Test Bank for Principles of Auditing and Other Assurance Services 22nd Edition by Ray Whittington, Kurt Pany

Test Bank for Principles of Auditing and Other Assurance Servi
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ces 22nd Edition by Ray Whittington, Kurt Pany
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Versionl1 1

,Full Test Bank for Principles of Auditing and Other Assurance Services 22ndEdition b
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y Ray Whittington, Kurt Pany
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Answers are at the end of each chapterC
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hapter 1 l




Student name:_ l l




1) Accountantslarelregulatedlbylal varietyloflorganizations.l Matchlthelstatementslwithlthelmos
tl directlylrelatedlorganization:
● AccountinglandlReviewlServiceslCommittee.
● AmericanlInstituteloflCertifiedlPubliclAccountants.
● AuditinglStandardslBoard.
● FederallAccountinglStandardslAdvisorylBoard.
● FinanciallAccountinglStandardslBoard.
● GenerallAccountinglOffice.
● GovernmentlAccountinglStandardslBoard.
● PubliclCompanylAccountinglOversightlBoard.
● SecuritieslandlExchangelCommission.
● StatelBoardsloflAccountancy.
Organizationslmaylbelusedlonce,lmorelthanlonce,lorlnotlatl all.
Statements Organizations
A.lDevelopslaccountinglstandards
forlpubliclandlnonpubliclc
ompanies.
B.lDevelopslaccountinglstandardslf
orlthelU.S.lGovernment.
C.lImproveslstandardsloflfinanciallac
countinglforlstatelandllocal
governmentlentities.
D.lIssueslauditinglstandardslfor
publiclcompanies.
E.lIssueslCPAlcertificates.

F.lPrepareslthelCPAlexam.

Organizations:lAmericanlInstituteloflCertifiedlPubliclAccountants,lFederallAccountinglStandard
slAdvisorylBoard,lFinanciallAccountinglStandardslBoard,lGovernmentlAccountinglStandardslBoa
rd,lPubliclCompanylAccountinglOversightl Board,lStatelBoardsloflAccountancy.




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,2) ThelSarbanes-
OxleylActl ofl2002lmadelsignificantlreformsl forlpubliclcompanieslandltheirlauditors.
a. DescribeltheleventslthatlledlupltolthelpassageloflthelAct.
b. DescribelthelmajorlchangeslmadelbylthelAct.




3) Manylpeoplelconfuselthelresponsibilitiesloflthelindependentlauditorslandlthelclient'slma
nagementl withlrespectl tol auditedl financiallstatements.
a. Describelmanagement'slresponsibilitylregardinglauditedlfinanciallstatements.
b. Describelthel independentl auditors'lresponsibilitylregardinglauditedl financiallstatements.
c. Evaluatelthelfollowinglstatement:l"Iflthelauditorsldisagreelwithlmanagementlregardinglanlacc
ountinglprinciplelusedlinlthelfinanciallstatements,lthelauditorslshouldlexpressltheirl viewslinlthelnote
sltolthel financiallstatements."


4) Anlinvestorlislconsideringlinvestinglinlonelofltwolcompanies.lThelcompanieslhavelverylsimil
arlreportedlfinanciallpositionlandlresultslofloperations.l However,lonlyloneloflthelcompanieslhasl itslfin
anciallstatementslaudited.
a. Describelwhatl createsltheldemandl forlanlauditlinlthislsituation.lIncludelaldiscussionloflhowlaudit
edlfinanciallstatementslfacilitatelthislinvestmentltransaction,landltheleffectloflthelauditlonlbusinesslr
isklandl informationlrisk.
b. Identifylthelpotentiallconsequencesltolthelcompanyloflnotlhavingl itslfinanciallstatementslaudi
ted.

5) Alsummaryloflfindingslratherlthanlassurancel islmostl likelyltol belincludedl inla(n):

A) Agreed-uponlprocedureslreport.
B) Compilationlreport.
C) Auditlreport.
D) Reviewlreport.




Versionl1 3

, 6) ThelStatementslonlAuditinglStandardslhavelbeenlissuedl bylthe:

A) AuditinglStandardslBoard.
B) FinanciallAccountinglStandardslBoard.
C) SecuritieslandlExchangelCommission.
D) FederallBureauloflInvestigation.




7) Thelrisklthatlalcompany’slfinanciallstatementslwilllmateriallyldepartlfromlgenerallylacc
eptedlaccountinglprinciplesl islreferredltol as:

A) BusinesslRisk.
B) InformationlRisk.
C) DetectionlRisk.
D) DocumentlRisk.




8) Historically,lwhichloflthel followinglhaslthelAICPAlbeenlmostlconcernedlwithlpro
viding?

A) Auditinglstandards.
B) Professionallguidancel forlregulatingl financiallmarkets.
C) Internallauditinglstandards.
D) StafflsupportltolCongress.




9) Thelorganizationlchargedlwithlprotectingl investorslandlthelpubliclbylrequiringl fullldis
closureloflfinanciallinformationlbylcompanieslofferinglsecuritiesltolthelpublicl islthe:

A) AuditinglStandardslBoard.
B) FinanciallAccountinglStandardslBoard.
C) GovernmentlAccountinglStandardslBoards.
D) SecuritieslandlExchangelCommission.



Versionl1 4