Topic Type of Auditor Class of Work

1.2.7 CPA Audit of financial statements

3.8 Internal auditor Operational audit
4 GAO Operational audit
5 Bank examiner Compliance audit
6 CPA Consulting services
9 IRS Compliance audit
10 CPA Compliance audit
11 GAO Compliance audit
12 CPA Accounting services

1. Which the following statement is false?
A) The criteria by which an auditor evaluates the information under audit may vary with the information being
audited.
B) The Sarbanes-Oxley Act establishes standards related to the audits of privately held companies.
C) The Sarbanes-Oxley Act is widely viewed as having ushered in sweeping changes to auditing and financial
reporting.
D) An auditor must be competent and have an independent mental attitude.


2. In "auditing" financial accounting data, the primary concern is with:
A) determining whether recorded information properly reflects the economic events that occurred during the
accounting period.
B) determining if fraud has occurred.
C) determining if taxable income has been calculated correctly.
D) analyzing the financial information to be sure that it complies with government requirements.


3. The trait that distinguishes auditors from accountants is the:
A) auditor's ability to interpret accounting principles generally accepted in the United States.
B) auditor's education beyond the Bachelor's degree.
C) auditor's ability to interpret FASB Statements.
D) auditor's accumulation and interpretation of evidence related to a company's financial statements.
P.S : An accountant must have an understanding of the principles and rules that provide the basis for preparing the
accounting information.


4. A correct relationship among the auditor, the client, and the external users is:
A) management of a public company hires the independent auditor.
B) the audit committee of a private company hires the independent auditor.
C) the client provides capital to the external users.
D) the external users can rely upon the auditor's report to reduce information risk.


5. Which of the following best describes the primary reason an independent auditor reports on financial
statements?
A) To give stockholders some assurance that any fraudulent activities will be detected.
B) To identify a poorly designed internal control structure that may produce unreliable financial statements.
C) To provide expertise to clients, which may not be totally knowledgeable of prevailing GAAP.
D) To add credibility, where appropriate, since the client may not be perceived as objective with respect to its own
financial statements.


6. Financial statement users' demand for assurance is similar to that of a potential home buyer who hires a
home inspector in that
A) The buyer [or user] pays directly for this assurance in both situations.
B) There are often information asymmetry and conflicts of interest.
C) The cost of obtaining information is not relevant.
D) Independence is not relevant in either situation.
P.S: Information asymmetry refers to an imbalance of information between the auditor and the management of the
company.

7. Which of the following best describes the relationship between attestation services and audit services?
A) Attestation is a subset of auditing that improves the quality of information for decision makers.
B) Auditing is a subset of attestation and focuses on providing clients with advisory services and decision support.
C) Auditing is a subset of attestation that involves the issuance of an opinion regarding the fairness of financial
statements.
D) Attestation is a subset of auditing that provides more assurance than does an audit engagement.

8. Attestation services on information technology include WebTrust services and SysTrust services. Which of the
following statements most accurately describes SysTrust services?
A) SysTrust services provide assurance on business processes, transaction integrity and information processes.
B) SysTrust services provide assurance on system reliability in critical areas such as security and data integrity.
C) SysTrust services provide assurance on internal control over financial reporting.
D) SysTrust services provide assurance as to whether accounting personnel are following procedures prescribed by the
company controller.

9. Which of the following is considered an example of a compliance audit?
A) The examination a company's claims that its product is superior to that of a competitor on specific dimensions.
B) The examination of a school district networked computer system.
C) The examination of a company's adherence to government-mandated safety provisions.
D) The examination of a company's financial statements.

10. The three requirements for becoming a CPA include all but which of the following?
A) Uniform CPA examination requirement.
B) Experience requirement.
C) Character requirements.
D) Educational requirements.





Answer: BADDD BCBCC