21. An auditor considers quantitative and qualitative materiality at the beginning of an

engagement.

1. True

2. False

22. Which of the following statements is incorrect regarding independence?

1. The independence of auditors of public companies is more important than the O independence of auditors of private companies.

2. Not all services provided by public accounting firms require independence.

3. Independence is the source of value for an assurance engagement.

4. Assurers must be independent from information providers.

23. Which of the following is unrelated to fraudulent financial reporting (FFR) risk?

1. High-level executives receive bonuses limited to 1% of reported sales.

2. The company's accounting policies are complex.

3. The possibility of management override of internal control exists.

4. The company runs background checks on manufacturing employees.

24. Implicit in management's overall assertion that the financial statements are i/c/w GAAP is an assertion that all assets presented in the balance sheet exist.

1. True

2. False

25. Compilations provide a lower level of assurance than financial statement reviews regarding whether F/S are i/c/w GAAP.

1. True

2. False

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