1 Which of the following best describes relationships among auditing, attest and assurance services. A) Attest is a type of auditing service B) Auditing and attest services represent two distinctly different types of services. C) Assurance is a type of attest service D) Auditing is a type of assurance service. 2 Which of the following can be called an assurance service? A) Personal financial planning C) Systems design and installation B) Performance measurement D) Tax planning 3 Non-assurance engagements include all of the following services, except A) Agreed upon procedures engagement C) Examination of prospective financial information B) Compilations of financial or other information D) Management and tax consulting 4 Although the CPA does not guarantee his findings, his opinion is nevertheless. valuable to various third parties. The value of the CPA's opinion lies in the fact that A) He has the qualifications required by law to be a CPA. B) He is under the supervision of the Board of Accountancy. C) He has gathered sufficient appropriate evidential matter to support his opinion D) He has followed generally accepted auditing standards. 5 Which of the following types of audits would be intended to determine whether a governmental entity is following sound procurement practices? A) A financial statement audit C) A program audit B) An operational audit D) A compliance audit 6 Auditing is based on the assumption that financial data and statements are A) In conformity with an acceptable financial reporting frameworks such as PAS/PFRS B) Verifiable C) Presented fairly D) Consistently applied 7 A CPAs opinion on financial statements is of little value to those who relied on him unless he A) issues an unqualified opinion B) maintains a program of continuing education C) serves his client with professional concern for their best interest D) maintains his independence 8 Which of the following statements is correct concerning both an engagement to compile and an engagement to review an entity's financial statements? A) The accountant does not contemplate obtaining an understanding of the internal control system B) The accountant must be independent in fact and in appearance. C) The accountant expresses no assurance on the financial statements D) The accountant should obtain a written management representation letter. 9 Which of the following statements does not describe a condition that creates a demand for auditing? A) Conflict between an information preparer and a user can result in biased information. B) Information can have substantial economic consequences for a decision maker. C) Expertise is often required for information preparation and verification. D) Users can directly assess the quality of information. 10 Financial statements audits A) Reduce the cost of the capital C) Assess management efficiency B) Report on compliance with laws/regulations D) Overlook information risk 11 According to PSA 120 a compilation presents information, in the form of financial statements, that is, the representation of management.The accountant who prepares the compilation undertakes to express A) limited assurance on the statements C) no assurance on the statements B) minimal assurance on the statements D) full assurance on the statements 12 The level of assurance that is provided by the CPA on a compilation report is A) high B) medium C) low D none 13 In comparison to the external auditor, an internal auditor is more likely to be concerned with A) Internal administrative procedures C) Operational auditing B) Cost accounting procedures D) Internal control 14 The value of the auditor's attest function involves the application of A) The general standards C) The standards of reporting B) The standards of field work D) Due professional care 15 In financial statement audits, the audit process should conform with A) Generally accepted auditing standards C) Examining cash transactions B) Acceptable financial reporting framework D) Comparing recorded accountability with assets 16 Which of the following types of auditing is performed most commonly by CPA's on a contractual basis? A) Internal auditing B) Income tax auditing C) Government auditing D) External auditing 17 The overall objective of forensic auditing is to A) Attest to the efficiency with which resources are employed B) Unearth the truth and provide evidence in legal and financial disputes, controls are costs justified. C) Provide assurance that financial data have been accurately recorded D) Assist members of the organization in the effective discharge of their responsibilities 18 An auditor has found that the client is suffering financial difficulty and that the going-concern status is seriously in doubt. Even though the client has placed adequate disclosures in the financial statements the auditor must choose between the following audit report alternatives A) Standard unqualified opinion B) Qualified or disclaimer or opinion C) Qualified or adverse opinion D) Unqualified report with a going-concern explanatory paragraph or disclaimer of opinion 19 The risk to investors that financial statements may be materially misleading is called A) Business risk C) Information risk B) Client acceptance risk D) Moral hazard 20 The primary responsibility for the adequacy of disclosure in the financial statements and accompanying notes rests with the A) audit partner assigned to the engagement C) staff auditor who drafts the statements and notes B) senior auditor in charge of field work D) client management 21 A limitation on the scope of an audit sufficient to preclude an unqualified opinion will usually result when management... A) is unable to obtain audited FS supporting the entity's investment in a foreign subsidiary B) refuses to disclose in the notes to financial statements related party transactions authorized by the board of directors. C) does not sign an engagement letter specifying the responsibilities of both the entity and the auditor D) fails to correct a reportable condition communicated to audit committee after the prior yea's audit 22 Existence of audit risk is recognized by the statement in the auditor's standard report that the auditor A) obtains reasonable assurance about whether the financial statements are free of material misstatement, whether due to fraud or error. B) assesses the accounting principles used and also evaluates the overall financial statement C) realizes some matters either individually or in the aggregate are important while other matters are not important D) is responsible for expressing an opinion on the financial statements that are the responsibility of management 23 An auditor may reasonably issue a qualified opinion for a Scope Limitation Unjustified Accounting Change A) YES NO B) NO YES C) YES YES D) NO NO 24 Most of the independent auditor's work in formulating an opinion on financial statements consists of A) Studying and evaluating internal control C) Examining cash transactions B) Obtaining and examining evidential matter D) Comparing recorded accountability with assets 25 Which of the following is not one of the concepts in the framework of auditing theory? A) Ethical conduct B) Conflict of interest C) Evidence D) Fair presentation