Gleim Quiz 1 with verified solutions
The primary reason for an audit by an independent, external audit firm is to - correct answer
✔✔provide increased assurance to users as to the fairness of the financial statements
Independent CPAs perform audits on the financial statements of issuer. This type of auditing can
best be described as - correct answer ✔✔a discipline that attests to financial information
presented by management
Who establishes generally accepted auditing standards? - correct answer ✔✔Auditing
Standards Board and the Public Company Accounting Oversight Board
Users of an issuer's financial statements demand independent audits because - correct answer
✔✔management may not be objective in reporting
An Audit of the financial statements of Camden Corporation is being conducted by an external
auditor. The external auditor is expected to - correct answer ✔✔express an opinion as to the
fairness of Camden's financial statements
Notes that are included with financial statements are the responsibility of the - correct answer
✔✔Company's management
Brandnew Company is going public, and its stock will be listed on a stock exchange. Audited
financial statements are required to be filed with the Securities and Exchange Commission
(SEC). Who is expected to be the primary user of the audited financial statements? - correct
answer ✔✔Brandnew Company's investors
, The committee of Sponsoring Organizations (COSO) of the Treadway Commission issued a
document in 1992 that has been embraced by numerous organizations, including the AICPA and
the GAO. That document is titled - correct answer ✔✔Internal Control - Integrated Framework
CPAs within each state have formed state societies or associations of CPAs. Which of the
following statements about these associations is false? - correct answer ✔✔All CPAs in the state
must be members of the state association or society
According to AU-C 200, overall objectives of the independent auditor and the conduct of an
audit in accordance with generally accepted auditing standards, "presumptively mandatory
requirements" in the auditing standards use which word? - correct answer ✔✔Should
An auditor must obtain professional experience primarily to - correct answer ✔✔exercise
professional judgment
competence as an independent auditor includes all of the following except - correct answer
✔✔warranting the infallibility of the work performed
GAAS require the auditor to be independent. An auditor is independent. An auditor is
independent is she is - correct answer ✔✔independent in fact and in appearance
Beth Babett, CPA, is associated with a client's financial statements but is not independent with
respect to that client. If she is requested to perform an audit on the financial statements, she
should - correct answer ✔✔disclaim an opinion
audit committees have been identified as a major factor in promoting independence in both
internal and external auditors. Which of the following is the most important limitation in the
effectiveness of audit committees? - correct answer ✔✔Audit committees are composed of
independent directors. however, those directors may have close personal and professional
friendships with management
The primary reason for an audit by an independent, external audit firm is to - correct answer
✔✔provide increased assurance to users as to the fairness of the financial statements
Independent CPAs perform audits on the financial statements of issuer. This type of auditing can
best be described as - correct answer ✔✔a discipline that attests to financial information
presented by management
Who establishes generally accepted auditing standards? - correct answer ✔✔Auditing
Standards Board and the Public Company Accounting Oversight Board
Users of an issuer's financial statements demand independent audits because - correct answer
✔✔management may not be objective in reporting
An Audit of the financial statements of Camden Corporation is being conducted by an external
auditor. The external auditor is expected to - correct answer ✔✔express an opinion as to the
fairness of Camden's financial statements
Notes that are included with financial statements are the responsibility of the - correct answer
✔✔Company's management
Brandnew Company is going public, and its stock will be listed on a stock exchange. Audited
financial statements are required to be filed with the Securities and Exchange Commission
(SEC). Who is expected to be the primary user of the audited financial statements? - correct
answer ✔✔Brandnew Company's investors
, The committee of Sponsoring Organizations (COSO) of the Treadway Commission issued a
document in 1992 that has been embraced by numerous organizations, including the AICPA and
the GAO. That document is titled - correct answer ✔✔Internal Control - Integrated Framework
CPAs within each state have formed state societies or associations of CPAs. Which of the
following statements about these associations is false? - correct answer ✔✔All CPAs in the state
must be members of the state association or society
According to AU-C 200, overall objectives of the independent auditor and the conduct of an
audit in accordance with generally accepted auditing standards, "presumptively mandatory
requirements" in the auditing standards use which word? - correct answer ✔✔Should
An auditor must obtain professional experience primarily to - correct answer ✔✔exercise
professional judgment
competence as an independent auditor includes all of the following except - correct answer
✔✔warranting the infallibility of the work performed
GAAS require the auditor to be independent. An auditor is independent. An auditor is
independent is she is - correct answer ✔✔independent in fact and in appearance
Beth Babett, CPA, is associated with a client's financial statements but is not independent with
respect to that client. If she is requested to perform an audit on the financial statements, she
should - correct answer ✔✔disclaim an opinion
audit committees have been identified as a major factor in promoting independence in both
internal and external auditors. Which of the following is the most important limitation in the
effectiveness of audit committees? - correct answer ✔✔Audit committees are composed of
independent directors. however, those directors may have close personal and professional
friendships with management
