. the auditor must have an understanding of the client's business and industry.
Solution Description

Question 1

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

Answer

determining whether recorded information properly reflects the economic events that occurred during the accounting period

determining if fraud has occurred..

determining if taxable income has been calculated correctly.

analyzing the financial information to be sure that it complies with government requirements.

Question 2

The Sarbanes-Oxley Act applies to which of the following companies?

Answer

All companies

Privately held companies

Public companies

All public companies and privately held companies with assets greater than $500 million

Question 3

Which of the following isnotaSysTrustServices principle as defined by the AICPA?

Answer

Online privacy

Availability

Processing integrity

Operational integrity

Question 4

Which of the following services provides the lowest level of assurance on a financial statement?

Answer

A review

An audit

Neither service provides assurance on financial statements.

Each service provides the same level of assurance on financial statements.

Question 5

An accountant:

Answer

must possess expertise in the accumulation of audit evidence.

must decide the number and types of items to test.

must have an understanding of the principles and rules that provide the basis for preparing the accounting information.

must be a CPA.

Question 6

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

Answer

finance.

auditing.

accounting.

economics.

Question 7

Any service that requires a CPA firm to issue a report about the reliability of an assertion that is made by another party is a(n):

Answer

accounting and bookkeeping service.

attestation service.

assurance service.

tax service.

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