,DOWNLOAD THE Test Bank for Auditing The Art and Science of Assurance Engagem
m m m m m m m m m m m m
ents 14th Edition Arens
m m m
Auditing,m 14em (Arens)
Chapterm2m m ThemPublicmAccountingmProfessionmandmAuditmQuality
2.1 Describemthempublicmaccountingmindustry
1 ) Onemofmthemmain madvantages mofma m"big"mpublicmaccountingmfirm mis
A ) theirmlowermprofessionalmfees mduemtomeconomies mofmscale.
B ) theirmabilitymtomsharemwith mthemclientmknowledgemandmexperiencemfrom msimilarmcompanies mthey
mhavemaudited.
C ) theirmabilitymtomauditmnearlymallmthemlargestmcompanies mworldwide.
D ) themincreasedmreliabilitymofmtheirmauditmrepor
ts.mAnswer:m C
Diff:m2 Type:mMCm m PagemRef:m25
LearningmObj.:m 2-1 m Describemthempublicmaccountingmindustry
2 ) Nationalmaccountingmfirms min m2015 mweremthosemwith
A ) offices min mmostmmajormcities mandmrevenues moverm$100 mmillion.
B ) international mrepresentation min mmostmcities maroundmthemworld.
C ) offices min mallmmajormcities min mCanada mandmrevenues moverm$75 mmillion.
D ) nationalmandminternational maffiliations mprovidingmservices min mallmmajormcent
res.mAnswer:m A
Diff:m3 Type:mMCm m PagemRef:m25-26
LearningmObj.:m 2-1 m Describemthempublicmaccountingmindustry
3 ) Approximatelymhowmmanympublicmaccountingmfirms min mCanada mhavemmoremthan m50 mprofessional mstaff?
A ) 25
B ) 50
C ) 75
D ) 100
Answer:m B
Diff:m3 Type:mMCm m PagemRef:m26
LearningmObj.:m 2-1 m Describemthempublicmaccountingmindustry
4 ) Whatmis mthemsizemofmmostmsmallmlocalmpublicmaccountingmfirms min mCanada?
A ) fewermthan m25 memployees
B ) between m25 mandm49 memployees
C ) between m50 mandm75 memployees
D ) moremthan m75 memployee
s mAnswer:m A
Diff:m3 Type:mMCm m PagemRef:m26
LearningmObj.:m 2-1 m Describemthempublicmaccountingmindustry
1
©m2019 mPearson mCanada mIn
c.
mynursytest.store
,DOWNLOAD THE Test Bank for Auditing The Art and Science of Assurance Engagem
m m m m m m m m m m m m
ents 14th Edition Arens
m m m
5 ) Themmostmcommon morganizational mform musedmbympublicmaccountingmfirms mis
A ) solemproprietorshipmormpartnership.
B ) professional mcorporation.
C ) corporation.
D ) co-
operative.mAns
wer:m A
Diff:m1 Type:mMCm m PagemRef:m26
LearningmObj.:m 2-1 m Describemthempublicmaccountingmindustry
6 ) Largemaccountingmfirms maremoften mlimitedmliabilitympartnerships m(LLPs)mbecausemifmtheirmaudi
ts maremconductedmin maccordancemwith mCASm(Canadian mAuditingmStandards),
A ) partners mnotmon mthemengagementmwouldmnotmbemliablemtompaymwith mtheirmpersonalmassets mwhen mthe
mLLPmis msued.
B ) improvedmqualitymcontrolmpractices mcan mbeminitiatedmusingmtechnicalmpersonnel.
C ) moremformalmrequirements maremin mplacemwhen mreportingmtomfederalmtaxmauthorities.
D ) partners maremliablemtompaymwith monlyma mlimitedmportion mofmtheirmpersonalmassets mwhen mthemLLPmi
s msued.mAnswer:m A
Diff:m3 Type:mMCm m PagemRef:m26
LearningmObj.:m 2-1 m Describemthempublicmaccountingmindustry
7 ) Mostminternational mandmnationalmaccountingmfirms min mCanada maremcomprisedmofmprofessional maccoun
tants mwith mthemdesignation
A ) CIA.
B ) CPA.
C ) CFE.
D ) CISA.
Answer:m B
Diff:m2 Type:mMCm m PagemRef:m27
LearningmObj.:m 2-1 m Describemthempublicmaccountingmindustry
8 ) Whatmaremthemstaffmlevels mandmresponsibilities matmpublicmaccountingmfirms?
Answer:m 1.mPartnerm-
mLeads mthemengagement,mreviews mthemoverall mauditmwork,mandmis minvolvedmin msignificantmauditmdecision
s.mAmpartnermhas mthemultimatemresponsibilitymformconductingmthemauditmandmmaintainingmclientmrelations
.mAveragemexperiencemofm10 myears.
2. Seniormmanagerm-
mLeads mthemengagementmandmreviews mthemteam's mwork.mWorks mdirectlymwith mthempartnermandmassistsmi
n mclientmrelationships.mAveragemexperiencemofm7-10 myears.
3. Managerm-mHelps mthemin-chargemplan mandmmanagemthemaudit,mreviews mthemin-
charge's mwork,mandmmanages mrelations mwith mthemclient.mAmmanagermmaymbemresponsiblemformmoremtha
n monemengagementmatmthemsamemtime.mAveragemexperiencemofm5-7 myears.
4. Seniormormin-chargemauditorm-
mCoordinates mandmis mresponsiblemformthemauditmfieldmwork,mincludingmsupervisingmandmreviewi
ngmstaffmwork.mAveragemexperiencemofm2-5 myears.
5. Staffmaccountantm-mPerforms mmostmofmthemdetailedmauditmwork.mAveragemexperiencemofm0-
2 myears.mDiff:m2 Type:mES PagemRef:m27
LearningmObj.:m 2-1 m Describemthempublicmaccountingmindustry
2
©m2019 mPearson mCanada mIn
c.
mynursytest.store
, DOWNLOAD THE Test Bank for Auditing The Art and Science of Assurance Engagem
m m m m m m m m m m m m
ents 14th Edition Arens
m m m
9 ) Whatmaremthemdifferentmbusiness morganization mstructures mthatmanmaccountantmmaymuse?mWhatma
remthemadvantages mofmthesemstructures?
Answer:m Accountants mmaymestablish ma msolemproprietorship,ma mpartnership,ma mlimitedmliabilitympartner
ship,morma mlimitedmliabilitymcorporation.mThemlattermtwomstructures marempermittedmonlymin mcertain mprov
inces,mbasedmupon mprovincialmlegislation.
Advantages:
Amsolemproprietorshipmis mthemonlymchoicemifmtheremis monlymonemPA.mItmis ma msimplembusiness mstructure.
Ampartnershipmis musedmtomallocatemincomemtomallmpartners mandmhelps mensuremthatmallmpartners maremrespo
nsiblemformthemactions mofmthemorganization.
Amlimitedmliabilitympartnershipm(ormlimitedmliabilitymcorporation)mis musedmtomlimitmliabilitymtomonlymthose
mpartners mwhomworkedmon mormsupervised ma mparticularmengagement.mThis mhelps mprotectmthempersonal mass
ets mofmpartners.
Diff:m2 Type:mES PagemRef:m26-27
LearningmObj.:m 2-1 m Describemthempublicmaccountingmindustry
2.2 Identifymthemorganizations mthatmaffectmthempublicmaccountingmprofession mandmtheirmrole
1 ) ThemCanadamBusinessmCorporationmActmgavemauthoritymtomCanadian maccountingmandmauditingmstan
dard-msetters mbymstatingmthatmfinancialmstatements
A ) mustmbemcompiledmin maccordancemwith mInternational mFinancialmReportingmStandards.
B ) shouldmbempreparedmin maccordancemwith mthemstandards min mthemCPAmCanada mHandbook.
C ) mustmbemauditedmbymaccountants mthatmresidemin mCanada.
D ) shouldmbempreparedmin maccordancemwith mlocalmfinancialmreportingmstanda
rds.mAnswer:m B
Diff:m2 Type:mMCm m PagemRef:m29
LearningmObj.:m 2-2 m Identifymthemorganizations mthatmaffectmthempublicmaccountingmprofession mandmtheirmrole
2 ) Themreason mformadoptingmthemCASs mis mto
A ) complymwith mrequirements min mthemCanadamBusinessmCorporationsmAct.
B ) respondmtomthemincreasedmlitigation mrisks mfacedmbymauditors.
C ) bemconsistentmwith mtheminternational mstandards mofmauditing.
D ) simplifymthemauditingmproces
s.mAnswer:m C
Diff:m2 Type:mMCm m PagemRef:m29
LearningmObj.:m 2-2 m Identifymthemorganizations mthatmaffectmthempublicmaccountingmprofession mandmtheirmrole
3 ) Themimplementation mofmthemSarbanes-
Oxleymrequirements min mthemU.S.mresultedmin mthemcreation mofmthemPCAOBmtomoverseemlistedmcompa
nies'mauditors mandmdevelopmauditmstandards.mThemimpactmofmthis mrequirementmin mCanada mwas
A ) themcreation mofmnewmauditingmstandards mtomensurembettermqualitymcontrolmformaudits.
B ) revision mtomthemrules mofmprofessionalmconductmformCPAs.
C ) additional mtrainingmrequirements mformbecomingman mauditor.
D ) themcreation mofmthemCPABmtomoverseemCanadian mauditmprofessio
nals.mAnswer:m D
Diff:m3 Type:mMCm m PagemRef:m29
LearningmObj.:m 2-2 m Identifymthemorganizations mthatmaffectmthempublicmaccountingmprofession mandmtheirmrole
3
©m2019 mPearson mCanada mIn
c.
mynursytest.store
m m m m m m m m m m m m
ents 14th Edition Arens
m m m
Auditing,m 14em (Arens)
Chapterm2m m ThemPublicmAccountingmProfessionmandmAuditmQuality
2.1 Describemthempublicmaccountingmindustry
1 ) Onemofmthemmain madvantages mofma m"big"mpublicmaccountingmfirm mis
A ) theirmlowermprofessionalmfees mduemtomeconomies mofmscale.
B ) theirmabilitymtomsharemwith mthemclientmknowledgemandmexperiencemfrom msimilarmcompanies mthey
mhavemaudited.
C ) theirmabilitymtomauditmnearlymallmthemlargestmcompanies mworldwide.
D ) themincreasedmreliabilitymofmtheirmauditmrepor
ts.mAnswer:m C
Diff:m2 Type:mMCm m PagemRef:m25
LearningmObj.:m 2-1 m Describemthempublicmaccountingmindustry
2 ) Nationalmaccountingmfirms min m2015 mweremthosemwith
A ) offices min mmostmmajormcities mandmrevenues moverm$100 mmillion.
B ) international mrepresentation min mmostmcities maroundmthemworld.
C ) offices min mallmmajormcities min mCanada mandmrevenues moverm$75 mmillion.
D ) nationalmandminternational maffiliations mprovidingmservices min mallmmajormcent
res.mAnswer:m A
Diff:m3 Type:mMCm m PagemRef:m25-26
LearningmObj.:m 2-1 m Describemthempublicmaccountingmindustry
3 ) Approximatelymhowmmanympublicmaccountingmfirms min mCanada mhavemmoremthan m50 mprofessional mstaff?
A ) 25
B ) 50
C ) 75
D ) 100
Answer:m B
Diff:m3 Type:mMCm m PagemRef:m26
LearningmObj.:m 2-1 m Describemthempublicmaccountingmindustry
4 ) Whatmis mthemsizemofmmostmsmallmlocalmpublicmaccountingmfirms min mCanada?
A ) fewermthan m25 memployees
B ) between m25 mandm49 memployees
C ) between m50 mandm75 memployees
D ) moremthan m75 memployee
s mAnswer:m A
Diff:m3 Type:mMCm m PagemRef:m26
LearningmObj.:m 2-1 m Describemthempublicmaccountingmindustry
1
©m2019 mPearson mCanada mIn
c.
mynursytest.store
,DOWNLOAD THE Test Bank for Auditing The Art and Science of Assurance Engagem
m m m m m m m m m m m m
ents 14th Edition Arens
m m m
5 ) Themmostmcommon morganizational mform musedmbympublicmaccountingmfirms mis
A ) solemproprietorshipmormpartnership.
B ) professional mcorporation.
C ) corporation.
D ) co-
operative.mAns
wer:m A
Diff:m1 Type:mMCm m PagemRef:m26
LearningmObj.:m 2-1 m Describemthempublicmaccountingmindustry
6 ) Largemaccountingmfirms maremoften mlimitedmliabilitympartnerships m(LLPs)mbecausemifmtheirmaudi
ts maremconductedmin maccordancemwith mCASm(Canadian mAuditingmStandards),
A ) partners mnotmon mthemengagementmwouldmnotmbemliablemtompaymwith mtheirmpersonalmassets mwhen mthe
mLLPmis msued.
B ) improvedmqualitymcontrolmpractices mcan mbeminitiatedmusingmtechnicalmpersonnel.
C ) moremformalmrequirements maremin mplacemwhen mreportingmtomfederalmtaxmauthorities.
D ) partners maremliablemtompaymwith monlyma mlimitedmportion mofmtheirmpersonalmassets mwhen mthemLLPmi
s msued.mAnswer:m A
Diff:m3 Type:mMCm m PagemRef:m26
LearningmObj.:m 2-1 m Describemthempublicmaccountingmindustry
7 ) Mostminternational mandmnationalmaccountingmfirms min mCanada maremcomprisedmofmprofessional maccoun
tants mwith mthemdesignation
A ) CIA.
B ) CPA.
C ) CFE.
D ) CISA.
Answer:m B
Diff:m2 Type:mMCm m PagemRef:m27
LearningmObj.:m 2-1 m Describemthempublicmaccountingmindustry
8 ) Whatmaremthemstaffmlevels mandmresponsibilities matmpublicmaccountingmfirms?
Answer:m 1.mPartnerm-
mLeads mthemengagement,mreviews mthemoverall mauditmwork,mandmis minvolvedmin msignificantmauditmdecision
s.mAmpartnermhas mthemultimatemresponsibilitymformconductingmthemauditmandmmaintainingmclientmrelations
.mAveragemexperiencemofm10 myears.
2. Seniormmanagerm-
mLeads mthemengagementmandmreviews mthemteam's mwork.mWorks mdirectlymwith mthempartnermandmassistsmi
n mclientmrelationships.mAveragemexperiencemofm7-10 myears.
3. Managerm-mHelps mthemin-chargemplan mandmmanagemthemaudit,mreviews mthemin-
charge's mwork,mandmmanages mrelations mwith mthemclient.mAmmanagermmaymbemresponsiblemformmoremtha
n monemengagementmatmthemsamemtime.mAveragemexperiencemofm5-7 myears.
4. Seniormormin-chargemauditorm-
mCoordinates mandmis mresponsiblemformthemauditmfieldmwork,mincludingmsupervisingmandmreviewi
ngmstaffmwork.mAveragemexperiencemofm2-5 myears.
5. Staffmaccountantm-mPerforms mmostmofmthemdetailedmauditmwork.mAveragemexperiencemofm0-
2 myears.mDiff:m2 Type:mES PagemRef:m27
LearningmObj.:m 2-1 m Describemthempublicmaccountingmindustry
2
©m2019 mPearson mCanada mIn
c.
mynursytest.store
, DOWNLOAD THE Test Bank for Auditing The Art and Science of Assurance Engagem
m m m m m m m m m m m m
ents 14th Edition Arens
m m m
9 ) Whatmaremthemdifferentmbusiness morganization mstructures mthatmanmaccountantmmaymuse?mWhatma
remthemadvantages mofmthesemstructures?
Answer:m Accountants mmaymestablish ma msolemproprietorship,ma mpartnership,ma mlimitedmliabilitympartner
ship,morma mlimitedmliabilitymcorporation.mThemlattermtwomstructures marempermittedmonlymin mcertain mprov
inces,mbasedmupon mprovincialmlegislation.
Advantages:
Amsolemproprietorshipmis mthemonlymchoicemifmtheremis monlymonemPA.mItmis ma msimplembusiness mstructure.
Ampartnershipmis musedmtomallocatemincomemtomallmpartners mandmhelps mensuremthatmallmpartners maremrespo
nsiblemformthemactions mofmthemorganization.
Amlimitedmliabilitympartnershipm(ormlimitedmliabilitymcorporation)mis musedmtomlimitmliabilitymtomonlymthose
mpartners mwhomworkedmon mormsupervised ma mparticularmengagement.mThis mhelps mprotectmthempersonal mass
ets mofmpartners.
Diff:m2 Type:mES PagemRef:m26-27
LearningmObj.:m 2-1 m Describemthempublicmaccountingmindustry
2.2 Identifymthemorganizations mthatmaffectmthempublicmaccountingmprofession mandmtheirmrole
1 ) ThemCanadamBusinessmCorporationmActmgavemauthoritymtomCanadian maccountingmandmauditingmstan
dard-msetters mbymstatingmthatmfinancialmstatements
A ) mustmbemcompiledmin maccordancemwith mInternational mFinancialmReportingmStandards.
B ) shouldmbempreparedmin maccordancemwith mthemstandards min mthemCPAmCanada mHandbook.
C ) mustmbemauditedmbymaccountants mthatmresidemin mCanada.
D ) shouldmbempreparedmin maccordancemwith mlocalmfinancialmreportingmstanda
rds.mAnswer:m B
Diff:m2 Type:mMCm m PagemRef:m29
LearningmObj.:m 2-2 m Identifymthemorganizations mthatmaffectmthempublicmaccountingmprofession mandmtheirmrole
2 ) Themreason mformadoptingmthemCASs mis mto
A ) complymwith mrequirements min mthemCanadamBusinessmCorporationsmAct.
B ) respondmtomthemincreasedmlitigation mrisks mfacedmbymauditors.
C ) bemconsistentmwith mtheminternational mstandards mofmauditing.
D ) simplifymthemauditingmproces
s.mAnswer:m C
Diff:m2 Type:mMCm m PagemRef:m29
LearningmObj.:m 2-2 m Identifymthemorganizations mthatmaffectmthempublicmaccountingmprofession mandmtheirmrole
3 ) Themimplementation mofmthemSarbanes-
Oxleymrequirements min mthemU.S.mresultedmin mthemcreation mofmthemPCAOBmtomoverseemlistedmcompa
nies'mauditors mandmdevelopmauditmstandards.mThemimpactmofmthis mrequirementmin mCanada mwas
A ) themcreation mofmnewmauditingmstandards mtomensurembettermqualitymcontrolmformaudits.
B ) revision mtomthemrules mofmprofessionalmconductmformCPAs.
C ) additional mtrainingmrequirements mformbecomingman mauditor.
D ) themcreation mofmthemCPABmtomoverseemCanadian mauditmprofessio
nals.mAnswer:m D
Diff:m3 Type:mMCm m PagemRef:m29
LearningmObj.:m 2-2 m Identifymthemorganizations mthatmaffectmthempublicmaccountingmprofession mandmtheirmrole
3
©m2019 mPearson mCanada mIn
c.
mynursytest.store
