11.Which of the following statements is true?

1. 1) GAAP and IFRS are examples of applicable financial reporting framework

2) Private companies, or non-issuers, are not required by the U.S. government to

have an annual financial statement audit

	A.	Neither
	B.	1 only
	C.	2 only
	D.	Both 1and 2

12.Which of the following statements is true?

	A.	If a CPA concludes that threats are at an acceptable level after applying the identified safeguards, then the CPA may proceed with the professional service
	B.	To evaluate the significance of a threat, CPAs should evaluate identified threats in aggregate.
	C.	There are five basic safeguards to assist CPAs with threats to compliance with the accounting profession's ethical rules.
	D.	It is possible for a CPA firm to rely solely on safeguards implemented by the client to eliminate or reduce significant threats to an acceptable level.

13.Considering the risk of overstatement of receivables due to premature revenue recognition that inflates revenues and receivables, which assertion for the accounts receivable balance is typically relevant?

	A.	Rights and obligations
	B.	Completeness
	C.	Accuracy
	D.	Existence

14.Which component of the AICPA's Code of Professional Conduct establishes minimum standards of acceptable conduct in the performance of professional services?

	A.	Rules of Conduct
	B.	All of the above
	C.	Interpretations
	D.	Principles

15.With regard to financial statements, the auditor is required to obtain reasonable assurance, which is a level of assurance that is _______.

	A.	100%, but not objective
	B.	objective, and not subjective
	C.	guaranteed, but not absolute
	D.	high, but not absolute

16.What are the three types of safeguards against threats to a CPA's compliance with the ethical rules of the profession?

	A.	Safeguard of standards, Acts of Congress, certification
	B.	Self-control, internal compass, and future goals
	C.	Safeguard of regulation, client implemented controls, and CPA firm policies
	D.	Independence, legal liability, and accounting standards

17.Identify a service that falls under audit services.

	A.	examination of historical financial statements
	B.	review of financial forecast
	C.	compilation of historical financial statements
	D.	inspection of website security

18.Which of the following involves gaining an understanding of the client, identifying risk factors, developing an audit strategy, and setting planning materiality?

	A.	Risk response phase
	B.	Risk assessment phase
	C.	Risk assessment phase but continues throughout the period of audit
	D.	Substantive procedure

19.Interpretations provide additional guidance regarding the scope and applicability of the _______.

	A.	rules of conduct
	B.	conceptual framework
	C.	standards
	D.	principles

20.Which audit involves gathering evidence to determine whether the person or entity under review has followed the rules, policies, procedures, laws and regulations with which they must conform?

	A.	An internal audit
	B.	A compliance audit
	C.	A performance audit
	D.	An integrated audit