1. Why do people and organizations need to have trust in the financial reporting process?

2. What is the Securities and Exchange Commission (SEC)?

3. What types of companies fall under the jurisdiction of the SEC?

4. According to the SEC, who has the responsibility for setting generally accepted accounting principles in the United States (U.S. GAAP)?

5. What is the purpose of the Accounting Standards Codification?

6. What is a Form 10-K and a Form 10-Q?

7. Within the SEC, what is the purpose of EDGAR?

8. What role in the setting of financial accounting standards is played by the Emerging Issues Task Force (EITF)?

9. Why does the SEC not examine all the submitted financial statements to ensure their fair presentation?

10. Why must public companies hire an independent auditing firm before they submit their financial statements to the SEC?

11. Why do nonpublic companies often have their financial statements audited?

12. What is a CPA? How does a person become a CPA?

13. What organization regulates and sets the standards for the firms that audit public companies?

14. What legislation established the Public Company Accounting Oversight Board (PCAOB)?

15. What organization sets the standards for the firms that do not audit public companies?

16. An independent auditor examines the financial statements prepared by the management of Simon Corporation. Who is the primary beneficiary of the audit work?

17. An independent auditor examines the financial statements prepared by the management of Garfunkel Corporation. The auditor believes the financial information is fairly presented according to U. S. GAAP. What type of assurance does the auditor provide?

18. Why do auditors not provide absolute assurance that examined financial statements are presented fairly according to U.S. GAAP?

19. What are internal controls?

20. How is an auditors work affected by the presence and quality of a companys internal controls?

21. What is an unqualified audit opinion?

22. Why might an auditor include an explanatory paragraph in an audit report between the scope paragraph and the opinion paragraph?

23. Under what conditions does an auditor not render an unqualified opinion?