Question 6

The Securities and Exchange Commission was created in 1934 to:

a. To regulate independent audit firms.

b. To regulate the capital markets.

c. To establish generally accepted accounting principles.

d. To establish generally accepted auditing standards.

Question 7

Performing an audit in accordance with generally accepted auditing standards to provide reasonable assurance that the audited financial statements are presented in accordance with GAAP and that those financial statements are not materially misstated define what commonly understood terminology?

a. Due professional care.

b. Engagement quality review.

c. Integrated audit.

d. Audit quality.

Question 8

An attitude that includes a questioning mind and critical assessment of audit evidence is known as:

a. Due professional care.

b. Audit quality.

c. Professional skepticism.

d. A bad attitude.

Question 9

What are the types of fraud most relevant to the auditor of financial statements?

a. Misstatements arising from misappropriation of assets.

b. Corruption

c. Misstatements arising from fraudulent financial reporting.

d. Misstatements arising from immaterial errors.

e. A and C only.

f. All of the above.

Question 11

Who is responsible for engaging the external audit firm to audit the financial statements and for giving final approval for the issuance of the financial statements?

a. The audit committee of the board of directors.

b. The Securities and Exchange Commission.

c. Management of the issuing company.

d. The shareholders.