ATG457 - Exam I Practice Questions
And Answers
Which of the following best describes the relationship between assurance
services and attest services?
All attest services require independence.
Which of the following has primary responsibility for the fairness of the
representations made in financial statements?
Client's management.
The most important benefit of having an annual audit by a public accounting firm
is to:
Provide assurance to investors and other outsiders that the financial statements are
reliable.
Which of these organizations has the responsibility to perform inspections of
auditors of public companies?
Public Company Accounting Oversight Board.
Which of the following did not precipitate the passage of the Sarbanes-Oxley Act
of 2002 to regulate public accounting firms?
Ethical scandals at the AICPA.
Assurance services
, Professional services that enhance the quality of information, or its context, for decision
makers.
Integrated audit
As required by the Sarbanes-Oxley Act and the Public Company Accounting Oversight
Board, an audit that includes providing assurance on both the financial statements and
internal control over financial reporting.
Agreed-upon procedures engagement
An attest engagement in which the CPAs agree to perform procedures for a specified
party and issue a report that is restricted to use by that party.
Review
An engagement designed to express limited assurance relating to subject matter or an
assertion.
Financial reporting framework
A set of criteria used to determine measurement, recognition, presentation, and
disclosure of all material items appearing in the financial statements.
American Institute of Certified Public Accountants
The national professional organization of CPAs engaged in promoting high professional
standards to ensure that CPAs serve the public interest.
Sarbanes-Oxley Act of 2002
A set of reforms that toughened penalties for corporate fraud, restricted the kinds of
consulting CPAs can perform for audit clients, and created the Public Company
Accounting Oversight Board to oversee CPAs and public accounting firms.
And Answers
Which of the following best describes the relationship between assurance
services and attest services?
All attest services require independence.
Which of the following has primary responsibility for the fairness of the
representations made in financial statements?
Client's management.
The most important benefit of having an annual audit by a public accounting firm
is to:
Provide assurance to investors and other outsiders that the financial statements are
reliable.
Which of these organizations has the responsibility to perform inspections of
auditors of public companies?
Public Company Accounting Oversight Board.
Which of the following did not precipitate the passage of the Sarbanes-Oxley Act
of 2002 to regulate public accounting firms?
Ethical scandals at the AICPA.
Assurance services
, Professional services that enhance the quality of information, or its context, for decision
makers.
Integrated audit
As required by the Sarbanes-Oxley Act and the Public Company Accounting Oversight
Board, an audit that includes providing assurance on both the financial statements and
internal control over financial reporting.
Agreed-upon procedures engagement
An attest engagement in which the CPAs agree to perform procedures for a specified
party and issue a report that is restricted to use by that party.
Review
An engagement designed to express limited assurance relating to subject matter or an
assertion.
Financial reporting framework
A set of criteria used to determine measurement, recognition, presentation, and
disclosure of all material items appearing in the financial statements.
American Institute of Certified Public Accountants
The national professional organization of CPAs engaged in promoting high professional
standards to ensure that CPAs serve the public interest.
Sarbanes-Oxley Act of 2002
A set of reforms that toughened penalties for corporate fraud, restricted the kinds of
consulting CPAs can perform for audit clients, and created the Public Company
Accounting Oversight Board to oversee CPAs and public accounting firms.
