Professional Responsibilities: Multiple-Choice Questions

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Multiple-Choice Questions (one through fifty-four)

A. Overview of the Attest Function

One. Generally accepted auditing standards are a. Required procedures to be used to gather evidence to support financial statements.

b. Policies and procedures designed to provide reasonable assurance that the CPA firm and its personnel comply with professional standards.

c. Pronouncements issued by the Auditing Standards Board.

d. Rules acknowledged by the accounting profession because of their universal application.

Two. Which of the following is a conceptual difference between the attestation standards and generally accepted auditing standards?

a. The attestation standards do not apply to audits of historical financial statements, while the generally accepted auditing standards do.

b. The requirement that the practitioner be independent in mental attitude is omitted from the attestation standards.

c. The attestation standards do not permit an attest engagement to be part of a business acquisition study or a feasibility study.

d. The attestation standards include reviews, while generally accepted auditing standards do not.

Three. Which of the following is not an attestation standard?

a. Sufficient evidence shall be obtained to provide a reasonable basis for the conclusion that is expressed in the report.

b. The report shall identify the subject matter on the assertion being reported on and state the character of the engagement.

c. The work shall be adequately planned and assistants, if any, shall be properly supervised.

d. A sufficient understanding of internal control shall be obtained to plan the engagement.

Four. Which of the following is most likely to be unique to the audit work of CPAs as compared to work performed by practitioners of other professions?

a. Due professional care.

b. Competence.

c. Independence.

d. Complex body of knowledge.

Five. The Public Company Accounting Oversight Board's standards require that due care is to be exercised in the performance of an audit. This standard is ordinarily interpreted to require a. Thorough review of the existing safeguards over access to assets and records.

b. Limited review of the indications of employee fraud and illegal acts.

c. Objective review of the adequacy of the technical training and proficiency of firm personnel.

d. Critical review of the judgment exercised at every level of supervision.

B. AICPA Code of Professional Conduct

Six. For which of the following can a member of the AICPA receive an automatic expulsion from the AICPA?

One. Member is convicted of a crime punishable by imprisonment for more than one year.

Two. Member files his own fraudulent tax return.

Three. Member files fraudulent tax return for a client knowing that it is fraudulent.

a. One only.

b. One and Two only.

c. One and Three only.

d. One, Two, and Three.

Seven. Which of the following is an example of a safeguard implemented by the client that might mitigate a threat to independence?

a. Required continuing education for all attest engagement team members.

b. An effective corporate governance structure.

c. Required second partner review of an attest engagement.

d. Management selection of the CPA firm.

Eight. Which of the following is a "self review" threat to member independence?

a. An engagement team member has a spouse that serves as CFO of the attest client.

b. A second partner review is required on all attest engagements.

c. An engagement team member prepares invoices for the attest client.

d. An engagement team member has a direct financial interest in the attest client.

Nine. According to the standards of the profession, which of the following circumstances will prevent a CPA performing audit engagements from being independent?

a. Obtaining a collateralized automobile loan from a financial institution client.

b. Litigation with a client relating to billing for consulting services for which the amount is immaterial.

c. Employment of the CPA's spouse as a client's director of internal audit.

d. Acting as an honorary trustee for a not-for-profit organization client.

Ten. The profession's ethical standards most likely would be considered to have been violated when a CPA represents that specific consulting services will be performed for a stated fee and it is apparent at the time of the representation that the a. Actual fee would be substantially higher.

b. Actual fee would be substantially lower than the fees charged by other CPAs for comparable services.

c. CPA would not be independent.

d. Fee was a competitive bid.

Module One: Professional Responsibilities

C. Quality Control

Module One: Professional Responsibilities

D. The Sarbanes-Oxley Act of two thousand two

E. Public Company Accounting Oversight Board

Module one: Professional Responsibilities

Module One: Professional Responsibilities

A point one. Financial Statement Assertions

Classes of transactions

A point two. Audit Risk

A point three. Materiality

A point four. Errors and Fraud

A. Five. Laws and Regulations

B. Audit Planning

B. One. Communicate with Predecessor Auditors

B. Two. Establishing an Understanding with the Client (Engagement Letters)

B. Three. Preliminary Engagement Activities

B. Four. Developing an Overall Strategy

B. Five. The Audit Plan

B. Seven. Timing of Audit Procedures

C. Obtain an Understanding of the Entity and Its Environment

C. One. Communicate with Predecessor Auditors

C. Two. Consideration of Internal Control

C. Three. Supervision Requirements

C. Four. Analytical Procedures

D. One. Assess the Risks of Material Misstatement and Design Further Audit Procedures-Overall Approach

D point two. Using the Work of a Specialist

E. Required Communication to Those Charged with Governance

One hundred fifteen. Should an auditor communicate the following matters to those charged with governance of an audit client?

Answers

Module two: Engagement Planning, Obtaining an Understanding of the Client and Assessing Risks

Multiple-Choice Questions (One to One hundred nineteen)

A point two. Major Components of Internal Control

A point three. Related Topics

B point one. Obtain an Understanding of Internal Control

Module three. Understanding Internal Control and Assessing Control Risk

B. Three. Perform Tests of Controls

C. One. Sales, Receivables, and Cash Receipts

Module Three: Understanding Internal Control and Assessing Control Risk

C point two. Purchases, Payables, and Cash Disbursements

Module Three: Understanding Internal Control and Assessing Control Risk

C. three. Inventories and Production

Module Three: Understanding Internal Control and Assessing Control Risk

C. four. Personnel and Payroll

Module Three: Understanding Internal Control and Assessing Control Risk

C. Five. Financing

C. Six. Investing

Module Three: Understanding Internal Control and Assessing Control Risk

C. Seven. Overall Internal Control Questionnaires (Checklists)

D. One. Communication of Internal Control-Related Matters

Module Three: Understanding Internal Control and Assessing Control Risk

D. two. Using the Work of Internal Auditors

Module Three: Understanding Internal Control and Assessing Control Risk

Explanations

Module Three: Understanding Internal Control and Assessing Control Risk

Module three: Understanding Internal Control and Assessing Control Risk

Module Three: Understanding Internal Control and Assessing Control Risk

Multiple-Choice Questions (one through one hundred sixty-two)

A point two. Types of Audit Evidence

Module Four: Responding to Risk Assessment: Evidence Accumulation and Evaluation

B point one a. Analytical Procedures

B. One b. Tests of Details of Transactions, Balances, and Disclosures

B. Two. Specific Substantive Procedures

B. Three. Documentation

C. One. Evidence-Cash

C point two. Evidence-Receivables

Module Four: Responding to Risk Assessment: Evidence Accumulation and Evaluation

C point three. Evidence-Inventory

Module Four: Responding to Risk Assessment: Evidence Accumulation and Evaluation

C point five. Evidence-Property, Plant, and Equipment

Module Four: Responding to Risk Assessment: Evidence Accumulation and Evaluation

C point seven. Evidence-Payables (Current)

C point eight. Evidence-Long-Term Debt

C point nine. Evidence-Owners' Equity

Module four: Responding to Risk Assessment: Evidence Accumulation and Evaluation

C point ten. Revenue

C point eleven. Expenses

C point twelve. Client Representation Letters

C point thirteen. Loss Contingencies and Inquiry of a Client's Lawyer

Module Four: Responding to Risk Assessment: Evidence Accumulation and Evaluation

C. fifteen. Related-Party Transactions

C. sixteen. Subsequent Events and Subsequent Discovery of Facts Existing at the Date of the Audit Report

C. seventeen. Omitted Procedures Discovered after the Report Date

Module four. Responding to Risk Assessment: Evidence Accumulation and Evaluation

C. eighteen. Audit of Statement of Cash Flows

D. Completing the Audit

E. Other Related Topics

Module Four: Responding to Risk Assessment: Evidence Accumulation and Evaluation

Multiple-Choice Questions (one through two hundred seven)

B. Two. Substantial Doubt about Ability to Continue as a Going Concern

B. three. Inconsistency in Application of GAAP

Module five. Reporting

B.4. Uncertainties

B.5. Other Circumstances at the Discretion of the Auditor

C.1. Circumstances Resulting in Audit Reports with Modified Opinions-Background

C.2. Materially Misstated Financial Statements (Departures from GAAP)

C.3. Inability to Obtain Sufficient Appropriate Audit Evidence (Scope Limitations)

D. Group Financial Statements

E. two. Comparative Financial Statements

E. three. Other Information in Documents Containing Audited Financial Statements

E. four. Required Supplementary Information

E. five. Supplementary Information in Relation to the Financial Statements as a Whole

E. Six. Alerts as to Report Intended Use (Restricting the Use of an Auditor's Report)

E. Seven. Additional Circumstances Involving Other-Matter Paragraphs

Module Five: Reporting

E. Eight. Summary of Placement of Additional Paragraphs

F. One. Audits of Financial Statements Prepared in Accordance with Special-Purpose Financial Reporting Frameworks

F. Two. Audits of Single Financial Statements, and Specific Elements, Accounts, or Items of Financial Statements

G. One b. Reviewed Interim (Quarterly) Statements

G point one point C. Summary Financial Statements

G point two point A. Letters for Underwriters

G point two point B. Application of Requirements of an Applicable Financial Reporting Framework

G point three a. Attestation Engagements-General

Module Five: Reporting

G point three c. Financial Forecasts and Projections

G point three d. Reporting on Pro Forma Financial Information

G. three. e. Management Discussion and Analysis

G. three. f. Trust Services

G. three. g. Service Organizations

Module five: Reporting

H. Audits (Examinations) of Internal Control

One point two point a. Agreed-Upon Procedures Engagements

One point two point b. Examination Engagements

One point three point a. Compliance Audits Conducted in Accordance with Generally Accepted Government Auditing Standards

One. Noteworthy accomplishments of the program.

One point three point b. Compliance Audits Conducted in Accordance with Generally Accepted Government Auditing Standards

One. three. c. Compliance Audits Conducted in Accordance with the Single Audit Act

Multiple-Choice Answers and Explanations

Explanations

Module Six: Accounting and Review Services

Preparation, Compilation, and Review-General

Module Six: Accounting and Review Services

Preparation

Compilation-General

Compilation Procedures

Compilation Reporting

Module Six: Accounting and Review Services

Review Procedures

Module Six: Accounting and Review Services

Review Reporting

Module six: Accounting and Review Services

Answers

Module Six: Accounting and Review Services

Multiple-Choice Questions (One to Fifty-eight)

A point three. Uncertainty and Audit Sampling

A point four. Types of Audit Tests in Which Sampling May Be Used

A point five. Types of Statistical Sampling Plans

B point one. Tests of Controls-Sampling Risk

B. two. Statistical (Attributes) Sampling for Tests of Controls

B. three. Nonstatistical Sampling for Tests of

C. one. Sampling Risk

C. two. Probability-Proportional-to-Size (PPS) Sampling

C. three. Classical Variables Sampling

C. four. Comparison of PPS Sampling to Classical Variables Sampling

Multiple-Choice Answers and Explanations

Explanations

Multiple-Choice Questions (one through thirty-two)

B. Computerized Audit Tools

Multiple-Choice Answers and Explanations

Explanations

Appendix B: Auditing and Attestation Sample Examination

Hints for Testlet One

Explanations to Testlet One

Testlet Two

Appendix B: Auditing and Attestation Sample Examination

Hints for Testlet Two

Explanations to Testlet Two

Testlet Three

Appendix B: Auditing and Attestation Sample Examination

Hints for Testlet Three

Explanations to Testlet Three

Overview

This document serves as a study aid for CPAs, providing multiple-choice questions that examine their understanding of professional responsibilities and ethical standards. It is designed to test knowledge related to auditing, independence, and the operational guidelines established by the AICPA.

Key Points

1The document includes questions on attestation standards and how they differ from generally accepted auditing standards
2It assesses knowledge of independence threats and safeguards in CPA practice
3Ethical standards violations are outlined through scenario-based questions
4The document aids in preparing for professional assessments and enhances understanding of CPA responsibilities.

Details

Category: Law and Legal Studies

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