1-The auditor's report of a public company is generally addressed to the: *

Chief financial officer

Securities and Exchange Commission

Stockholders of the company

Chief operating officer

2-The three sections or groups of audit standards are: *

Field work, reporting, and general

Field work, general, and final

Field work, testing, and internal control review

Field work, general, and overall

3-The definition of auditing includes the following statement *

An independent appraisal function established within an organization to examine and evaluate its activities

A process of correcting the financial statements

A process of reducing to a socially acceptable level the information risk to users of financial statements

A systematic process of objectively obtaining and evaluating evidence regarding assertions about economic actions and events

4-Which of the following is generally not considered one of the five business processes or cycles? *

Financing

Information technology

Inventory management

Revenue

5-Which one of the following services is not considered as one of the categories of non-audit services that may be performed by many public accounting firms? *

Management advisory services

Compilation and review services

Tax preparation and planning services

All of the above are categories of non-audit services that may be performed by many public accounting firms

6-In the audit report for a public company, the paragraph that indicates which financial statements are covered by the report is the: *

Opinion paragraph

Explanatory paragraph

Introductory paragraph

Scope paragraph

7-Which of the following best describes the primary reason an independent auditor reports on financial statements? *

To identify a poorly designed internal control structure that may produce unreliable financial statements

To add credibility, where appropriate, since the client may not be perceived as objective with respect to its own financial statements

To provide expertise to clients which may not be totally knowledgeable of prevailing GAAP

To give stockholders some assurance that any fraudulent activities will be detected

8-The Public Company Accounting Oversight Board's role is to *

Oversee the auditors of public companies in order to protect the interests of investors

Conduct the final review of auditors' work before the auditor's opinion is issued

Conduct audits of governmental entities

Sanction auditors who fail to follow GAAS

9-Which one of the following services is the broadest and most inclusive? *

Attest

Compliance

Auditing

Assurance

10-If an auditor performs an audit of a public company, the scope paragraph should make reference to which standards? *

Standards issued by the PCAOB (U.S.)

International Audit Standards

GAAP

GAAS

11-The four PCAOB standards of reporting are concerned with all of the following except *

The presentation of the financial statements based on GAAS

The presentation of the financial statements based on GAAP

The degree of responsibility the auditor is taking

Whether principles are consistently applied, whether all informative disclosures have been made and the degree of responsibility the auditor is taking

12-Which of the following is the essential purpose of the audit function? *

Examination of individual transactions to certify their validity

Detection of fraud

Determination of whether the client's financial statement assertions are fairly stated

Assurance of the consistent application of correct accounting procedures

13-What is the general character of the work conducted in performing a forensic audit for a company? *

Identifying the causes of an entity's financial difficulties

Detecting or deterring fraudulent activity

Providing assurance that the financial statements are not materially misstated

Offering an opinion on the reliability of the specific assertions made by management

14-Who bears ultimate responsibility for the financial statements? *

Management of the organization

Management and the shareholders of the organization

Management of the organization, equally with the external auditor that audits the statements

The external auditor that audits the statements

15-Most companies prefer that auditors issue *

Adverse report

Unqualified report

Any one of the above

Qualified report

16-Which of the following best describes the general character of the three PCAOB generally accepted auditing standards that are classified as standards of fieldwork? *

Criteria for the content of the auditor's report on financial statements and related footnote disclosures

The competence, independence, and professional care of persons performing the audit

The criteria of audit planning and evidence-gathering

The need to maintain independence in mental attitude in all matters relating to the audit

17-The main concept of Compliance audit is *

Comprehensive review of an organization's adherence to regulatory guidelines

Guarantee that the financial statements are not materially misstated

Review that the performance of the company is as well as its competitors

Insure that financial statements are free from material misstatements

18-If it is probable that the judgment of a reasonable person would have been changed or influenced by the omission or misstatement of information, then that information is: *

Insignificant

Relevant

Significant

Material

19-Which of the following is NOT a typical responsibility for an associate/staff level auditor? *

Performing the audit procedures assigned to them

Assisting in the development of the audit plan

Informing the senior about any auditing or accounting problems encountered

Preparing adequate and appropriate documentation of completed work

20-An audit of historical financial statements most commonly includes the: *

Income statement, the statement of cash flows, and the statement of net working capital

Balance sheet, statement of retained earnings, and the statement of cash flows

Statement of cash flows, balance sheet, and the statement of retained earnings

Balance sheet, income statement, and the statement of cash flows