Gleim’s CPA Test Prep Auditing Complete Questions And Correct Detailed Answers
(Verified Answers) |Already Graded A+
A review of a nonpublic company's financial statements is considered: - (answer)An assurance
engagement AND an attest engagement
**
professional standards consider review to be both assurance and attest engagements
Which of the following types of services is most directly designed to improve the quality of information,
or its context, for decision makers? - (answer)Assurance services
***
Special Committee on Assurance Services (the Elliott Committee), defined assurance services as
independent professional services that improve quality of information, or its context, for decision
makers
An accountant's objective of a review of the financial statements of a nonissuer (nonpublic company) is
to provide what type of assurance? - (answer)Limited assurance.
**
reviews result in limited (negative) assurance
When making a review of interim financial information the auditor's work consists primarily of -
(answer)Making inquiries and performing analytical procedures concerning significant accounting
matters.
***
a review of interim financial information consists primarily of inquiries and analytical procedures
concerning significant accounting matters relating to the financial data being reported
Which of the following activities would most likely be considered an attestation engagement? -
(answer)Issuing a report about a firm's compliance with laws and regulations.
***
the attest standards provide for issuance of a report about a firm's compliance with laws and regulations
,Gleim’s CPA Test Prep Auditing Complete Questions And Correct Detailed Answers
(Verified Answers) |Already Graded A+
Which of the following underlies the application of generally accepted auditing standards, particularly
the standards of fieldwork and reporting? - (answer)The elements of materiality and audit risk
***
the elements of materiality and audit risk underlie the application of all the standards, particularly the
standards of fieldwork and reporting
International Standards on Auditing are issued by - (answer)The International Federation of Accountants
***
International Auditing Standards are issued by the International Auditing and Assurance Standards
Board of the International Federation of Accountants
Which of the following AICPA standards did the PCAOB not adopt as a part of its interim standards? -
(answer)Accounting and Review Services Standards
***
the PCAOB did not adopt the AICPA's Accounting and Review Services Standards because they only
apply to nonpublic companies ("non-issuers").
Which of the following is most accurate relating to the International Auditing and Assurance Standards
Board (IAASB) and the International Federation of Accountants (IFAC)? - (answer)IAASB is a Board within
IFAC.
****
IAASB is a Board within the broader organization, IFAC
The Public Company Accounting Oversight Board (PCAOB) has authority to establish which of the
following relating to public companies? - (answer)Both Attestation standards AND Independence
standards
***
, Gleim’s CPA Test Prep Auditing Complete Questions And Correct Detailed Answers
(Verified Answers) |Already Graded A+
the PCAOB may establish attestation standards, independence standards, auditing standards, and
quality control standards
An auditor's independence is considered impaired if the auditor has - (answer)A joint, closely held
business investment with the client that is material to the auditor's net worth
Interpretation 101-1 prohibits joint closely held investments that are material to the auditor
Under the ethical standards of the profession, which of the following investments by a CPA in a
corporate client is an indirect financial interest? - (answer)An investment held through a regulated
mutual fund
***
an investment in a regulated mutual fund is an indirect investment is the stock of the companies in the
fund as defined under Rule 101 on independence
In which of the following situations would a CPA firm be independent with respect to an audit client? -
(answer)A professional employee assigned to the engagement has a spouse that is employed as a
salesperson by the client
***
a covered member's spouse may be employed by an attest client providing that he or she is not
employed in a key position
According to the AICPA Code of Professional Conduct, in which of the following circumstances may a
CPA serve on a company's board of directors? - (answer)The CPA does not audit the company and has
no other business connection with the company -
if the CPA does not provide audit or attestation services for the client, there is no requirement for
independence
What is the responsibility of a successor auditor with respect to communicating with the predecessor
auditor in connection with a prospective new audit client? - (answer)The successor auditor should
obtain permission from the prospective client to contact the predecessor auditor
(Verified Answers) |Already Graded A+
A review of a nonpublic company's financial statements is considered: - (answer)An assurance
engagement AND an attest engagement
**
professional standards consider review to be both assurance and attest engagements
Which of the following types of services is most directly designed to improve the quality of information,
or its context, for decision makers? - (answer)Assurance services
***
Special Committee on Assurance Services (the Elliott Committee), defined assurance services as
independent professional services that improve quality of information, or its context, for decision
makers
An accountant's objective of a review of the financial statements of a nonissuer (nonpublic company) is
to provide what type of assurance? - (answer)Limited assurance.
**
reviews result in limited (negative) assurance
When making a review of interim financial information the auditor's work consists primarily of -
(answer)Making inquiries and performing analytical procedures concerning significant accounting
matters.
***
a review of interim financial information consists primarily of inquiries and analytical procedures
concerning significant accounting matters relating to the financial data being reported
Which of the following activities would most likely be considered an attestation engagement? -
(answer)Issuing a report about a firm's compliance with laws and regulations.
***
the attest standards provide for issuance of a report about a firm's compliance with laws and regulations
,Gleim’s CPA Test Prep Auditing Complete Questions And Correct Detailed Answers
(Verified Answers) |Already Graded A+
Which of the following underlies the application of generally accepted auditing standards, particularly
the standards of fieldwork and reporting? - (answer)The elements of materiality and audit risk
***
the elements of materiality and audit risk underlie the application of all the standards, particularly the
standards of fieldwork and reporting
International Standards on Auditing are issued by - (answer)The International Federation of Accountants
***
International Auditing Standards are issued by the International Auditing and Assurance Standards
Board of the International Federation of Accountants
Which of the following AICPA standards did the PCAOB not adopt as a part of its interim standards? -
(answer)Accounting and Review Services Standards
***
the PCAOB did not adopt the AICPA's Accounting and Review Services Standards because they only
apply to nonpublic companies ("non-issuers").
Which of the following is most accurate relating to the International Auditing and Assurance Standards
Board (IAASB) and the International Federation of Accountants (IFAC)? - (answer)IAASB is a Board within
IFAC.
****
IAASB is a Board within the broader organization, IFAC
The Public Company Accounting Oversight Board (PCAOB) has authority to establish which of the
following relating to public companies? - (answer)Both Attestation standards AND Independence
standards
***
, Gleim’s CPA Test Prep Auditing Complete Questions And Correct Detailed Answers
(Verified Answers) |Already Graded A+
the PCAOB may establish attestation standards, independence standards, auditing standards, and
quality control standards
An auditor's independence is considered impaired if the auditor has - (answer)A joint, closely held
business investment with the client that is material to the auditor's net worth
Interpretation 101-1 prohibits joint closely held investments that are material to the auditor
Under the ethical standards of the profession, which of the following investments by a CPA in a
corporate client is an indirect financial interest? - (answer)An investment held through a regulated
mutual fund
***
an investment in a regulated mutual fund is an indirect investment is the stock of the companies in the
fund as defined under Rule 101 on independence
In which of the following situations would a CPA firm be independent with respect to an audit client? -
(answer)A professional employee assigned to the engagement has a spouse that is employed as a
salesperson by the client
***
a covered member's spouse may be employed by an attest client providing that he or she is not
employed in a key position
According to the AICPA Code of Professional Conduct, in which of the following circumstances may a
CPA serve on a company's board of directors? - (answer)The CPA does not audit the company and has
no other business connection with the company -
if the CPA does not provide audit or attestation services for the client, there is no requirement for
independence
What is the responsibility of a successor auditor with respect to communicating with the predecessor
auditor in connection with a prospective new audit client? - (answer)The successor auditor should
obtain permission from the prospective client to contact the predecessor auditor
