TRUE OF FALSE ?

1. ____ The Howard Company has exceptionally good internal control. The quality of that internal control has no effect on the work of the companys independent auditor.

2. ____ An accountant becomes a CPA based on federal rules and regulations.

3. ____ A person who works as an accountant for a significant number of years becomes known as a CPA.

4. ____ The SEC is the current accounting standard-setting body in the United States.

5. ____ The inclusion of an added paragraph in an audit report after the scope (second) paragraph indicates that the financial statement contains a material misstatement.

6. ____ The PCAOB oversees the work of CPAs who audit companies that issue publicly traded securities.

7. ____ Nonpublic companies rarely have an audit performed on their financial statements because they do not issue publicly traded securities.

8. ____ The Auditing Standards Board works under FASB to resolve relatively simple issues.

9. ____ The Red Company creates a new type of transaction and is not sure how to apply current U.S. GAAP for its reporting. The EITF might be called on to provide guidance.

10. ____ Janice Hough serves as an investment analyst for a number of wealthy clients. She is likely to make use of EDGAR.

11. ____ The Accounting Standards Codification is one portion of U.S. GAAP.

12. ____ Audits are paid for by the creditors and investors of a company that receive the actual benefit of the

CPAs work.

13. ____ A CPA firm rarely has more than 100 auditors in its employment.

14. ____ The term presents fairly means that the financial information contained in a set of financial statements is correct.

15. ____ FASB is a governmental agency that works under the jurisdiction of the SEC.