ACC 403 Quiz 2
This quiz consists of 30 multiple choice questions. The first 15 questions cover the material in Chapter 3. The second 15 questions cover the material in Chapter 4.
The standard unqualified audit report for public entities includes the following three paragraphs:
When a qualified or adverse opinion is issued, the qualifying paragraph is inserted:
The audit report date on a standard unqualified report indicates:
After the auditor determines whether any conditions exist which require a departure from a standard unqualified report, the next step in the decision process for audit reports is to:
The first step to be followed when deciding the appropriate audit report in a given set of circumstances is to:
Items that materially affect the comparability of financial statements generally require disclosure in the footnotes. If the client refuses to properly disclose the item, the auditor will most likely issue:
Auditing standards require that the audit report must be titled and that the title must:
When dealing with materiality and scope limitation conditions:
Auditing standards for public companies are established by the:
When the auditor determines that the financial statements are fairly stated, but there is a nonindependent relationship between the auditor and the client, the auditor should issue:
The appropriate audit report date for a standard nonqualified audit report for a non-public entity should be the:
If most or all users' decisions that are based on the financial statements are likely to be significantly affected, the materiality level is:
The auditor's responsibility section of the standard unqualified audit report states that the audit is designed to:
A CPA may wish to emphasize specific matters regarding the financial statements even though an unqualified opinion will be issued. Normally, such explanatory information is:
An audit of historical financial statements most commonly includes the:
Independence is required of a CPA when performing
Of the four parts of the AICPA's Code of Professional Conduct, which part is enforceable?
A six-step approach is often used to resolve an ethical dilemma. The first step in this process is to:
Which of the following services are allowed by the SEC whenever a CPA also audits the company?
Interpretations of the rules regarding independence allow an auditor to serve as:
Freedom from ________ means the absence of relationships that might interfere with objectivity or integrity.
Which of the following is required for a firm to designate itself "Member of the American Institute of Certified Public Accountants" on its letterhead?
The AICPA's Code of Professional Conduct states that a CPA should maintain integrity and objectivity. The term "objectivity" in the Code refers to a CPA's ability to:
The Sarbanes-Oxley Act ________ a CPA firm from doing both bookkeeping and auditing services for the same public company client.
The members of a client's "audit committee" should be:
Several months after an unqualified audit report was issued, the auditor discovers the financial statements were materially misstated. The client's CEO agrees that there are misstatements, but refuses to correct them. She claims that "confidentiality" prevents the CPA from informing anyone. Which of the following statements is correct?
When a member observes the profession's technical and ethical standards and strives to continually improve her competence and quality of services, she is exercising:
The financial interests of a CPA's family members can affect the CPA's independence. Which of the following parties would not be included as a "direct financial interest" of the CPA?
In determining independence with respect to any audit engagement, the ultimate decision as to whether or not the auditor is independent must be made by the:
An auditor's independence is considered impaired if the auditor has: