Audit AKSK 1

Which of the following best describes why an independent auditor is asked to express

an opinion on the fair presentation of financial statements?

• It is difficult to prepare financial statements that fairly present a company’s financial

  position, operations, and cash flows without the expertise of an independent auditor.

• It is management’s responsibility to seek available independent aid in the appraisal

  of the financial information shown in its financial statements.

• The opinion of an independent party is needed because a company may not be

  objective with respect to its own financial statements.

• It is a customary courtesy that all stockholders of a company receive an independent report on management’s stewardship of the affairs of the business.

Which of the following professional services is an attestation engagement?

• A consulting service engagement to provide computer-processing advice to a client

• An engagement to report on compliance with statutory requirements

• An income tax engagement to prepare company's tax returns

• The preparation of financial statements from a client’s financial records

Which of the following attributes is likely to be unique to the audit work of CPAs as compared to the work performed by practitioners of other professions?

• Independence

• Competence

• having professional scepticism

• Complete and disciplined body of knowledge (BOK)

Operational audits generally have been conducted by internal auditors and governmental audit agencies but may be performed by certified public accountants. A primary purpose of an operational audit is to provide ...

• a means of assurance that internal accounting controls are functioning as planned.

• a measure of management performance in meeting organizational goals.

• the results of internal examinations of financial and accounting matters to a company’s top-level management.

• aid to the independent auditor, who is conducting the audit of the financial statements.

Which of the following best describes the operational audit?

• It concentrates on seeking aspects of operations in which waste could be reduced by the introduction of controls.

• It focuses on verifying the fair presentation of a company’s results of operations.

• It concentrates on implementing financial and accounting control in a newly organized company.

• It requires the constant review by internal auditors of the administrative controls as they relate to the operations of the company.

Compliance auditing even often extends beyond audits; leading to the expression of opinions on the fairness of financial presentation. It also includes audits of efficiency, economy, and effectiveness of operation, as well as ....

• completeness of consideration to the intended regulation.

• adherence to specific rules or procedures.

• monitoring and evaluation of regulation.

• internal controls toward laws and regulations.

Independent auditing can best be described as ....

• a branch of accounting.

• a discipline that attests to the results of accounting and other functional operations and data.

• a professional activity that measures and communicates financial and business

  data.

• a regulatory function that prevents the issuance of improper financial information.

International Standards on Auditing are established by the ....

• International Auditing Standards Board.

• International Auditing and Assurance Standards Board.

• Auditing Standards Board.

• International Auditing, Assurance, and Attestation Standards Board.

Which of the following best describes what is meant by "Auditing Standards"?

• Acts to be performed by the auditor.

• Measures of the quality of the auditor’s performance.

• Procedures to be used to gather evidence to support financial statements.

• guidance to behave in auditing profession.

A CPA firm is reasonably assured of meeting its responsibility to provide services that conform with professional standards by ....

• adhering to generally accepted auditing standards.

• having an appropriate system of quality control.

• joining professional societies that enforce ethical conduct.

• maintaining an attitude of independence in its engagements.