Question details

ACC 562 MIDTERM EXAM LATEST 2015
$ 45.00

 

Question 1

Answer
Independent professional services that are provided on financial or other information that improve the quality of decision making are known as
Answer
internal auditing.
financial auditing.
assurance services.
attestation services.

Question 2
The objective of an operational audit is to
Answer
evaluate whether laws have been broken by management.
evaluate fairness of presentation of financial statements.
evaluate compliances with company rules and regulations.
evaluate the effectiveness and efficiency with which resources are employed.
Question 3
The AICPA remains a valuable organization because of its continuing involvement in
Answer
the audit standard setting process.
regulation and enforcement of the audit profession.
education and administration of the CPA exam.
promulgation of accounting standards.

Question 4
The auditor of financial statements must make very difficult interpretations regarding authoritative literature. Additionally, the auditor must
Answer
consider whether the application of a generally accepted accounting principle best portrays the economic activity of the company.
force management to make certain decisions regarding their financial statements.
disregard independence in order to find the underlying truth of the evidence.
establish new criteria by which financial statements may be compared.

Question 5
CPAs are licensed by the
Answer
PCAOB.
AICPA.
state's board of accountancy.
state's society of CPAs.

Question 6
The criteria against which the auditor measures the fairness of financial statement presentation are known as
Answer
auditing standards.
generally accepted accounting principles.
generally accepted accounting standards.
governmental accounting principles.

Question 7
The audit committee of the board of directors of a company is responsible for
Answer
hiring the auditor.
preparing the financial statements.
the audit workpapers.
independence and obtaining evidence.
Question 8
What is the criteria used in an operational audit?
Answer
GAAP.
effectiveness and efficiency.
rules and regulations.
company policies.
Question 9
As it relates to an audit, materiality is
Answer
not taken into consideration.
related only to the sufficiency of procedures performed.
based upon audit fees.
determined based upon the importance to a user of the financial statements.

Question 10
Auditing is important in a free market society because
Answer
the public requires CPAs functioning as divisions of regulatory bodies.
auditors detect all errors and fraud made by company employees.
it provides reliable information based upon which to judge economic performance.
the auditor is an amiable insurance policy for investors.
Question 11
Section 304 of the Sarbanes-Oxley Act requires executives to forfeit any bonus or incentive-based pay or profits (including stock options) from the sale of stock received in the twelve months prior to an earnings restatement. This is often referred to as:
Answer
claw back provision
give back provision
restatement provision
fraud provision
Question 12
The AICPA is an organization that is
Answer
historically self-regulated.
regulated by the federal government.
regulated the state governments.
a new organization established by an act of congress in 2002.
Question 13
A proper system of corporate governance is one that demands
Answer
decision making by auditors in place of management.
accountability back through the system to the shareholders.
internal audit representation on the board of directors.
audit planning to obtain competent and sufficient audit evidence.

Question 14
The organization that will continue to set auditing standards for firms auditing private companies is the
Answer
FASB
GAO
SEC
AICPA
Question 15
Which of the following are the CEO and CFO of a public company prohibited from performing under the Sarbanes-Oxley Act of 2002?
Answer
Certification of financial statements
Disclosure of off-balance sheet transactions
Reporting on internal control over financial reporting
Selecting the external auditors

Question 16
The responsibility for operating an enterprise is delegated to the:
Answer
auditor.
audit committee.
management.
board of directors.
Question 17
According to the Sarbanes-Oxley Act of 2002, how often must audit managers and partners rotate off an engagement of a public company?
Answer
Each busy season
When independence is in question
Every five years
Managers and partners are not required to rotate off of public client engagements
Question 18
The audit client of the CPA firm is:
Answer
management.
the SEC.
the audit committee.
the stockholders.
Question 19
The Sarbanes-Oxley Act of 2002 requires which of the following?
Answer
Only the largest four accounting firms may audit public companies.
Smaller public companies that cannot afford to become compliant with the act must delist and become pink sheet companies.
All publicly held companies will provide a report on internal control over financial reporting.
Chief financial officers of public companies must be CPAs.
Question 20
Which one of the following will provide auditing standards of public companies?
Answer
GAO
AICPA
GAAP
PCAOB
Question 21
Information about a client that cannot be subpoenaed by a court of law is referred to as what type of information?
Answer
confidential information.
privileged communication.
contingent information.
audit communication
Question 22
An auditor that has an attitude that includes a questioning mind and a critical assessment of audit evidence is considered which of the following?
Answer
Professionally Skeptical.
Professionally Independent.
Professionally Competent.
Professionally Efficient.
Question 23
A CPA firm is considered independent when it performs which of the following services for a publicly traded audit client?
Answer
Serving as a member of the client’s board of directors.
Determining which accounting policies will be adopted by the client as approved by the board of directors.
Accounting information system design and implementation as approved by the board of directors.
Tax return preparation as approved by the board of directors.
Question 24
The AICPA Principles of Professional Conduct include which of the following?
Answer
public interest, objectivity and independence.
due professional care and supervision.
scope and nature of services and adequate training.
integrity and confidentiality
Question 25
Which of the following is included in the AICPA Code of Professional Conduct?
Answer
Principles, Rules of Conduct and Ethics Rulings.
Rules of Conduct, Interpretations and Principles.
Principles, Rules of Conduct and Ethics Rulings.
Principles, Rules of Conduct, Interpretations and Ethics Rulings.
Question 26
In determining the types of activities, engagements and interactions an auditor should have with a client, the CPA and the audit firm must do which of the following?
Answer
only assess the relationships of clients that pay audit fees that are material to their firm.
assess all of their relationships with every client to ensure that independence is intact.
focus on client satisfaction above all other considerations.
realize that ethics are only guidelines and a matter of personal judgment.
Question 27
Mark Pulley is an auditor at Pulley and Hurst, LLC. If Pulley's five-year-old daughter owns shares of stock in McBurgers Corporation, then Pulley is considered to have what type of interest in McBurgers Corporation?
Answer
immaterial indirect interest in McBurgers Corporation.
material indirect interest in the McBurgers Corporation.
a loophole for claiming independence from McBurgers Corporation.
direct interest in McBurgers Corporation.
Question 28
Independence is not required for which of the following types of services?
Answer
audits.
reviews.
consulting.
attestation.
Question 29
Which one of the following is an example of a conflict of interest for a CPA?
Answer
performing tax services and a compilation engagement for a client
serving as legal counsel and an auditor for a client
providing an audit on internal financial controls and financial statements for a client
being employed as a chief financial officer while serving as a member of the board of directors for the same company
Question 30
William Tyler, CPA, may not accept a commission for recommending a product or service to which type of client?
Answer
a tax client.
an attestation client.
a financial-planning client.
a management-services client.
 

 

 


VERSION 2
Question 1 
Users can reasonably expect audited financial statements to be
Answer 
complete and contain all important financial disclosures, be free from material misstatements and be presented fairly according to GAAS.
complete and contain all important financial disclosures, be free from material misstatements and be presented fairly according to GAAP.
complete, be accurate and be presented fairly according to GAAP.
complete and contain all important financial disclosures, be free from all misstatements and be presented fairly according to the substance of GAAS
Question 2 
What is the criteria used in an operational audit?
Answer 
GAAP.
effectiveness and efficiency.
rules and regulations.
company policies
Question 3 
The primary governing board that performs quality reviews on registered CPA firms that audit public companies is the
Answer 
PCAOB
GAO
AICPA
FASB
Question 4 
Congress authorized which of the following organizations to establish generally accepted accounting principles for public companies?
Answer 
SEC
APB
AICPA
FASB
Question 5 
As it relates to an audit, materiality is
Answer 
not taken into consideration.
related only to the sufficiency of procedures performed.
based upon audit fees.
determined based upon the importance to a user of the financial statements
Question 6 
Auditing is important in a free market society because
Answer 
the public requires CPAs functioning as divisions of regulatory bodies.
auditors detect all errors and fraud made by company employees.
it provides reliable information based upon which to judge economic performance.
the auditor is an amiable insurance policy for investors.
Question 7 
An expectation of the public is that the auditor will recognize that the primary users of audit assurance are
Answer 
the clients.
the Public Company Accounting Oversight Board.
members of management.
third-party users.
Question 8 
An audit which has as its purpose the evaluation of the economy and efficiency with which resources are employed is known as a(n)
Answer 
financial audit.
compliance audit.
operational audit.
governmental audit
Question 9 
Independent professional services that are provided on financial or other information that improve the quality of decision making are known as
Answer 
internal auditing.
financial auditing.
assurance services.
attestation services.
Question 10 
The objective of an operational audit is to
Answer 
evaluate whether laws have been broken by management.
evaluate fairness of presentation of financial statements.
evaluate compliances with company rules and regulations.
evaluate the effectiveness and efficiency with which resources are employed
Question 11 
An audit committee must be comprised of outside directors and at least one outside financial expert. Which of the following is considered an outside director?
Answer 
A director who is not a member of management and has no other relationship to the organization.
A consultant to the organization who works as an honorary member of the board.
A director who is also a member of management and has no other relationship to the company.
A director who is a CPA and CIO of an affiliated organization
Question 12 
Which of the following are the CEO and CFO of a public company prohibited from performing under the Sarbanes-Oxley Act of 2002?
Answer 
Certification of financial statements
Disclosure of off-balance sheet transactions
Reporting on internal control over financial reporting
Selecting the external auditors
Question 13 
The Sarbanes-Oxley Act of 2002 requires which of the following?
Answer 
Only the largest four accounting firms may audit public companies.
Smaller public companies that cannot afford to become compliant with the act must delist and become pink sheet companies.
All publicly held companies will provide a report on internal control over financial reporting.
Chief financial officers of public companies must be CPAs
Question 14 
Which one of the following will provide auditing standards of public companies?
Answer 
GAO
AICPA
GAAP
PCAOB
Question 15 
Audit committees are required to have what person in its composition?
Answer 
A CPA
A public regulator
A financial expert
An attorney-at-law
Question 16 

The audit client of the CPA firm is:
Answer 
management.
the SEC.
the audit committee.
the stockholders
Question 17 
Section 304 of the Sarbanes-Oxley Act requires executives to forfeit any bonus or incentive-based pay or profits (including stock options) from the sale of stock received in the twelve months prior to an earnings restatement. This is often referred to as:
Answer 
claw back provision
give back provision
restatement provision
fraud provision
Question 18 
The organization that will continue to set auditing standards for firms auditing private companies is the
Answer 
FASB
GAO
SEC
AICPA
Question 19 
The AICPA is an organization that is
Answer 
historically self-regulated.
regulated by the federal government.
regulated the state governments.
a new organization established by an act of congress in 2002.
Question 20 
A proper system of corporate governance is one that demands
Answer 
decision making by auditors in place of management.
accountability back through the system to the shareholders.
internal audit representation on the board of directors.
audit planning to obtain competent and sufficient audit evidence
Question 21 
Independence is not required for which of the following types of services?
Answer 
audits.
reviews.
consulting.
attestation
Question 22 
The AICPA Principles of Professional Conduct include which of the following?
Answer 
public interest, objectivity and independence.
due professional care and supervision.
scope and nature of services and adequate training.
integrity and confidentiality
Question 23 
Which of the following describes a situation in which moral duties or obligations conflict and one action is not necessarily the correct action?
Answer 
an ethical dilemma.
an ethical problem.
an ethical theory.
an ethical solution
Question 24 
Mark Pulley is an auditor at Pulley and Hurst, LLC. If Pulley's five-year-old daughter owns shares of stock in McBurgers Corporation, then Pulley is considered to have what type of interest in McBurgers Corporation?
Answer 
immaterial indirect interest in McBurgers Corporation.
material indirect interest in the McBurgers Corporation.
a loophole for claiming independence from McBurgers Corporation.
direct interest in McBurgers Corporation.
Question 25 
Which of the following describes a situation in which an individual is morally or ethically required to do something that conflicts with his or her immediate self-interest?
Answer 
an ethical dilemma.
an ethical problem.
an ethical theory.
an ethical solution.
Question 26 
A CPA may only practice public accounting in which of the following forms?
Answer 
a partnership.
a professional corporation.
a sole proprietorship.
an organization permitted by state law or regulation
Question 27 
Which of the following represents a situation in which an auditor is independent of the client?
Answer 
The auditor is paid by the client organization rather than the SEC.
The auditor takes a personal loan from the president of the company.
The auditor’s dependent son holds 25 shares of the client’s common stock.
The auditor has not received payment for the previous audit services
Question 28 
William Tyler, CPA, may not accept a commission for recommending a product or service to which type of client?
Answer 
a tax client.
an attestation client.
a financial-planning client.
a management-services client
Question 29 
An auditor that has an attitude that includes a questioning mind and a critical assessment of audit evidence is considered which of the following?
Answer 
Professionally Skeptical.
Professionally Independent.
Professionally Competent.
Professionally Efficient.
Question 30 
Which of the following is included in the AICPA Code of Professional Conduct?
Answer 
Principles, Rules of Conduct and Ethics Rulings.
Rules of Conduct, Interpretations and Principles.
Principles, Rules of Conduct and Ethics Rulings.
Principles, Rules of Conduct, Interpretations and Ethics Rulings
 

VERSION 3
Question 1 
Congress authorized which of the following organizations to establish generally accepted accounting principles for public companies?
Answer 
SEC
APB
AICPA
FASB
Question 2 
The audit agency for the U. S. Congress is the
Answer 
SEC.
GAO.
IIA.
AICPA.
Question 3 
The primary governing board that performs quality reviews on registered CPA firms that audit public companies is the
Answer 
PCAOB
GAO
AICPA
FASB
Question 4 
The auditor of financial statements must make very difficult interpretations regarding authoritative literature. Additionally, the auditor must
Answer 
consider whether the application of a generally accepted accounting principle best portrays the economic activity of the company.
force management to make certain decisions regarding their financial statements.
disregard independence in order to find the underlying truth of the evidence.
establish new criteria by which financial statements may be compared.
Question 5 
As it relates to an audit, materiality is
Answer 
not taken into consideration.
related only to the sufficiency of procedures performed.
based upon audit fees.
determined based upon the importance to a user of the financial statements
Question 6 
Which of the following services is the broadest and most inclusive?
Answer 
Audit
Attestation
Assurance
Compliance
Question 7 
CPAs are licensed by the
Answer 
PCAOB.
AICPA.
state's board of accountancy.
state's society of CPAs.
Question 8 
CPA firms performing public financial statement audits must
Answer 
register with the American Institute of Certified Public Accountants.
register with the Institute of Auditors.
register with the U.S. General Accounting Office.
register with the Public Company Accounting Oversight Board
Question 9 
The organization that issued the Internal Control, Integrated Framework which serves as the primary criterion for evaluating the quality of a company’s internal control system is
Answer 
PCAOB
COSO
AICPA
GAO
Question 10 
Management of a company is responsible for
Answer 
hiring the auditor.
preparing the financial statements.
the audit workpapers.
independence and obtaining evidence
Question 11 
The Sarbanes-Oxley Act of 2002 requires which of the following?
Answer 
Only the largest four accounting firms may audit public companies.
Smaller public companies that cannot afford to become compliant with the act must delist and become pink sheet companies.
All publicly held companies will provide a report on internal control over financial reporting.
Chief financial officers of public companies must be CPAs
Question 12 
Which of the following are the CEO and CFO of a public company prohibited from performing under the Sarbanes-Oxley Act of 2002?
Answer 
Certification of financial statements
Disclosure of off-balance sheet transactions
Reporting on internal control over financial reporting
Selecting the external auditors
Question 13 
The AICPA is an organization that is
Answer 
historically self-regulated.
regulated by the federal government.
regulated the state governments.
a new organization established by an act of congress in 2002
Question 14 
The audit client of the CPA firm is:
Answer 
management.
the SEC.
the audit committee.
the stockholders.
Question 15 
Which one of the following will provide auditing standards of public companies?
Answer 
GAO
AICPA
GAAP
PCAOB
Question 16 
The organization that will continue to set auditing standards for firms auditing private companies is the
Answer 
FASB
GAO
SEC
AICPA
Question 17 
According to the Sarbanes-Oxley Act of 2002, how often must audit managers and partners rotate off an engagement of a public company?
Answer 
Each busy season
When independence is in question
Every five years
Managers and partners are not required to rotate off of public client engagements
Question 18 
Which group is responsible for ensuring that the organization is run according to the organization’s charter and that there is proper accountability?
Answer 
regulatory agencies such as the SEC
external auditors
board of directors
internal auditors
Question 19 
Section 304 of the Sarbanes-Oxley Act requires executives to forfeit any bonus or incentive-based pay or profits (including stock options) from the sale of stock received in the twelve months prior to an earnings restatement. This is often referred to as:
Answer 
claw back provision
give back provision
restatement provision
fraud provision
Question 20 
A proper system of corporate governance is one that demands
Answer 
decision making by auditors in place of management.
accountability back through the system to the shareholders.
internal audit representation on the board of directors.
audit planning to obtain competent and sufficient audit evidence
Question 21 
Information about a client that cannot be subpoenaed by a court of law is referred to as what type of information?
Answer 
confidential information.
privileged communication.
contingent information.
audit communication
Question 22 
Which of the following describes a situation in which moral duties or obligations conflict and one action is not necessarily the correct action?
Answer 
an ethical dilemma.
an ethical problem.
an ethical theory.
an ethical solution
Question 23 
In determining the types of activities, engagements and interactions an auditor should have with a client, the CPA and the audit firm must do which of the following?
Answer 
only assess the relationships of clients that pay audit fees that are material to their firm.
assess all of their relationships with every client to ensure that independence is intact.
focus on client satisfaction above all other considerations.
realize that ethics are only guidelines and a matter of personal judgment.
Question 24 
Mark Pulley is an auditor at Pulley and Hurst, LLC. If Pulley's five-year-old daughter owns shares of stock in McBurgers Corporation, then Pulley is considered to have what type of interest in McBurgers Corporation?
Answer 
immaterial indirect interest in McBurgers Corporation.
material indirect interest in the McBurgers Corporation.
a loophole for claiming independence from McBurgers Corporation.
direct interest in McBurgers Corporation.
Question 25 
Which of the following represents a situation in which an auditor is independent of the client?
Answer 
The auditor is paid by the client organization rather than the SEC.
The auditor takes a personal loan from the president of the company.
The auditor’s dependent son holds 25 shares of the client’s common stock.
The auditor has not received payment for the previous audit services.
Question 26 
Independence is not required for which of the following types of services?
Answer 
audits.
reviews.
consulting.
attestation.
Question 27 
Which of the following describes a situation in which an individual is morally or ethically required to do something that conflicts with his or her immediate self-interest?
Answer 
an ethical dilemma.
an ethical problem.
an ethical theory.
an ethical solution.
Question 28 
The AICPA Principles of Professional Conduct include which of the following?
Answer 
public interest, objectivity and independence.
due professional care and supervision.
scope and nature of services and adequate training.
integrity and confidentiality
Question 29 
An auditor that has an attitude that includes a questioning mind and a critical assessment of audit evidence is considered which of the following?
Answer 
Professionally Skeptical.
Professionally Independent.
Professionally Competent.
Professionally Efficient.
Question 30 
A CPA firm is considered independent when it performs which of the following services for a publicly traded audit client?
Answer 
Serving as a member of the client’s board of directors.
Determining which accounting policies will be adopted by the client as approved by the board of directors.
Accounting information system design and implementation as approved by the board of directors.
Tax return preparation as approved by the board of directors

 

 

Available solutions
  • ACC 562 MIDTERM EXAM LATEST 2015
    $45.00

    Question 1 Answer Independent professional services that are provided on financial or other information that improve the quality of decision making are known as Answer internal auditing. financial auditing. assurance services. attestation services. Question 2 The objective of an operational audit is to Answer evaluate whether laws have been broken by management. evaluate fairness of presentation of financial statements. evaluate compliances with company rules and regulations. evaluate the effectiveness and efficiency with which resources are employed. Question 3 The AICPA remains a valuable organization because of its continuing involvement in Answer the audit standard setting process. regulation and enforcement of the audit profession. education and administration of the CPA exam. promulgation of accounting standards. Question 4 The auditor of financial statements must make very difficult interpretations regarding authoritative literature. Additionally, the auditor must Answer consider whether the application of a generally accepted accounting principle best portrays the economic activity of the company. force management to make certain decisions regarding their financial statements. disregard independence i

    Submitted on: 16 Feb, 2016 01:04:22 This tutorial has not been purchased yet .