Strayer ACC 403 Final Exam 1 Chp. 9-13 NEW

Check this A+ tutorial guideline at

For more classes visit

1. If an auditor believes the chance of financial failure is high and there is a corresponding increase in business risk for the auditor, acceptable audit risk would likely:

2. The preliminary judgment about materiality and the amount of audit evidence accumulated are ________ related.

3. Auditors generally allocate the preliminary judgment about materiality to the:

4. Auditors are ________ to document the known and likely misstatements in the financial statements under audit.

5. An auditor who audits a business cycle that has low inherent risk should:

6. When one material weakness is present at the end of the year, management of a public company must conclude that internal control over financial reporting is:

7. An audit procedure that would most likely be used by an auditor in performing tests of control procedures in which the segregation of functions and that leaves no "audit" trail is:

8. Which of the following is responsible for establishing a private company's internal control?

9. Internal controls normally include procedures designed to provide reasonable assurance that:

10. Internal controls:

11. Financial statement manipulation risk is arguably present for all companies' financial statements. However, the risk is elevated for companies that:

12. Which of the following is not a factor that relates to opportunities to misappropriate assets?

13. Two of the most useful warning signals that can indicate that revenue fraud is occurring are:

14. In the fraud triangle, fraudulent financial reporting and misappropriation of assets:

15. Which of the following is a factor that relates to incentives to misappropriate assets?

16. The audit approach in which the auditor runs his or her own program on a controlled basis to verify the client's data recorded in a machine language is:

17. Auditors should evaluate which of the following before evaluating application controls because of the potential for pervasive effects?

18. Which of the following is a component of general controls?

19. General controls may include firewalls which are used to protect from:

20. An internal control deficiency occurs when computer personnel:

21. Analytical procedures:

22. In the context of an audit of financial statements, substantive tests are audit procedures that:

23. A system walkthrough is primarily used to help the auditor:

24. Which of the following audit tests is usually the least costly to perform?

25. Presentation and disclosure related audit objectives would be performed in which phase of the audit process?

Strayer ACC 403 Midterm Exam part 2 NEW

Check this A+ tutorial guideline at

For more classes visit

1. In the performance of an audit, a CPA:

2. Under the laws of agency, partners of a CPA firm may be liable for the work of others on whom they rely. This would not include:

3. An individual who is not party to the contract between a CPA and the client, but who is known by both and is intended to receive certain benefits from the contract is known as:

4. Fraud occurs when:

5. Laws that have been passed by the U.S. Congress and other governmental units are:

6. While the Foreign Corrupt Practices Act of 1977 remains in effect, its internal control provisions have been largely superseded by which of the following?

7. The cycle approach to auditing:

8. If a short-term note payable is included in the accounts payable balance on the financial statement, there is a violation of the:

9. If the auditor believes that the financial statements are not fairly stated or is unable to reach a conclusion because of insufficient evidence, the auditor:

10. The auditor has no responsibility to plan and perform the audit to obtain reasonable assurance that misstatements, whether caused by errors or fraud, that are not ________ are detected.

11. Which of the following is not one of the three categories of assertions?

12. "The auditor should not assume that management is dishonest, but the possibility of dishonesty must be considered." This is an example of:

13. Appropriateness of evidence is a measure of the:

14. An example of a document the auditor receives from the client, but which was prepared by someone outside the client's organization, is a:

15. A(n) ________ is the detailed instruction that explains the audit evidence to be obtained during the audit.

16. The Auditing Standards Board has concluded that analytical procedures are so important that they are required during:

17. Two determinants of the persuasiveness of evidence are:

18. Evidence is generally considered appropriate when:

19. Calculating the gross margin for the current year under audit as a percent of sales and comparing it with previous years is what type of evidence?

20. If an auditor is requested to perform nonaudit services for a public company audit client, who is responsible for agreeing to those services with the audit firm?

21. Most auditors assess inherent risk as high for related parties and related-party transactions because:

22. Smith, CPA has requested permission to communicate with the predecessor auditor in order to review certain workpapers for high risk accounts for a new audit client. The new audit client's refusal to allow this communication to occur would impact Rodgers decision concerning:

23. Which is a liquidity activity ratio?

24. The purpose of an engagement letter is to:

25. A measure of how willing the auditor is to accept that the financial statements may be materially misstated after the audit is completed and an unqualified opinion has been issued is the:

Strayer ACC 403 Final Exam Part 2 NEW

Check this A+ tutorial guideline at

For more classes visit

1. A document prepared to initiate shipment of the goods sold by an independent shipper is the:

2. The document used to indicate to the customer the amount of a sale and payment due date is the:

3. Who is generally responsible for opening receipts when a company uses a lockbox to speed the handling of cash receipts?

4. An effective procedure to test for unbilled shipments is to trace from the:

5. A ________ is a document that is matched with the customer order to assure that the correct quantity and type of goods are shipped.

6. The most serious shortcoming of the haphazard sample selection method is:

7. When the computed upper exception rate is greater than the tolerable exception rate, it is necessary for the auditor to take specific action. Which of the following courses of action would be most difficult to justify?

8. A sample in which every possible combination of items in the population has an equal chance of constituting the sample is a:

9. In systematic sample selection, the population size is divided by the number of sample items desired in order to determine the:

10. When the auditor decides to select less than 100 percent of the population for testing, the auditor is said to use:

11. If the client's internal control for recording sales returns and allowances is evaluated as ineffective:

12. The understatement of sales and accounts receivable is best uncovered by:

13. The audit procedure that provides the auditor with the most appropriate evidence when performing test of details of balances for accounts receivable is:

14. Which of the following most likely would be detected by a review of a client's sales cutoff?

15. The most important aspect of evaluating the client's method of obtaining a reliable cutoff is to:

16. The client's trial balance has a balance of $410,000 for merchandise inventory. As the auditor you are willing to accept a balance that is within $20,000 of either side of the recorded balance. You compute a 95% confidence interval of $395,000 to $425,000. You could therefore:

17. When the sample selection is done using probability proportional to size sample selection (PPS):

18. The appropriate assumption to make regarding the overall percent of error in those population items containing an error is:

19. When errors are found in a sample, auditors in practice generally make the assumption:

20. If an auditor desires a greater level of assurance in auditing a balance, the acceptable risk of incorrect acceptance:

21. From which of the following evidence-gathering audit procedures would an auditor obtain most assurance concerning the existence of inventories?

22. Comparing the physical counts with the perpetual inventory master files satisfies the balance-related audit objective of:

23. A major difficulty in the verification of inventory cost records for the purpose of inventory valuation is in determining the reasonableness of the:

24. Boxes or other containers holding inventory should also be opened during test counts to determine the ________ of the inventory.

25. You are auditing the inventory account and are concerned about the possibility of an inventory overstatement. What is the best audit procedure to detect damaged inventory?

26. One of the primary approaches in dealing with uncertainties in loss contingencies uses a ________ threshold.

27. If a potential loss on a contingent liability is remote, the liability usually is:

28. While there is no professional requirement to do so on audit engagements, CPAs frequently issue a formal "management" letter to clients. The primary purpose of this letter is to provide:

29. The standard letter of inquiry to the client's legal counsel should be prepared on:

30. The letter of representation obtained from an audit client should be:

Strayer ACC 403 Mid Term Part 1 NEW

Check this A+ tutorial guideline at

For more classes visit

1. Recording, classifying, and summarizing economic events in a logical manner for the purpose of providing financial information for decision making is commonly called:

2. ________ risk reflects the possibility that the information upon which the business decision was made was inaccurate.

3. The use of the Certified Public Accountant title is regulated by:

4. The Sarbanes-Oxley Act applies to which of the following companies?

5. Three common types of attestation services are:

6. The three requirements for becoming a CPA include all but which of the following?

7. Members of the Public Company Accounting Oversight Board are appointed and overseen by:

8. Assume the Public Company Accounting Oversight Board (PCAOB) identifies a violation during its inspection of a registered accounting firm. The PCAOB:

9. Hansen Corporation's stock is listed on a national stock exchange and registered with the Securities and Exchange Commission. Hansen's management hires a CPA to perform an independent audit of Hansen's financial statements. The primary objective of this audit is to provide assurance to the:

10. Which of the following are audit standards used in professional practice by audit firms?

11. Statements on Auditing Standards issued by the AICPA's Auditing Standards Board are:

12. In order to properly plan and perform an audit, an important fact for both the auditor and the client to understand is that:

13. The first step to be followed when deciding the appropriate audit report in a given set of circumstances is to:

14. As a result of management's refusal to permit the auditor to physically examine inventory, the auditor must depart from the unqualified audit report because:

15. If the phrase "except for" is present in the opinion paragraph of the audit report, the auditor has issued a(n):

16. Under AICPA auditing standards, the primary auditor issuing the opinion on the financial statements is called the:

17. Whenever the client imposes restrictions on the scope of the audit, the auditor should be concerned that management may be trying to prevent discovery of misstatements. In such cases, the auditor will likely issue a:

18. Which of the following is least likely to cause uncertainty about the ability of an entity to continue as a going concern?

19. The members of a client's "audit committee" should be:

20. Which of the following services are allowed by the SEC whenever a CPA also audits the company?

21. A six-step approach is often used to resolve an ethical dilemma. The first step in this process is to:

22. Under the AICPA independence rules, the auditor:

23. Independence is required of a CPA when performing:

24. When CPAs are able to maintain their actual independence, it is referred to as independence in:

25. The Sarbanes-Oxley Act ________ a CPA firm from doing both bookkeeping and auditing services for the same public company client.

Strayer ACC 403 Final Exam 2 Chp. 14-17 & 21&24 NEW

Check this A+ tutorial guideline at

For more classes visit

1. What critical event must take place before goods can be shipped in order to assure payment can be reasonably expected?

2. When designing audit procedures, tracing of source documents to the customers subsidiary ledger and subsequently to the general ledger is done to satisfy what assertion?

3. The audit procedure referred to as proof of cash receipts is particularly useful to test:

4. When an employee who is authorized to make customer entries in the accounts receivable subsidiary ledger, purposefully enters cash received into the wrong customer's account that employee may be suspected of:

5. A document sent to each customer showing his or her beginning accounts receivable balance and the amount and date of each sale, cash payment received, any debit or credit memo issued, and the ending balance is the:

6. One of the causes of nonsampling risk is:

7. A sample in which every possible combination of items in the population has an equal chance of constituting the sample is a:

8. To determine if a sample is truly representative of the population, an auditor would be required to:

9. When the auditor decides to select less than 100 percent of the population for testing, the auditor is said to use:

10. Which of the following would have the least impact in determining sample size?

11. When do most companies record sales returns and allowances?

12. Analytical procedures:

13. The audit procedure that provides the auditor with the most appropriate evidence when performing test of details of balances for accounts receivable is:

14. Most tests of accounts receivable are based on what schedule, file, or listing?

15. The two primary classes of transactions in the sales and collection cycle are:

16. The appropriate assumption to make regarding the overall percent of error in those population items containing an error is:

17. The method used to measure the estimated total error amount in a population when there is both a recorded value and an audited value for each item in the sample is:

18. The auditor is concerned with the audited value rather than the error amount of each item in the sample when using:

19. The allowance for sampling risk when no misstatements are found in the sample is:

20. The most commonly used method of statistical sampling for tests of details of balances is:

21. Which of the following is a significant audit concern related to the transfer of inventory from one location to another?

22. A major difficulty in the verification of inventory cost records for the purpose of inventory valuation is in determining the reasonableness of the:

23. In most manufacturing companies, the inventory and warehousing cycle begins with the:

24. When determining the sample size for the number of items the auditor should count during the physical inventory:

25. The inventory and warehousing cycle can be thought of as having two separate but closely related systems, one involving the actual physical flow of goods, and the other the:

26. The standard letter of inquiry to the client's legal counsel should be prepared on:

27. Auditing standards require the auditor to communicate all management frauds and illegal acts to the audit committee:

28. A client representation letter is:

29. At the completion of the audit, management is asked to make a written statement that it is not aware of any undisclosed contingent liabilities. This statement would appear in the:

30. Which of the following subsequent events is most likely to result in an adjustment to a company's financial statements?

Strayer ACC 403 midterm exam part 1

Check this A+ tutorial guideline at

For more classes visit

1. ________ risk reflects the possibility that the information upon which the business decision was made was inaccurate.

2. Any service that requires a CPA firm to issue a report about the reliability of an assertion that is made by another party is a(n):

3. In "auditing" financial accounting data, the primary concern is with:

4. Which of the following services provides the lowest level of assurance on a financial statement?

5. Three common types of attestation services are:

6. The most common way for users to obtain reliable information is to:

7. The legal right to perform audits is granted to a CPA firm by regulation of:

8. The form that must be filed with the Securities and Exchange Commission whenever a company plans to issue new securities to the public is the:

9. For privately held companies who is responsible for establishing auditing standards?

10. The "Principles Underlying an Audit in Accordance with Generally Accepted Auditing Principles" provides a framework to help auditors:

11. The Public Company Accounting Oversight Board:

12. Statements on Standards for Accounting and Review Services are issued by the:

13. The auditor's responsibility section of the standard audit report states that the auditor is:

14. The standard unqualified audit report:

15. Under AICPA auditing standards, the primary auditor issuing the opinion on the financial statements is called the:

16. An audit of historical financial statements most commonly includes the:

17. The standard unqualified audit report for public entities includes the following three paragraphs:

18. If most or all users' decisions that are based on the financial statements are likely to be significantly affected, the materiality level is:

19. Which of the following is required for a firm to designate itself "Member of the American Institute of Certified Public Accountants" on its letterhead?

20. The Sarbanes-Oxley Act requires a cooling off period of ________ before a member of an audit team can work for a client in a key management position?

21. The Sarbanes-Oxley Act ________ a CPA firm from doing both bookkeeping and auditing services for the same public company client.

22. Which of the following services are allowed by the SEC whenever a CPA also audits the company?

23. "Independence" in auditing means:

24. 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?

25. An auditor's independence is considered impaired if the auditor has:

Strayer ACC 403 Mid Term I NEW

Check this A+ tutorial guideline at

For more classes visit

1. An audit to determine whether an entity is following specific procedures or rules set down by some higher authority is classified as a(n):

2. Which of the following services provides the lowest level of assurance on a financial statement?

3. Any service that requires a CPA firm to issue a report about the reliability of an assertion that is made by another party is a(n):

4. Which of the following is not a SysTrust Services principle as defined by the AICPA?

5. An examination of part of an organization's procedures and methods for the purpose of evaluating efficiency and effectiveness is what type of audit?

6. One objective of an operational audit is to:

7. Hansen Corporation's stock is listed on a national stock exchange and registered with the Securities and Exchange Commission. Hansen's management hires a CPA to perform an independent audit of Hansen's financial statements. The primary objective of this audit is to provide assurance to the:

8. The AICPA has authority to establish standards and rules in all but which of the following areas?

9. Which of the following is an element of the CPA's quality control system that should be considered in establishing its quality control policies and procedures?

10. Within the context of quality control, the primary purpose of continuing professional education and training activities is to enable a CPA firm to provide its personnel with:

11. Which of the following are audit standards used in professional practice by audit firms?

12. The organization that is responsible for providing oversight for auditors of public companies is called the ________.

13. 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:

14. A misstatement in the financial statements can be considered material if knowledge of the misstatement will affect a decision of:

15. When dealing with materiality and scope limitation conditions:

16. Which of the following is least likely to cause uncertainty about the ability of an entity to continue as a going concern?

17. The appropriate audit report date for a standard nonqualified audit report for a non-public entity should be the:

18. Auditing standards require that the audit report must be titled and that the title must:

19. The AICPA's Code of Professional Conduct requires independence for all:

20. 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:

21. When determining whether independence is impaired because of an ownership interest in a client company, materiality will affect ownership:

22. 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?

23. The underlying reason for a code of professional conduct for any profession is:

24. Freedom from ________ means the absence of relationships that might interfere with objectivity or integrity.

25. Interpretations of the rules regarding independence allow an auditor to serve as:

Strayer ACC 403 Mid Term Part 2 NEW

Check this A+ tutorial guideline at

For more classes visit

1. The principal issue in cases involving alleged negligence is usually:

2. "Absence of reasonable care that can be expected of a person in a set of circumstances" defines:

3. While the Foreign Corrupt Practices Act of 1977 remains in effect, its internal control provisions have been largely superseded by which of the following?

4. The standard of due care to which the auditor is expected to adhere to in the performance of the audit is referred to as the:

5. In the performance of an audit, a CPA:

6. The laws that have been developed through court decisions are called:

7. The auditor's best defense when material misstatements are not uncovered is to have conducted the audit:

8. The responsibility for the preparation of the financial statements and the accompanying footnotes belongs to:

9. A questioning mindset:

10. The posting and summarization audit objective is the auditor's counterpart to management's assertion of:

11. The concept of reasonable assurance indicates that the auditor is:

12. If a short-term note payable is included in the accounts payable balance on the financial statement, there is a violation of the:

13. The evaluations of financial information through analysis of plausible relationships among financial and nonfinancial data is the definition of:

14. Appropriateness of evidence is a measure of the:

15. The auditor must gather sufficient and appropriate evidence during the course of the audit. Sufficient evidence must:

16. When auditors use documentation to support recorded transactions and amounts, the process is usually called:

17. A benefit obtained from using industry averages is that it provides a(n):

18. When the auditor uses tracing as an audit procedure for tests of transactions she is primarily concerned with which audit objective?

19. Calculating the gross margin for the current year under audit as a percent of sales and comparing it with previous years is what type of evidence?

20. Business risk:

21. In making client acceptance decisions, the audit firm will consider:

22. If an auditor is requested to perform nonaudit services for a public company audit client, who is responsible for agreeing to those services with the audit firm?

23. The auditor is likely to accumulate more evidence when the audit is for a company:

24. Most auditors assess inherent risk as high for related parties and related-party transactions because:

25. The two major factors affecting acceptable audit risk are:

Strayer ACC 403 Midterm part 2 NEW

Check this A+ tutorial guideline at

For more classes visit

1. In the performance of an audit, a CPA:

2. Under the laws of agency, partners of a CPA firm may be liable for the work of others on whom they rely. This would not include:

3. An individual who is not party to the contract between a CPA and the client, but who is known by both and is intended to receive certain benefits from the contract is known as:

4. Fraud occurs when:

5. Laws that have been passed by the U.S. Congress and other governmental units are:

6. While the Foreign Corrupt Practices Act of 1977 remains in effect, its internal control provisions have been largely superseded by which of the following?

7. The cycle approach to auditing:

8. If a short-term note payable is included in the accounts payable balance on the financial statement, there is a violation of the:

9. If the auditor believes that the financial statements are not fairly stated or is unable to reach a conclusion because of insufficient evidence, the auditor:

10. The auditor has no responsibility to plan and perform the audit to obtain reasonable assurance that misstatements, whether caused by errors or fraud, that are not ________ are detected.

11. Which of the following is not one of the three categories of assertions?

12. "The auditor should not assume that management is dishonest, but the possibility of dishonesty must be considered." This is an example of:

13. Appropriateness of evidence is a measure of the:

14. An example of a document the auditor receives from the client, but which was prepared by someone outside the client's organization, is a:

15. A(n) ________ is the detailed instruction that explains the audit evidence to be obtained during the audit.

16. The Auditing Standards Board has concluded that analytical procedures are so important that they are required during:

17. Two determinants of the persuasiveness of evidence are:

18. Evidence is generally considered appropriate when:

19. Calculating the gross margin for the current year under audit as a percent of sales and comparing it with previous years is what type of evidence?

20. If an auditor is requested to perform nonaudit services for a public company audit client, who is responsible for agreeing to those services with the audit firm?

21. Most auditors assess inherent risk as high for related parties and related-party transactions because:

22. Smith, CPA has requested permission to communicate with the predecessor auditor in order to review certain workpapers for high risk accounts for a new audit client. The new audit client's refusal to allow this communication to occur would impact Rodgers decision concerning:

23. Which is a liquidity activity ratio?

24. The purpose of an engagement letter is to:

25. A measure of how willing the auditor is to accept that the financial statements may be materially misstated after the audit is completed and an unqualified opinion has been issued is the:

Strayer ACC 403 Final Exam Part 1 NEW

Check this A+ tutorial guideline at

For more classes visit

1. Auditors typically rely on internal controls of their private company clients:

2. An auditor who audits a business cycle that has low inherent risk should:

3.  

Inherent risk is often high for an account such as:

4.  

Auditors frequently refer to the terms audit assurance, overall assurance, and level of assurance to refer to ________.

5.  

To what extent do auditors typically rely on internal controls of their public company clients?

6.  

Which of the following is responsible for establishing a private company's internal control?

7.  

The auditors primary purpose in auditing the client's system of internal control over financial reporting is:

8.  

A five-step approach can be used to identify deficiencies, significant deficiencies, and material weaknesses. The first step in this approach is:

9.  

The employee in charge of authorizing credit to the company's customers does not fully understand the concept of credit risk. This lack of knowledge would constitute:

10.  

Which of the following deal with ongoing or periodic assessment of the quality of internal control by management?

11.  

Misappropriation of assets is normally perpetrated by:

12.  

Fraud is more prevalent in smaller businesses and not-for-profit organizations because it is more difficult for them to maintain:

13.  

Who is most likely to perpetrate fraudulent financial reporting?

14.  

Company management is often under pressure to increase revenue and/or net income. One approach is to use a "bill and hold" arrangement. This is an example of which of the following?

15.  

Most cases of fraudulent reporting involve:

16.  

A ________ is responsible for controlling the use of computer programs, transaction files and other computer records and documentation and releases them to the operators only when authorized.

17.  

The approach to auditing where the auditor does not test automated controls to reduce assessed control risk is called:

18.  

Which of the following is a component of general controls?

19.  

Which of the following computer-assisted auditing techniques inserts an audit module in the client's application system to identify specific types of transactions?

20.  

The audit approach in which the auditor runs his or her own program on a controlled basis to verify the client's data recorded in a machine language is:

21.  

The auditor would design which of the following audit tests to detect possible monetary errors in the financial statements?

22.  

Which of the following further audit procedures are used to determine whether all six transaction-related audit objectives have been achieved for each class of transactions?

23.  

The purpose of tests of controls is to provide reasonable assurance that the:

24.  

If tests of controls support the control risk assessment, then ________ in the audit risk model is increased.

25.  

A procedure designed to test for monetary misstatements directly affecting the correctness of financial statement balances is a:

Strayer ACC 403 Midterm Part 1 NEW

Check this A+ tutorial guideline at

For more classes visit

1. ________ risk reflects the possibility that the information upon which the business decision was made was inaccurate.

2. Any service that requires a CPA firm to issue a report about the reliability of an assertion that is made by another party is a(n):

3. In "auditing" financial accounting data, the primary concern is with:

4. Which of the following services provides the lowest level of assurance on a financial statement?

5. Three common types of attestation services are:

6. The most common way for users to obtain reliable information is to:

7. The legal right to perform audits is granted to a CPA firm by regulation of:

8. The form that must be filed with the Securities and Exchange Commission whenever a company plans to issue new securities to the public is the:

9. For privately held companies who is responsible for establishing auditing standards?

10. The "Principles Underlying an Audit in Accordance with Generally Accepted Auditing Principles" provides a framework to help auditors:

11. The Public Company Accounting Oversight Board:

12. Statements on Standards for Accounting and Review Services are issued by the:

13. The auditor's responsibility section of the standard audit report states that the auditor is:

14. The standard unqualified audit report:

15. Under AICPA auditing standards, the primary auditor issuing the opinion on the financial statements is called the:

16. An audit of historical financial statements most commonly includes the:

17. The standard unqualified audit report for public entities includes the following three paragraphs:

18. If most or all users' decisions that are based on the financial statements are likely to be significantly affected, the materiality level is:

19. Which of the following is required for a firm to designate itself "Member of the American Institute of Certified Public Accountants" on its letterhead?

20. The Sarbanes-Oxley Act requires a cooling off period of ________ before a member of an audit team can work for a client in a key management position?

21. The Sarbanes-Oxley Act ________ a CPA firm from doing both bookkeeping and auditing services for the same public company client.

22. Which of the following services are allowed by the SEC whenever a CPA also audits the company?

23. "Independence" in auditing means:

24. 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?

25. An auditor's independence is considered impaired if the auditor has:

Strayer ACC 403 Quiz 2 Chp 3-4 NEW

Check this A+ tutorial guideline at

For more classes visit

1. When there is a justified departure from GAAP which is considered material, the auditor should issue a(n):

2. Under AICPA auditing standards, the primary auditor issuing the opinion on the financial statements is called the:

3. The auditor's responsibility section of the standard audit report states that the auditor is:

4. The first step to be followed when deciding the appropriate audit report in a given set of circumstances is to:

5. When a qualified or adverse opinion is issued, the qualifying paragraph is inserted:

6. An audit of historical financial statements most commonly includes the:

7. 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:

8. 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:

9. Auditing standards for public companies are established by the:

10. The standard unqualified audit report for a non-public entity must:

11. The auditor's responsibility section of the standard unqualified audit report states that the audit is designed to:

12. An adverse opinion is issued when the auditor believes:

13. When dealing with materiality and scope limitation conditions:

14. Whenever the client imposes restrictions on the scope of the audit, the auditor should be concerned that management may be trying to prevent discovery of misstatements. In such cases, the auditor will likely issue a:

15. The standard unqualified audit report:

16. The underlying reason for a code of professional conduct for any profession is:

17. Freedom from ________ means the absence of relationships that might interfere with objectivity or integrity.

18. A CPA firm may charge a contingent fee for:

19. 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:

20. A six-step approach is often used to resolve an ethical dilemma. The first step in this process is to:

21. An auditor's independence is considered impaired if the auditor has:

22. Interpretations of the rules regarding independence allow an auditor to serve as:

23. ________ means that a person acts according to conscience, regardless of the situation.

24. 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?

25. The AICPA's Code of Professional Conduct requires independence for all:

26. The members of a client's "audit committee" should be:

27. "Independence" in auditing means:

28. 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?

29. 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:

30. Rule 301 of the AICPA's Code of Professional Conduct requires CPAs to maintain the confidentiality of client information. This rule would be violated if a CPA disclosed information without a client's consent as a result of a:

Strayer ACC 403 Quiz 1 Set 3 NEW

Check this A+ tutorial guideline at

For more classes visit

1. An accountant:

2. The Sarbanes-Oxley Act applies to which of the following companies?

3. A correct relationship among the auditor, the client, and the external users is:

4. Which of the following is considered audit evidence?

5. The most common way for users to obtain reliable information is to:

6. Any service that requires a CPA firm to issue a report about the reliability of an assertion that is made by another party is a(n):

7. The three requirements for becoming a CPA include all but which of the following?

8. ________ risk reflects the possibility that the information upon which the business decision was made was inaccurate.

9. The use of the Certified Public Accountant title is regulated by:

10. Which of the following is not a SysTrust Services principle as defined by the AICPA?

11. In "auditing" financial accounting data, the primary concern is with:

12. Recording, classifying, and summarizing economic events in a logical manner for the purpose of providing financial information for decision making is commonly called:

13. One objective of an operational audit is to:

14. An examination of part of an organization's procedures and methods for the purpose of evaluating efficiency and effectiveness is what type of audit?

15. Which of the following services provides the lowest level of assurance on a financial statement?

16. The "Principles Underlying an Audit in Accordance with Generally Accepted Auditing Principles" provides a framework to help auditors:

17. The form that must be completed and filed with the Securities and Exchange Commission whenever a company experiences a significant event that is of interest to public investors is the:

18. The legal right to perform audits is granted to a CPA firm by regulation of:

19. Assume the Public Company Accounting Oversight Board (PCAOB) identifies a violation during its inspection of a registered accounting firm. The PCAOB:

20. The form that must be filed with the Securities and Exchange Commission whenever a company plans to issue new securities to the public is the:

21. Within the context of quality control, the primary purpose of continuing professional education and training activities is to enable a CPA firm to provide its personnel with:

22. Which of the following statements best describes the primary purpose of Statements on Auditing Standards?

23. For privately held companies who is responsible for establishing auditing standards?

24. The methods used by a CPA firm to ensure that the firm meets is professional responsibilities to clients and others is:

25. In order to properly plan and perform an audit, an important fact for both the auditor and the client to understand is that:

26. Statements on Standards for Accounting and Review Services are issued by the:

27. The purpose of establishing quality control policies and procedures to accept or continue a client relationship is to:

28. Standards issued by the Public Company Accounting Oversight Board must be followed by CPAs who audit:

29. The Public Company Accounting Oversight Board:

30. Statements on Auditing Standards issued by the AICPA's Auditing Standards Board are:

Strayer ACC 403 Quiz 3 Set 1 NEW

Check this A+ tutorial guideline at

For more classes visit

1. If an auditor fails to fulfill a certain requirement in the contract, they may be guilty of:

2. The assessment against a defendant of that portion of the damage caused by the defendant's negligence is called:

3. In connection with the audit of financial statements, an independent auditor could be responsible for failure to detect a material fraud if:

4. Which of the following most accurately describes constructive fraud?

5. Which of the following auditor's defenses usually means nonreliance on the financial statements by the user?

6. The preferred defense in third party suits is:

7. A broad interpretation of the rights of third-party beneficiaries holds that users that the auditor should have been able to foresee as being likely users of financial statements have the same rights as those with privity of contract. This is known as the concept of:

8. The expectation gap:

9. In the auditing environment, failure to meet auditing standards is often:

10. The principal issue to be resolved in cases involving alleged negligence is usually:

11. Privity of contract exists between:

12. The principal issue in cases involving alleged negligence is usually:

13. Laws that have been passed by the U.S. Congress and other governmental units are:

14. "Absence of reasonable care that can be expected of a person in a set of circumstances" defines:

15. The standard of due care to which the auditor is expected to adhere to in the performance of the audit is referred to as the:

16. Which of the following is the auditor least likely to do when aware of an illegal act?

17. The most important general ledger account included in and affecting several cycles is the:

18. When an auditor believes that an illegal act may have occurred, the auditor should first:

19. When an auditor knows that an illegal act has occurred, she must:

20. Auditors accumulate evidence to:

21. A questioning mindset:

22. In testing for cutoff, the objective is to determine:

23. The responsibility for adopting sound accounting policies and maintaining adequate internal control rests with the:

24. The objective of an audit of the financial statements is an expression of an opinion on:

25. An audit must be performed with an attitude of professional skepticism. Professional skepticism consists of two primary components: a questioning mind and:

26. The posting and summarization audit objective is the auditor's counterpart to management's assertion of:

27. Fraudulent financial reporting is most likely to be committed by whom?

28. Which of the following is not one of the three categories of assertions?

29. Which of the following would most likely be deemed a direct-effect illegal act?

30. The concept of reasonable assurance indicates that the auditor is:

Strayer ACC 403 Quiz 1 Set 2 NEW

Check this A+ tutorial guideline at

For more classes visit

1. Which of the following is considered audit evidence?

2. Recording, classifying, and summarizing economic events in a logical manner for the purpose of providing financial information for decision making is commonly called:

3. The three requirements for becoming a CPA include all but which of the following?

4. An accountant:

5. Three common types of attestation services are:

6. Which of the following services provides the lowest level of assurance on a financial statement?

7. An examination of part of an organization's procedures and methods for the purpose of evaluating efficiency and effectiveness is what type of audit?

8. An audit to determine whether an entity is following specific procedures or rules set down by some higher authority is classified as a(n):

9. ________ risk reflects the possibility that the information upon which the business decision was made was inaccurate.

10. The use of the Certified Public Accountant title is regulated by:

11. A correct relationship among the auditor, the client, and the external users is:

12. One objective of an operational audit is to:

13. Any service that requires a CPA firm to issue a report about the reliability of an assertion that is made by another party is a(n):

14. In "auditing" financial accounting data, the primary concern is with:

15. The Sarbanes-Oxley Act applies to which of the following companies?

16. The Public Company Accounting Oversight Board:

17. Members of the Public Company Accounting Oversight Board are appointed and overseen by:

18. Which of the following is an element of the CPA's quality control system that should be considered in establishing its quality control policies and procedures?

19. Within the context of quality control, the primary purpose of continuing professional education and training activities is to enable a CPA firm to provide its personnel with:

20. The form that must be completed and filed with the Securities and Exchange Commission whenever a company experiences a significant event that is of interest to public investors is the:

21. Which of the following statements best describes the primary purpose of Statements on Auditing Standards?

22. To obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, the auditor must fulfill several performance responsibilities, including:

23. The AICPA has authority to establish standards and rules in all but which of the following areas?

24. Standards issued by the Public Company Accounting Oversight Board must be followed by CPAs who audit:

25. In order to properly plan and perform an audit, an important fact for both the auditor and the client to understand is that:

26. Statements on Standards for Accounting and Review Services are issued by the:

27. The International Standards on Auditing (ISAs):

28. The "Principles Underlying an Audit in Accordance with Generally Accepted Auditing Principles" provides a framework to help auditors:

29. The purpose of establishing quality control policies and procedures to accept or continue a client relationship is to:

30. Assume the Public Company Accounting Oversight Board (PCAOB) identifies a violation during its inspection of a registered accounting firm. The PCAOB:

Strayer ACC 403 Quiz 3 Chapter 5-6 NEW

Check this A+ tutorial guideline at

For more classes visit

1. If an auditor fails to fulfill a certain requirement in the contract, they may be guilty of:

2. Which of the following most accurately describes fraud?

3. Which of the following auditor's defenses usually means nonreliance on the financial statements by the user?

4. Which of the following most accurately describes constructive fraud?

5. The principal issue in cases involving alleged negligence is usually:

6. In the performance of an audit, a CPA:

7. The Foreign Corrupt Practices Act (FCPA) of 1977:

8. Privity of contract exists between:

9. The principal issue to be resolved in cases involving alleged negligence is usually:

10. An individual who is not party to the contract between a CPA and the client, but who is known by both and is intended to receive certain benefits from the contract is known as:

11. A CPA is subject to criminal liability if the CPA:

12. To succeed in an action against the auditor, the client must be able to show that:

13. A common way for a CPA firm to demonstrate a lack of duty to perform is by use of a(n):

14. The assessment against a defendant of the full loss suffered by a plaintiff regardless of the extent to which other parties shared in the wrongdoing is called:

15. Recklessness in the case of an audit is present if the auditor knew an adequate audit was not done but still issued an opinion, even though there was no intent to deceive financial statement users. This description is the legal term for:

16. The posting and summarization audit objective is the auditor's counterpart to management's assertion of:

17. The concept of reasonable assurance indicates that the auditor is:

18. Which of the following statements is the most correct regarding errors and fraud?

19. Which of the following is not one of the three categories of assertions?

20. The auditor has no responsibility to plan and perform the audit to obtain reasonable assurance that misstatements, whether caused by errors or fraud, that are not ________ are detected.

21. In certifying their annual financial statements, the CEO and CFO of a public company certify that the financial statements comply with the requirements of:

22. Management assertions are:

23. The responsibility for adopting sound accounting policies and maintaining adequate internal control rests with the:

24. A questioning mindset:

25. When an auditor knows that an illegal act has occurred, she must:

26. The most important general ledger account included in and affecting several cycles is the:

27. The cycle approach to auditing:

28. The auditor's best defense when material misstatements are not uncovered is to have conducted the audit:

29. When dealing with laws and regulations that do not have a direct effect on the financial statements, the auditor:

30. Which of the following is the auditor least likely to do when aware of an illegal act?

Strayer ACC 403 Quiz 1 Set 1 NEW

Check this A+ tutorial guideline at

For more classes visit

1. An audit to determine whether an entity is following specific procedures or rules set down by some higher authority is classified as a(n):

2. The Sarbanes-Oxley Act applies to which of the following companies?

3. Three common types of attestation services are:

4. ________ risk reflects the possibility that the information upon which the business decision was made was inaccurate.

5. In "auditing" financial accounting data, the primary concern is with:

6. The use of the Certified Public Accountant title is regulated by:

7. Which of the following is considered audit evidence?

8. One objective of an operational audit is to:

9. An examination of part of an organization's procedures and methods for the purpose of evaluating efficiency and effectiveness is what type of audit?

10. Any service that requires a CPA firm to issue a report about the reliability of an assertion that is made by another party is a(n):

11. Recording, classifying, and summarizing economic events in a logical manner for the purpose of providing financial information for decision making is commonly called:

12. Which of the following services provides the lowest level of assurance on a financial statement?

13. The most common way for users to obtain reliable information is to:

14. An accountant:

15. Which of the following is not a SysTrust Services principle as defined by the AICPA?

16. The "Principles Underlying an Audit in Accordance with Generally Accepted Auditing Principles" provides a framework to help auditors:

17. Statements on Standards for Accounting and Review Services are issued by the:

18. Which of the following statements best describes the primary purpose of Statements on Auditing Standards?

19. Which of the following are audit standards used in professional practice by audit firms?

20. Standards issued by the Public Company Accounting Oversight Board must be followed by CPAs who audit:

21. Which of the following is not one of the responsibilities of an auditor under the principles underlying an audit?

22. Hansen Corporation's stock is listed on a national stock exchange and registered with the Securities and Exchange Commission. Hansen's management hires a CPA to perform an independent audit of Hansen's financial statements. The primary objective of this audit is to provide assurance to the:

23. Which of the following is an element of the CPA's quality control system that should be considered in establishing its quality control policies and procedures?

24. The organization that is responsible for providing oversight for auditors of public companies is called the ________.

25. The Public Company Accounting Oversight Board:

26. Assume the Public Company Accounting Oversight Board (PCAOB) identifies a violation during its inspection of a registered accounting firm. The PCAOB:

27. When assessing the risk of material misstatements in the financial statements,

28. The AICPA has authority to establish standards and rules in all but which of the following areas?

29. The form that must be filed with the Securities and Exchange Commission whenever a company plans to issue new securities to the public is the:

30. The methods used by a CPA firm to ensure that the firm meets is professional responsibilities to clients and others is:

Strayer ACC 403 Quiz 2 NEW

Check this A+ tutorial guideline at

For more classes visit

1. A misstatement in the financial statements can be considered material if knowledge of the misstatement will affect a decision of:

2. As a result of management's refusal to permit the auditor to physically examine inventory, the auditor must depart from the unqualified audit report because:

3. 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:

4. The standard unqualified audit report for a non-public entity must:

5. An adverse opinion is issued when the auditor believes:

6. The standard unqualified audit report: