ACCT444 Week 1 Quiz Latest 2017

Question Question 1 3 / 3 pts (TCO 3) The organization that is responsible for providing oversight for auditors of public companies is called the _____ Auditing Standards Board. American Institution of Public Accountants. Accounting Oversight Board. Public Company Accounting Oversight Board. Question 2 3 / 3 pts (TCO 1) Standards issued by the Public Company Accounting Oversight Board must be followed by CPAs who audit _____ both private and public companies. public companies only. private companies, public companies, and nonprofit entities. private companies only. Question 3 3 / 3 pts (TCO 1) Which of the following actions should a CPA firm take to comply with the AICPA's quality control standards? Establish procedures that comply with the standards of the Sarbanes-Oxley Act. Use attributes sampling techniques in testing internal controls. Consider inherent risk and control risk before determining detection risk. Establish policies to ensure that the audit work meets applicable professional standards. Question 4 3 / 3 pts (TCO 1) Any service that requires a CPA firm to issue a report about the reliability of an assertion that is made by another party is a(n) _____ accounting and bookkeeping service. attestation service. assurance service. tax service. Question 5 3 / 3 pts (TCO 1) Jackson & Company, CPAs, plan to audit the financial statements of Perigee Technologies, an issuer as defined under the Sarbanes-Oxley Act of 2002. Which of the following situations would impair Jackson's independence? Provision of personal tax services to Johnson, the accounts payable manager of Perigee Preparation of Perigee's routine annual tax return, where Jackson's fee will be calculated as a percentage of the tax refund obtained Audit of Perigee's internal control is performed contemporaneously with the annual financial statement audit Discovering that Lowe, the chief financial officer of Perigee, started his accounting career 10 years earlier as a staff accountant for Jackson & Company and continues to maintain ties with current partners at the firm Question 6 3 / 3 pts (TCO 3) Burrow & Co., CPAs, have provided annual audit and tax compliance services to Mare Corp. for several years. Mare has been unable to pay Burrow in full for services Burrow rendered 19 months ago. Burrow is ready to begin fieldwork for the current year's audit. Under the ethical standards of the profession, which of the following arrangements will permit Burrow to begin the fieldwork on Mare's audit? Mare sets up a 2-year payment plan with Burrow to settle the unpaid fee balance. Mare commits to pay the past due fee in full before the audit report is issued. Mare gives Burrow an 18-month note payable for the full amount of the past due fees before Burrow begins the audit. Mare engages another firm to perform the fieldwork, and Burrow is limited to reviewing the workpapers and issuing the audit report. Question 7 0 / 3 pts (TCO 3) Interpretations of Rule 101 prohibit covered members from owning any stock or other direct investment in audit clients. Covered members include all but which of the following? All partners in an office that have no responsibility for the engagement The firm and its employee benefit plans Individuals on the attest engagement All of the above describe covered members. Question 8 3 / 3 pts (TCO 3) Several months after an unqualified audit report was issued, the auditor discovered the financial statements were materially misstated.The client’s CEO agrees that there are misstatements, but refuses to correct them. She claims that confidentiality prevents the CPA from informing anyone. The CEO is correct and the auditor must maintain confidentiality. The CEO is incorrect, but because the audit report has been issued, it is too late. The CEO is correct, but to be ethically correct the auditor should violate the confidentiality rule and disclose the error. The CEO is incorrect, and the auditor has an obligation to issue a revised audit report, even if the CEO will not correct the financial statements. Question 9 3 / 3 pts (TCO 1) The phrase U.S. generally accepted accounting principles is an accounting term that includes broad guidelines of general application but not detailed practices and procedures. encompasses the conventions, rules, and procedures necessary to define U.S. accepted accounting practice at a particular time. provides a measure of conventions, rules, and procedures governed by the AICPA. is included in the audit report to indicate that the audit has been conducted in accordance with generally accepted auditing standards (GAAS). Question 10 3 / 3 pts (TCO 1) The auditor of an issuer may provide which of the following tax services? Services related to confidential tax transactions Tax services for officers of the issuer Tax services for immediate family members of corporate officers Tax planning services