Question 1

Discuss the similarities and differences between the roles of independent auditors, GAO auditors, internal revenue agents, and internal auditors.

Accepted Answer

The answer of Discuss the similarities and differences between the...

Question 2

An integrated approach to auditing considers both the risk of misstatements and operating controls intended to prevent misstatements.

Accepted Answer

An integrated approach to auditing involves evaluating both the risk of misstatements and the effectiveness of operating controls to prevent or detect misstatements. This approach is designed to improve the overall quality of the audit and the reliability of the financial statements.

Question 3

Which of the following is not an example of a compliance audit?
A) The accounting personnel at the Chinese subsidiary following the financial statement preparation procedures prescribed in writing by the corporate controller.
B) Is the company paying the minimum wage rates required by state laws?
C) Determine if a company is meeting the financial covenants of a loan agreement with its lenders.
D) Is the computerized processing of payroll at the Indian subsidiary operating effectively and efficiently?

Accepted Answer

Options A, B, and C are all examples of compliance audits. Option D is an example of an operational audit, which assesses whether an organization's operations are effective and efficient.

Question 4

Compliance is a secondary objective of audits performed by the GAO of the financial information prepared by the various Federal government agencies before that information is submitted to Congress.

Accepted Answer

The answer of Compliance is a secondary objective of audits...

Question 5

To perform an audit, it is necessary for the information to be in a verifiable form and there must be some criteria by which the auditor can evaluate the information. Detail the information and criteria that would be used when
(A) an independent CPA firm audits a company's historical financial statements.
(B) an Internal Revenue Service auditor audits that same company's tax return.
(C) an internal auditor performs an operational audit to evaluate whether the company's computerized payroll processing system is operating efficiently and effectively.

Accepted Answer

The answer of To perform an audit, it is necessary...

Question 6

Discuss the similarities and differences between financial statement audits, operational audits, and compliance audits. Give an example of each type.

Accepted Answer

The answer of Discuss the similarities and differences between financial...

Question 7

List and discuss the three primary requirements to become a CPA.

Accepted Answer

The answer of List and discuss the three primary requirements...

Question 8

CPA firms are often called and thought of by outsiders as external auditors, independent auditors, or internal auditors.

Accepted Answer

CPA firms are often referred to as external auditors or independent auditors, but not internal auditors, as internal auditors are typically employed directly by the organization they audit.

Question 9

Which type of auditor audits the financial information prepared by various federal government agencies before it is submitted to Congress?
A) internal auditor
B) revenue agent
C) independent auditor
D) GAO auditor

Accepted Answer

GAO (Government Accountability Office) auditors are responsible for auditing the financial information of various government agencies before it is submitted to Congress. They are independent of the agency being audited and are accountable to Congress. Internal auditors work within an organization to evaluate its internal controls and processes, revenue agents focus on tax compliance, and independent auditors are hired by companies to audit their financial statements for accuracy and compliance with accounting standards.

Question 10

Results of compliance audits are typically reported to the company's management rather than to a broad spectrum of outside users.

Accepted Answer

Compliance audits are conducted to ensure that a company is following all relevant laws, regulations, and policies. The results of these audits are usually reported to the company's management, who are responsible for taking corrective actions as necessary. These reports may also be shared with specific external entities, such as regulatory agencies or financial auditors, but they are not typically made public or disseminated to a broad range of outside users.

Question 11

In a financial statement audit, the auditor
A) gathers evidence to determine whether the statements contain material errors or other misstatements.
B) must have a thorough understanding of the entity and its environment.
C) determines whether the financial statements are stated in accordance with specified criteria.
D) all of the above.

Accepted Answer

All three options are correct statements about the role of an auditor in a financial statement audit. The auditor must gather evidence to ensure that the statements are free from errors and material misstatements, must have a thorough understanding of the entity and its environment to provide context for their findings, and must determine whether the statements comply with established criteria. Therefore, option D is the best choice.

Question 12

The three requirements for becoming a CPA include all but which of the following?
A) uniform CPA examination requirement
B) education requirements
C) character requirements
D) experience requirement

Accepted Answer

The three main requirements for becoming a CPA are passing the Uniform CPA Examination, meeting specific education requirements, and fulfilling a certain amount of experience under the supervision of a CPA. Character requirements, such as a background check, may be part of the process in some jurisdictions, but they are not universally recognized as one of the three primary requirements.

Question 13

The primary purpose of a compliance audit is to determine whether the financial statements are prepared in compliance with generally accepted accounting principles.

Accepted Answer

The primary purpose of a compliance audit is to determine whether an entity is complying with laws, regulations, contracts, and other agreements. It may include a review of financial statements, but that is not the primary focus. The primary focus is on compliance with legal and regulatory requirements.

Question 14

The use of the Certified Public Accountant title is regulated by
A) the federal government.
B) state law through the licensing departments of each state.
C) the American Institute of Certified Public Accountants through the licensing departments of the tax and auditing committees.
D) the Securities and Exchange Commission.

Accepted Answer

The use of the Certified Public Accountant (CPA) title is regulated by state law through the licensing departments of each state. Each state has its own requirements for education, experience, and passing the Uniform CPA Exam in order to become licensed as a CPA in that state. The American Institute of Certified Public Accountants (AICPA) provides guidance and support to CPAs, but does not have direct authority over licensing. The federal government and Securities and Exchange Commission may have some oversight over specific accounting practices, but are not responsible for regulating the use of the CPA title.

Question 15

The primary role of the United States General Accounting Office is the enforcement of the Federal tax laws as defined by Congress and interpreted by the courts.

Accepted Answer

The primary role of the United States General Accounting Office (GAO) is to provide auditing, evaluation, and investigative services for Congress. While the GAO may assist with tax-related matters through audits and investigations, it is not primarily responsible for enforcing federal tax laws. That role is primarily fulfilled by the Internal Revenue Service (IRS) and the Department of Justice.

Question 16

Which of the following are required to have a written report regarding the assertion of another party?
A) 
B) 
C) 
D)

Accepted Answer

The answer of Which of the following are required to...

Question 17

The AICPA completed a significant revision of the CPA examination effective April 1, 2017. In total, the CPA Examination has four sections, and the total number of hours these four sections involve when taking the Examination is
A) 16 hours, 4 hours for each section.
B) 20 hours, 5 hours for each section.
C) 16 hours, 5 hours each for two of the sections, 3 hours for the other two sections.
D) 20 hours, 6 hours for two of the sections, 4 hours for the other two sections.

Accepted Answer

The CPA Examination consists of four sections, each allocated 4 hours, totaling 16 hours.

Question 18

The GAO reports to the Public Company Accounting Oversight Board, which reports to the Securities and Exchange Commission.

Accepted Answer

The Public Company Accounting Oversight Board reports to the Securities and Exchange Commission, but the GAO does not report to the PCAOB.

Question 19

Internal auditors
A) must be independent of the entity that employs them.
B) report to the accounting department.
C) are employed by all types of organizations.
D) must be CPAs.

Accepted Answer

Internal auditors are employed by all types of organizations, including businesses, non-profit organizations, and government agencies. They provide independent and objective evaluations of an organization's operations and financial reporting to management and stakeholders. While independence is important for internal auditors, they are not required to be completely independent of the entity that employs them as external auditors are. Additionally, while some internal auditors may hold a CPA license, it is not a requirement for the role.

Question 20

Match between columns Premises: Determine if a public school is properly applying their reimbursement for the payment-in-kind program.
List A - Type of Audit: Determine the effectiveness of a Department of Defense project.
List A - Type of Audit: Evaluate a company's payroll processing for economy of scale.
List A - Type of Audit: Determine if the tax return of a multinational corporation is in accordance with the tax code.
List A - Type of Audit: Determine if Medicare reimbursements are in accordance with the Healthcare Financing Administration (HCFA).
List A - Type of Audit: Evaluate financial statements that are to be submitted to a bank.
List A - Type of Audit: Evaluate the promptness of materials inspection in a manufacturer's receiving department.
List A - Type of Audit: Evaluate/determine if bank covenants are being met.
List A - Type of Audit:

Accepted Answer

The Answer of Financial Statement and Operational
List B - Type is...

Quiz 1: The Demand for Audit and Other Assurance Services

Discuss the similarities and differences between the roles of independent auditors, GAO auditors, internal revenue agents, and internal auditors.

An integrated approach to auditing considers both the risk of misstatements and operating controls intended to prevent misstatements.

Which of the following is not an example of a compliance audit?

Compliance is a secondary objective of audits performed by the GAO of the financial information prepared by the various Federal government agencies before that information is submitted to Congress.

Discuss the similarities and differences between financial statement audits, operational audits, and compliance audits. Give an example of each type.

List and discuss the three primary requirements to become a CPA.

CPA firms are often called and thought of by outsiders as external auditors, independent auditors, or internal auditors.

Which type of auditor audits the financial information prepared by various federal government agencies before it is submitted to Congress?

Results of compliance audits are typically reported to the company's management rather than to a broad spectrum of outside users.

In a financial statement audit, the auditor

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

The primary purpose of a compliance audit is to determine whether the financial statements are prepared in compliance with generally accepted accounting principles.

The use of the Certified Public Accountant title is regulated by

The primary role of the United States General Accounting Office is the enforcement of the Federal tax laws as defined by Congress and interpreted by the courts.

Which of the following are required to have a written report regarding the assertion of another party?

The AICPA completed a significant revision of the CPA examination effective April 1, 2017. In total, the CPA Examination has four sections, and the total number of hours these four sections involve when taking the Examination is

The GAO reports to the Public Company Accounting Oversight Board, which reports to the Securities and Exchange Commission.

Internal auditors

Match the engagement described to the (A) type of audit and (B) auditor that would most likely perform the engagement. Each engagement will have an answer from List-A and List-B. An answer can be used once, more than once, or not at all.