Who is most likely to perform due diligence?

• investment bankers
• loan officers
• angel investors
• All of these people may perform due diligence.

Which of the following is NOT one of the places where due diligence might actually happen?

• virtual data room
• in a public place with a lot of fanfare
• offsite team room
• on-site

How could technology impact the audit space?

• Technology will not impact the space.
• Robots could be used efficiently in inventory counts.
• Robots will complete entire audits.
• none of these answers

Why is a 100% audit not possible for some companies?

• Some companies are too large.
• People are dishonest.
• Some companies have incomplete data.
• none of these answers

What is one major difference between a compilation and a review?

• A CPA conducting a review must be independent.
• Anyone in the company can complete a review.
• Skills used in compilations do not transfer to other professions.
• A compilation is completed by a CPA.

When will a company most likely perform an internal audit?

• monthly
• before an independent audit
• quarterly
• randomly

Which of the following best describes the main goal of any audit or due diligence project?

• Make sure the financial, business processes, and operational details of a corporation are proper.
• Get the company successfully through an SEC investigation.
• Find all the things that are wrong in a corporation's financials.
• none of these answers

Why might one company have to complete more due diligence than another in a merger?

• none of these answers
• It is important for a company to know what it is buying.
• Acquisitions can be risky.
• If there is a large size discrepancy the merger seems more like an acquisition.

What is the goal of a tax audit?

• To make sure you are paying your imposed fines.
• To make sure you are paying your taxes.
• To investigate criminal activity.
• none of these answers

What is NOT a question that needs to be answered when completing financial due diligence?

• Is the company worth what it seems to be?
• Is the deal worth doing?
• All of these choices are questions that need to be answered.
• Are there any major risks that could be a problem?

Which of the following is the least independent piece of information to collect about a company that is a potential M&A target?

• internal audits
• Dun and Bradstreet reports
• audited financial statements
• relevant macroeconomics outlooks from an independent research organization

Why does a certified audit present a high degree of risk for a CPA?

• They are difficult to complete accurately.
• Auditors can be held liable for inaccuracies in the audit.
• They cost a CPA a lot of money.
• all of these answers

Which choice is the best example of an independent auditor?

• A CPA who has a significant investment in the company being audited.
• A CPA who currently performs payroll services at the company its auditing.
• A CPA who is the best friend of upper financial management at the company being audited.
• None of these are independent auditors.

What is typically included in testing for the balance sheet?

• All of these are typically included in testing for the balance sheet.
• Existence
• Rights and Obligations
• Valuation or Validity

Who is not one of the common players that engages in due diligence Projects?

• private equity firms
• corporations
• All of these may commonly engage in due diligence projects.
• consultants

What are the two elements of being independent?

• Independence of Rights and Obligations
• none of these answers
• Independence of Mind and of Appearance
• Independence of Valuation and Validity

Why might an auditor issue a disclaimer of opinion after an audit?

• All of these may cause an auditor to issue a disclaimer of opinion.
• There is a scope limitation that prevented a complete audit.
• The auditor is not independent.
• There were other issues that prevented the completeness of the audit.

What is the name of the book that NFP and government professionals need to be familiar with?

• The Green Book
• The Red Book
• The Yellow Book
• The Black Book

In an audit, you are often looking for ________ in past numbers, but in a due diligent project you are assessing _______ value

• accuracy; past
• validity; past
• accuracy; present
• accuracy; future