Multiple Choice Questions

1.Select the appropriate case to which each is most closely related.

Auditors willfully violated Securities Exchange Act of 1934 by making false and misleading statements in a proxy statement.

• United States v. Benjamin

• Credit Alliance v. Arthur Andersen

• United States v. Natelli (National Student Marketing)

• Fleet National Bank v. Gloucester Co.

• Rosenblum, Inc. v. Adler

2.Which of the following is an element of a system of quality control that should be considered by a public accounting firm in establishing its quality control policies and procedures?

• Membership in the Center for Public Company Audit Firms.

• Acceptance and continuance of client relationships and specific engagements.

• Using statistical sampling techniques.

• Lending credibility to a client's financial statements.

3. Which of the following section(s) references the requirement of auditors to be independent?

• Opinion on the Financial Statements section.

• Basis for Opinion section.

• Critical Audit Matters section.

• Opinion on the Financial Statements section and Basis for Opinion section.

4. Which of the following management assertions is an auditor most likely testing if the audit objective states that all inventory on hand is reflected in the ending inventory balance?

• Inventory is complete.

• The entity has rights to the inventory.

• Inventory is properly presented in the financial statements.

• Inventory is properly valued.