1. The risk that an auditor will issue an unqualified/unmodified opinion on a set of materially misstated financial statements is A) inherent risk. B) audit risk. C) control risk. D) financial risk. 2. Which of the following statements is true? a. The PCAOB sets auditing standards for private companies while the AICPA sets standards for public companies b. The PCAOB was formed in the 1980s after the Savings and Loans scandals c. The ten general standards do not apply to private companies-they use principles instead d. The wording of the standard auditor's report is identical for public and private companies 3. ABC Company is audited by the Phoenix office of Willingham CPAs. Which of the following individuals would be least likely to be considered a "covered member" ? a. Staff assistant on the audit. b. An audit partner in the L.A. office c A tax partner in the Phoenix office d. The partner in charge of the entire Willingham CPAs firm who is based in the LA. office 4. In conducting analytical procedures the auditor may do all of the following except a. Compare last year's financial statement numbers to this years b. Compare this year's financial statement numbers to those of competitors in the industry c. Examine this year's balances of certain asset accounts as compared to the total assets balance d. Compare sales over the last five years e. Compare invoices received for office supplies to the expenses in the office supplies expense account