Financial Reporting & Analysis Final
Exam Actual Questions and Answers
2026
What role does external financial reporting play in our
marketplace? -
correct answer ✅Capital Allocation
What is the objective of financial reporting as described in the
textbook? -
correct answer ✅to provide useful & verifiable information to
creditors & investors in a timely manner
Name the standard setting organizations that establish GAAP -
correct answer ✅Financial Accounting Standards Board (FASB),
Securities & Exchange Commission (SEC), and American Institute of
Certified Public Accountants (AICPA)
Briefly Describe the roles of FASB -
correct answer ✅roles include creation of new GAAP rules,
listening and enforcing new rules that are deemed necessary from
the overall accounting community
Briefly Describe the role SEC -
correct answer ✅roles include oversight of all publicly traded
companies as well as investigating these companies financial
,Financial Reporting & Analysis Final
Exam Actual Questions and Answers
2026
statements to make sure they're following the rules set forth by
GAAP
Which organizations set auditing standards for CPA firms? -
correct answer ✅Auditing Standards Board (ASB), American
Institute of Certified Public Accountants (AICPA), and Public
Companies Auditing Oversight Board (PCAOB)
What does the PCAOB do? -
correct answer ✅created by the Sarbanes-Oxley Act, its main role
is to oversee the audits on public companies and other issuers in
order to protest the interest of investors and further the public
interest in the preparation of informative, accurate, and
independent audit reports
Name the 5 key provisions of the Sarbanes-Oxley Act -
correct answer ✅1)Establishes an oversight board, the Public
Company Accounting Oversight Board (PCAOB), for accounting
practices. The PCAOB has oversight and enforcement authority and
establishes auditing, quality control, and independence standards
and rules.
, Financial Reporting & Analysis Final
Exam Actual Questions and Answers
2026
2)Implements stronger independence rules for auditors. Audit
partners, for example, are required to rotate every five years, and
auditors are prohibited from offering certain types of consulting
services to corporate clients.
3)Requires CEOs and CFOs to personally certify that financial
statements and disclosures are accurate and complete, and
requires CEOs and CFOs to forfeit bonuses and profits when there is
an accounting restatement.
4)Requires audit committees to be comprised of independent
members and members with financial expertise.
5)Requires codes of ethics for senior financial officers.
Briefly Describe the roles of the AICPA -
correct answer ✅it appoints committee on accounting
procedures as well as it has oversight over the Accounting
Procedures Board (ASB)
Exam Actual Questions and Answers
2026
What role does external financial reporting play in our
marketplace? -
correct answer ✅Capital Allocation
What is the objective of financial reporting as described in the
textbook? -
correct answer ✅to provide useful & verifiable information to
creditors & investors in a timely manner
Name the standard setting organizations that establish GAAP -
correct answer ✅Financial Accounting Standards Board (FASB),
Securities & Exchange Commission (SEC), and American Institute of
Certified Public Accountants (AICPA)
Briefly Describe the roles of FASB -
correct answer ✅roles include creation of new GAAP rules,
listening and enforcing new rules that are deemed necessary from
the overall accounting community
Briefly Describe the role SEC -
correct answer ✅roles include oversight of all publicly traded
companies as well as investigating these companies financial
,Financial Reporting & Analysis Final
Exam Actual Questions and Answers
2026
statements to make sure they're following the rules set forth by
GAAP
Which organizations set auditing standards for CPA firms? -
correct answer ✅Auditing Standards Board (ASB), American
Institute of Certified Public Accountants (AICPA), and Public
Companies Auditing Oversight Board (PCAOB)
What does the PCAOB do? -
correct answer ✅created by the Sarbanes-Oxley Act, its main role
is to oversee the audits on public companies and other issuers in
order to protest the interest of investors and further the public
interest in the preparation of informative, accurate, and
independent audit reports
Name the 5 key provisions of the Sarbanes-Oxley Act -
correct answer ✅1)Establishes an oversight board, the Public
Company Accounting Oversight Board (PCAOB), for accounting
practices. The PCAOB has oversight and enforcement authority and
establishes auditing, quality control, and independence standards
and rules.
, Financial Reporting & Analysis Final
Exam Actual Questions and Answers
2026
2)Implements stronger independence rules for auditors. Audit
partners, for example, are required to rotate every five years, and
auditors are prohibited from offering certain types of consulting
services to corporate clients.
3)Requires CEOs and CFOs to personally certify that financial
statements and disclosures are accurate and complete, and
requires CEOs and CFOs to forfeit bonuses and profits when there is
an accounting restatement.
4)Requires audit committees to be comprised of independent
members and members with financial expertise.
5)Requires codes of ethics for senior financial officers.
Briefly Describe the roles of the AICPA -
correct answer ✅it appoints committee on accounting
procedures as well as it has oversight over the Accounting
Procedures Board (ASB)
