ACCT 444 Week 1 Quiz

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ACCT 444 Week 1 Quiz

1. (TCO 3) Prior to the passage of the Sarbanes-Oxley Act, which of the following was responsible for establishing auditing standards? (Points : 3)

Securities and Exchange Commission
Public Company Accounting Oversight Board
Auditing Standards Board
National Association of Accounting


Question 2.2. (TCO 1) Which one of the following is not one of the three general standards? (Points : 3)

Proper planning and supervision
Independence of mental attitude
Adequate training and proficiency
Due professional care


Question 3.3. (TCO 1) Which of the following is not an example of the application of professional skepticism? (Points : 3)

Designing additional auditing procedures to obtain more reliable evidence in support of a particular financial statement assertion
Obtaining corroboration of management’s explanations through consultation with a specialist
Inquiring of prior year engagement personnel regarding their assessment of management’s honesty and integrity
Using third-party confirmations to provide support for management’s representations.

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Question 4.4. (TCO 1) An operational audit has as one of its objectives to (Points : 3)

determine whether the financial statements fairly present the entity’s operations.
evaluate the feasibility of attaining the entity’s operational objectives.
make recommendations for improving performance.
report on the entity’s relative success in attaining profit maximization.


Question 5.5. (TCO 1) Which of the following services do not need to be preapproved by the audit committee of an issuer? (Points : 3)

Tax services
Nonaudit services that are less than 5 % of total revenues from the audit client
Services provided by the auditor on a recurring basis
Nonaudit services related to internal control over financial reporting


Question 6.6. (TCO 3) According to the ethical standards of the profession, which of the following acts is generally prohibited? (Points : 3)

Issuing a modified report explaining a failure to follow a governmental regulatory agency’s standards when conducting an attest service for a client
Revealing confidential client information during a quality review of a professional practice by a team from the state CPA society
Accepting a contingent fee for representing a client in an examination of the client’s federal tax return by an IRS agent
Retaining client records after an engagement is terminated prior to completion and the client has demanded their return


Question 7.7. (TCO 3) An auditor strives to achieve independence in appearance to (Points : 3)

maintain public confidence in the profession.
be in a position to offer other services to the client.
comply with the generally accepted accounting principles.
maintain a biased mental attitude.


Question 8.8. (TCO 3) The financial interests of which of the following parties would not be included as a direct financial interest of the CPA? (Points : 3)

Dependent child
Relative supported by the CPA
Sibling living in the same city as the CPA


Question 9.9. (TCO 1) Which of the following statements is correct concerning an auditor’s responsibilities regarding financial statements? (Points : 3)

An auditor may not draft an entity’s financial statements based on information from management’s accounting system.
The adoption of sound accounting policies is an implicit part of an auditor’s responsibilities.
An auditor’s responsibilities for audited financial statements are confined to the expression of the auditor’s opinion.
Making suggestions that are adopted about an entity’s internal control environment impairs an auditor’s independence.


Question 10.10. (TCO 1) The auditor of an issuer may provide which of the following tax services? (Points : 3)

Services related to confidential tax transactions
Tax services for officers of the issuer
Tax services for immediate family members of corporate officers
Tax planning services



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