,DOWNLOADgTHEgTestgBankgforgAuditinggandgAssurancegServicesg11thgEditiongMess
ier
Auditingg&gAssurancegServices:gAgSystematicgApproach,g11eg(Messier)gChap
terg2g ThegFinancialgStatementgAuditinggEnvironment
1) AgseriesgofgbusinessgandgrelatedgauditinggfailuresgledgtogthegpassagegofgthegSarbanes-
OxleygActg(2002).
2) Thegprimarygauditgcontextgwithgwhichgangauditorgisgconcernedgisgthegauditee'sgindustryg
orgbusiness.
3) Thegauditgcommitteeggenerallygincludesgseniorgexecutivesgofgthegorganization.
4) Agfinancialgstatementgauditgisggenerallygorganizedgbasedgongthegfivegbasicgbusinessgprocesse
sgorgcycles.
5) Onegofgthegfivegbasicgbusinessgprocessesgisgthegwarehousinggcycle.
6) ThegASB'sgauditinggstandardsgcontaingagprefacegthatgincludesgPrinciplesgUnderlyinggangAud
itgConductedgingAccordancegwithgGAAS.
7) PCAOBgauditinggstandardsgmustgbegfollowedgongallgfinancialgstatementgauditsgperformedgi
ngthegU.S.
8) AgfinancialgstatementgauditgmustgbegconductedgbasedgongGAAP.
9) Generally,gthegfinancialgstatementsgofgU.S.gcompaniesgmustgbegpreparedgbasedgongGAAP.
10) PCAOBgauditinggstandardsgmustgbegfollowedgongallgauditsgofgpublicgcompanies'gfinanci
algstatements.
11) ThegAuditgCommitteegconsistsgof:
A) membersgofgmanagement.
B) agsubcommitteegofgthegAICPAgwhogestablishgthegSAS.
C) membersgofgthegBoardgofgDirectors.
D) appointedggovernmentgoverseers.
12) Whatgorganizationgisgresponsiblegforgsettinggauditinggstandardsgforgauditsgofgpublicly-
tradedgcompaniesgingthegU.S.?
A) AICPA.
B) FASB.
C) GASB.
D) PCAOB.
1
Copyrightg2019g©gMcGraw-
HillgEducation.gAllgrightsgreserved.gNogreproductiongorgdistributiongwithoutgthegpriorgwrittengconsentgofgMcGr
aw-HillgEducation.
mynursytest.store
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ier
13) ThegPublicgCompanygAccountinggOversightgBoard'sgrolegisgto:
A) conductgthegfinalgreviewgofgauditors'gworkgbeforegthegauditor'sgopiniongisgissued.
B) overseegthegauditorsgofgpublicgcompaniesgingordergtogprotectgtheginterestsgofginvestors.
C) conductgauditsgofggovernmentalgentities.
D) sanctiongauditorsgwhogfailgtogfollowgGAAS.
14) ThegauthoritativegbodygdesignedgtogpromulgategstandardsgconcerninggagCPA'sgassociationg
withgauditedgfinancialgstatementsgofgangentitygthatgisgrequiredgtogfilegfinancialgstatementsgwithgt
hegSECgisgthe:
A) financialgaccountinggstandardsgboard.
B) generalgaccountinggoffice.
C) publicgcompanygaccountinggoversightgboard.
D) auditinggstandardsgboard.
15) Thegauditorgmustgbegindependentgofgthegauditeegunless:
A) theglackgofgindependencegdoesgnotginfluenceghisgorghergprofessionalgjudgment.
B) bothgpartiesgagreegthatgthegindependencegissuegisgnotgagproblem.
C) theglackgofgindependencegisginsignificant.
D) nonegofgthegabove—thegauditorgcannotglackgindependence.
16) WhichgprinciplegofgthegPrinciplesgUnderlyinggangAuditgConductedgingAccordancegwithgGAAS
describesgwheregauditorsgaregrequiredgtogplangthegworkgandgproperlygsuperviseganygassistants?
A) PurposegofgangAuditgandgPremisegupongwhichgangAuditgisgConducted.
B) Performance.
C) Reporting.
D) Responsibilities.
17) Whichgofgthegfollowinggbestgdescribesgtheggeneralgcharactergofgthegthreegprinciplesgthatgar
eglistedgingthegPerformancegsectiongofgthegPrinciplesgUnderlyinggangAuditgConductedgingAcc
ordancegwithgGAAS?
A) Thegpurposegandgvaluegofgagfinancialgstatementgauditgandglaysgoutgthegresponsibilitiesg
ofgmanagementgforgangeffectivegauditgtogbegpossible.
B) Thegfundamentalgresponsibilitiesgandgcharacteristicsgofgangauditor.
C) Auditors'gresponsibilitiesgingperforminggangeffectivegaudit.
D) Auditorsgprovidegagwrittengreportgthatgexpressesgtheirgopiniongaboutgthegfinancialgstatements.
18) ThegResponsibilitiesgsectiongofgthegPrinciplesgUnderlyinggangAuditgConductedgingAccordanc
egwithgGAASgstatesgthatgauditorsgaregresponsiblegforghavinggappropriategcompetencegand:
A) independencegwithgrespectgtogthegfinancialgstatementsgandgsupplementarygdisclosures.
B) exercisinggprofessionalgcaregasgjudgedgbygpeergreviewers.
C) capabilitiesgtogperformgthegaudit.
D) objectivitygasgangauditorgasgverifiedgbygpropergsupervision.
2
Copyrightg2019g©gMcGraw-
HillgEducation.gAllgrightsgreserved.gNogreproductiongorgdistributiongwithoutgthegpriorgwrittengconsentgofgMcGr
aw-HillgEducation.
mynursytest.store
, DOWNLOADgTHEgTestgBankgforgAuditinggandgAssurancegServicesg11thgEditiongMess
ier
19) ThegReportinggsectiongofgthegPrinciplesgUnderlyinggangAuditgConductedgingAccordancegwith
gGAASgrequiresgthatgthegreport,g"statesgwhethergthegfinancialgstatementsgaregpresentedgfairly,ginga
llgmaterialgrespects,gingaccordancegwithgthegapplicablegfinancialgreportinggframework."gThisgpass
agegrequires:
A) agstatementgofgfactgbygthegauditor.
B) angopiniongbygthegauditor.
C) angimpliedgmeasuregofgfairness.
D) angobjectivegmeasuregofgcompliance.
20) Becausegofgthegriskgofgmaterialgmisstatement,gangauditgofgfinancialgstatementsgingaccordanc
egwithggenerallygacceptedgauditinggstandardsgshouldgbegplannedgandgperformedgwithgangattitudeg
of:
A) objectivegcynicism.
B) independentgdifferentialism.
C) professionalgskepticism.
D) impartialgconservatism.
21) Thegaccuracygofginformationgincludedgingfootnotesgaccompanyinggthegauditedgfinancial
gstatementsgissuedgbygagcompanygwhosegsharesgaregtradedgongagstockgexchangegisgthegprima
rygresponsibilitygof:
A) thegstockgexchangegofficials.
B) thegindependentgauditor.
C) thegcompany'sgmanagement.
D) thegsecuritiesgandgexchangegcommission.
22) Thegprimarygresponsibilitygforgthegadequacygofgdisclosuresgingthegfinancialgstatementsgofg
agpubliclygheldgcompanygrestsgwithgthe:
A) partnergassignedgtogthegauditgengagement.
B) managementgofgthegcompany.
C) auditorgingchargegofgthegfieldwork.
D) securitiesgandgexchangegcommission.
23) Theglargestgpublicgaccountinggfirmsgtypicallygaregstructuredgas:
A) subchaptergSgcorporations.
B) professionalgcorporations.
C) limitedgliabilitygpartnerships.
D) limitedgliabilitygcorporations.
24) Typically,gangexternalgauditorgfirstggetsgsupervisorygexperiencegatgwhatglevelgofgauthority?
A) Associate.
B) Senior.
C) Manager.
D) Partner.
3
Copyrightg2019g©gMcGraw-
HillgEducation.gAllgrightsgreserved.gNogreproductiongorgdistributiongwithoutgthegpriorgwrittengconsentgofgMcGr
aw-HillgEducation.
mynursytest.store
ier
Auditingg&gAssurancegServices:gAgSystematicgApproach,g11eg(Messier)gChap
terg2g ThegFinancialgStatementgAuditinggEnvironment
1) AgseriesgofgbusinessgandgrelatedgauditinggfailuresgledgtogthegpassagegofgthegSarbanes-
OxleygActg(2002).
2) Thegprimarygauditgcontextgwithgwhichgangauditorgisgconcernedgisgthegauditee'sgindustryg
orgbusiness.
3) Thegauditgcommitteeggenerallygincludesgseniorgexecutivesgofgthegorganization.
4) Agfinancialgstatementgauditgisggenerallygorganizedgbasedgongthegfivegbasicgbusinessgprocesse
sgorgcycles.
5) Onegofgthegfivegbasicgbusinessgprocessesgisgthegwarehousinggcycle.
6) ThegASB'sgauditinggstandardsgcontaingagprefacegthatgincludesgPrinciplesgUnderlyinggangAud
itgConductedgingAccordancegwithgGAAS.
7) PCAOBgauditinggstandardsgmustgbegfollowedgongallgfinancialgstatementgauditsgperformedgi
ngthegU.S.
8) AgfinancialgstatementgauditgmustgbegconductedgbasedgongGAAP.
9) Generally,gthegfinancialgstatementsgofgU.S.gcompaniesgmustgbegpreparedgbasedgongGAAP.
10) PCAOBgauditinggstandardsgmustgbegfollowedgongallgauditsgofgpublicgcompanies'gfinanci
algstatements.
11) ThegAuditgCommitteegconsistsgof:
A) membersgofgmanagement.
B) agsubcommitteegofgthegAICPAgwhogestablishgthegSAS.
C) membersgofgthegBoardgofgDirectors.
D) appointedggovernmentgoverseers.
12) Whatgorganizationgisgresponsiblegforgsettinggauditinggstandardsgforgauditsgofgpublicly-
tradedgcompaniesgingthegU.S.?
A) AICPA.
B) FASB.
C) GASB.
D) PCAOB.
1
Copyrightg2019g©gMcGraw-
HillgEducation.gAllgrightsgreserved.gNogreproductiongorgdistributiongwithoutgthegpriorgwrittengconsentgofgMcGr
aw-HillgEducation.
mynursytest.store
,DOWNLOADgTHEgTestgBankgforgAuditinggandgAssurancegServicesg11thgEditiongMess
ier
13) ThegPublicgCompanygAccountinggOversightgBoard'sgrolegisgto:
A) conductgthegfinalgreviewgofgauditors'gworkgbeforegthegauditor'sgopiniongisgissued.
B) overseegthegauditorsgofgpublicgcompaniesgingordergtogprotectgtheginterestsgofginvestors.
C) conductgauditsgofggovernmentalgentities.
D) sanctiongauditorsgwhogfailgtogfollowgGAAS.
14) ThegauthoritativegbodygdesignedgtogpromulgategstandardsgconcerninggagCPA'sgassociationg
withgauditedgfinancialgstatementsgofgangentitygthatgisgrequiredgtogfilegfinancialgstatementsgwithgt
hegSECgisgthe:
A) financialgaccountinggstandardsgboard.
B) generalgaccountinggoffice.
C) publicgcompanygaccountinggoversightgboard.
D) auditinggstandardsgboard.
15) Thegauditorgmustgbegindependentgofgthegauditeegunless:
A) theglackgofgindependencegdoesgnotginfluenceghisgorghergprofessionalgjudgment.
B) bothgpartiesgagreegthatgthegindependencegissuegisgnotgagproblem.
C) theglackgofgindependencegisginsignificant.
D) nonegofgthegabove—thegauditorgcannotglackgindependence.
16) WhichgprinciplegofgthegPrinciplesgUnderlyinggangAuditgConductedgingAccordancegwithgGAAS
describesgwheregauditorsgaregrequiredgtogplangthegworkgandgproperlygsuperviseganygassistants?
A) PurposegofgangAuditgandgPremisegupongwhichgangAuditgisgConducted.
B) Performance.
C) Reporting.
D) Responsibilities.
17) Whichgofgthegfollowinggbestgdescribesgtheggeneralgcharactergofgthegthreegprinciplesgthatgar
eglistedgingthegPerformancegsectiongofgthegPrinciplesgUnderlyinggangAuditgConductedgingAcc
ordancegwithgGAAS?
A) Thegpurposegandgvaluegofgagfinancialgstatementgauditgandglaysgoutgthegresponsibilitiesg
ofgmanagementgforgangeffectivegauditgtogbegpossible.
B) Thegfundamentalgresponsibilitiesgandgcharacteristicsgofgangauditor.
C) Auditors'gresponsibilitiesgingperforminggangeffectivegaudit.
D) Auditorsgprovidegagwrittengreportgthatgexpressesgtheirgopiniongaboutgthegfinancialgstatements.
18) ThegResponsibilitiesgsectiongofgthegPrinciplesgUnderlyinggangAuditgConductedgingAccordanc
egwithgGAASgstatesgthatgauditorsgaregresponsiblegforghavinggappropriategcompetencegand:
A) independencegwithgrespectgtogthegfinancialgstatementsgandgsupplementarygdisclosures.
B) exercisinggprofessionalgcaregasgjudgedgbygpeergreviewers.
C) capabilitiesgtogperformgthegaudit.
D) objectivitygasgangauditorgasgverifiedgbygpropergsupervision.
2
Copyrightg2019g©gMcGraw-
HillgEducation.gAllgrightsgreserved.gNogreproductiongorgdistributiongwithoutgthegpriorgwrittengconsentgofgMcGr
aw-HillgEducation.
mynursytest.store
, DOWNLOADgTHEgTestgBankgforgAuditinggandgAssurancegServicesg11thgEditiongMess
ier
19) ThegReportinggsectiongofgthegPrinciplesgUnderlyinggangAuditgConductedgingAccordancegwith
gGAASgrequiresgthatgthegreport,g"statesgwhethergthegfinancialgstatementsgaregpresentedgfairly,ginga
llgmaterialgrespects,gingaccordancegwithgthegapplicablegfinancialgreportinggframework."gThisgpass
agegrequires:
A) agstatementgofgfactgbygthegauditor.
B) angopiniongbygthegauditor.
C) angimpliedgmeasuregofgfairness.
D) angobjectivegmeasuregofgcompliance.
20) Becausegofgthegriskgofgmaterialgmisstatement,gangauditgofgfinancialgstatementsgingaccordanc
egwithggenerallygacceptedgauditinggstandardsgshouldgbegplannedgandgperformedgwithgangattitudeg
of:
A) objectivegcynicism.
B) independentgdifferentialism.
C) professionalgskepticism.
D) impartialgconservatism.
21) Thegaccuracygofginformationgincludedgingfootnotesgaccompanyinggthegauditedgfinancial
gstatementsgissuedgbygagcompanygwhosegsharesgaregtradedgongagstockgexchangegisgthegprima
rygresponsibilitygof:
A) thegstockgexchangegofficials.
B) thegindependentgauditor.
C) thegcompany'sgmanagement.
D) thegsecuritiesgandgexchangegcommission.
22) Thegprimarygresponsibilitygforgthegadequacygofgdisclosuresgingthegfinancialgstatementsgofg
agpubliclygheldgcompanygrestsgwithgthe:
A) partnergassignedgtogthegauditgengagement.
B) managementgofgthegcompany.
C) auditorgingchargegofgthegfieldwork.
D) securitiesgandgexchangegcommission.
23) Theglargestgpublicgaccountinggfirmsgtypicallygaregstructuredgas:
A) subchaptergSgcorporations.
B) professionalgcorporations.
C) limitedgliabilitygpartnerships.
D) limitedgliabilitygcorporations.
24) Typically,gangexternalgauditorgfirstggetsgsupervisorygexperiencegatgwhatglevelgofgauthority?
A) Associate.
B) Senior.
C) Manager.
D) Partner.
3
Copyrightg2019g©gMcGraw-
HillgEducation.gAllgrightsgreserved.gNogreproductiongorgdistributiongwithoutgthegpriorgwrittengconsentgofgMcGr
aw-HillgEducation.
mynursytest.store
