Question 1

Financial statement audits are performed by _________ who have extensive knowledge of generally accepted accounting principles GAAP) in the US and/or International Financial Reporting Standards IFRS).
A)Public Auditors
B)Governmental Auditors
C)Certified Public Accountants
D)Internal Auditors

Accepted Answer

Certified Public Accountants

Question 2

This type of audit is completed to determine whether or not the client has prepared and presented its financial statements fairly, in accordance with established financial accounting criteria.
A)GAAP Audit
B)Financial Statement Audit
C)Compliance Audit
D)Fair Application Audit

Accepted Answer

Financial Statement Audit

Question 3

Which of the following is not one of the three primary types of audits?
A)Compliance Audits
B)Financial Statement Audits
C)IT Audits
D)Operational Audits

Accepted Answer

IT Audits

Question 4

This type of auditor is an employee of the company he / she audits.
A)IT Auditor
B)Government Auditor
C)Certified Public Accountant
D)Internal Auditor

Accepted Answer

Internal Auditor

Question 5

This type of audit is completed in order to determine whether a company has adhered to the regulations and policies established by contractual agreements, governmental agencies, or some other high authority.
A)Compliance Audit
B)Operational Audit
C)Information Audit
D)Financial Statement Audit

Accepted Answer

Compliance Audit

Question 6

Decision makers are typically forced to rely on others for information.When the source of the information is removed from the decision maker, the information stands a greater chance of being misstated.A decision maker may become detached from the source of information due to geography, organizational layers, or other factors.This describes which cause of information risk?
A)The lack of CPA independence
B)The volume and complexity of underlying data
C)The motive of the preparer
D)The remoteness of information

Accepted Answer

The remoteness of information

Question 7

Accounting services that improve the quality of information provided to the decision maker, an audit being the most common type of this service, is called:
A)Compliance Services
B)Assurance Services
C)Substantive Services
D)Operational Services

Accepted Answer

Assurance Services

Question 8

The chance that information used by decision makers may be inaccurate is referred to as:
A)Sample Risk
B)Data Risk
C)Audit Trail Risk
D)Information Risk

Accepted Answer

Information Risk

Question 9

The IT environment plays a key role in how auditors conduct their work in all but which of the following areas:
A)Consideration of Risk
B)Consideration of Information Fairness
C)Design and Performance of Audit Tests
D)Audit Procedures Used

Accepted Answer

Consideration of Information Fairness

Question 10

The main reasons that it is necessary to study information-based processing and the related audit function include:
A)Information users often do not have the time or ability to verify information themselves.
B)It may be difficult for decision makers to verify information contained in a computerized accounting system.
C)Both of the above.
D)Neither of the above.

Accepted Answer

Both of the above.

Question 11

Which of the following scenarios does NOT impair the independence of a CPA firm from its client?
A)The lead audit partner is the sister-in-law of the client's VP of Accounting
B)One of the auditors owns stock in a competitor of the client
C)One of the auditors is the golf partner of the client's CEO
D)The lead audit partner owns stock in the client

Accepted Answer

One of the auditors owns stock in a competitor of the client

Question 12

This type of audit is performed by independent auditors who are objective and neutral with respect to the company and the information being audited.
A)Compliance Audit
B)Operational Audit
C)Internal Audit
D)External Audit

Accepted Answer

External Audit

Question 13

A type of assurance services that involves accumulating and analyzing support for the information provided by management is called an:
A)Audit
B)Investigation
C)Financial Statement Examination
D)Control Test

Accepted Answer

Audit

Question 14

This type of auditor conducts audits of government agencies or income tax returns.
A)IT Auditor
B)Government Auditor
C)Certified Public Accountant
D)Internal Auditor

Accepted Answer

Government Auditor

Question 15

This type of auditor specializes in the information systems assurance, control, and security.They may work for CPA firms, government agencies, or with the internal audit group.
A)IT Auditor
B)Government Auditor
C)Certified Public Accountant
D)Internal Auditor

Accepted Answer

IT Auditor

Question 16

The main purpose of an audit is to assure users of the financial information about the:
A)Effectiveness of the internal controls of the company.
B)Selection of the proper GAAP when preparing financial statements.
C)Proper application of GAAS during the examination.
D)Accuracy and completeness of the information.

Accepted Answer

Accuracy and completeness of the information.

Question 17

The independence of a CPA could be impaired by:
A)Having no knowledge of the company or the company management
B)By owning stock of a similar company
C)Having the ability to influence the client's decisions
D)Being married to a stockbroker

Accepted Answer

Having the ability to influence the client's decisions

Question 18

An important requirement of CPA firms is that they must be ________ with regard to the company being audited.The requirement allows CPA firms to provide a completely unbiased opinion on the information it audits.
A)Neutral
B)Well-informed
C)Materially invested
D)All of the above

Accepted Answer

Neutral

Question 19

This type of audit is completed to assess the operating policies and procedures of a client for efficiency and effectiveness.
A)Efficiency Audit
B)Effectiveness Audit
C)Compliance Audit
D)Operational Audit

Accepted Answer

Operational Audit

Question 20

Which of the following is not one of the identified causes of information risk?
A)Audited information
B)Remote information
C)Complexity of data
D)Preparer motive

Accepted Answer

Audited information

Quiz 7: Auditing Information Technology Bases Processes

Financial statement audits are performed by _________ who have extensive knowledge of generally accepted accounting principles GAAP) in the US and/or International Financial Reporting Standards IFRS) .

This type of audit is completed to determine whether or not the client has prepared and presented its financial statements fairly, in accordance with established financial accounting criteria.

Which of the following is not one of the three primary types of audits?

This type of auditor is an employee of the company he / she audits.

This type of audit is completed in order to determine whether a company has adhered to the regulations and policies established by contractual agreements, governmental agencies, or some other high authority.

Accounting services that improve the quality of information provided to the decision maker, an audit being the most common type of this service, is called:

The chance that information used by decision makers may be inaccurate is referred to as:

The IT environment plays a key role in how auditors conduct their work in all but which of the following areas:

The main reasons that it is necessary to study information-based processing and the related audit function include:

Which of the following scenarios does NOT impair the independence of a CPA firm from its client?

This type of audit is performed by independent auditors who are objective and neutral with respect to the company and the information being audited.

A type of assurance services that involves accumulating and analyzing support for the information provided by management is called an:

This type of auditor conducts audits of government agencies or income tax returns.

This type of auditor specializes in the information systems assurance, control, and security.They may work for CPA firms, government agencies, or with the internal audit group.

The main purpose of an audit is to assure users of the financial information about the:

The independence of a CPA could be impaired by:

An important requirement of CPA firms is that they must be ________ with regard to the company being audited.The requirement allows CPA firms to provide a completely unbiased opinion on the information it audits.

This type of audit is completed to assess the operating policies and procedures of a client for efficiency and effectiveness.

Which of the following is not one of the identified causes of information risk?