Skip to content
Solved Assignments

ACC 562 Auditing and Professional Conduct: A Comprehensive Assessment

This assessment evaluates auditing practices and the professional conduct of auditors in compliance with industry standards.

Preview 7 of 20 pages

See the first 7 pages exactly as they appear in the document.

  1. Page 1
    Read page 1 as text

    ACC 562 Auditing and Professional Conduct: A Comprehensive Assessment ACC 562 MIDTERM EXAM LATEST 2015 Question 1 Answer Independent professional services that are provided on financial or other information that improve the quality of decision making are known as Answer internal auditing. financial auditing. assurance services. attestation services. Question 2 The objective of an operational audit is to Answer evaluate whether laws have been broken by management. evaluate fairness of presentation of financial statements. evaluate compliances with company rules and regulations. evaluate the effectiveness and efficiency with which resources are employed. Question 3 The AICPA remains a valuable organization because of its continuing involvement in Answer the audit standard setting process. regulation and enforcement of the audit profession. education and administration of the CPA exam. promulgation of accounting standards. Question 4 The auditor of financial statements must make very difficult interpretations regarding authoritative literature. Additionally, the auditor must Answer consider whether the application of a generally accepted accounting principle best portrays the economic activity of the company. force management to make certain decisions regarding their financial statements. disregard independence in order to find the underlying truth of the evidence. establish new criteria by which financial statements may be compared. Question 5 CPAs are licensed by the Answer PCAOB. AICPA. state's board of accountancy. state's society of CPAs. Question 6 The criteria against which the auditor measures the fairness of financial statement presentation are known as

  2. Page 2
  3. Page 3
    Read page 3 as text

    Answer auditing standards. generally accepted accounting principles. generally accepted accounting standards. governmental accounting principles. Question 7 The audit committee of the board of directors of a company is responsible for Answer hiring the auditor. preparing the financial statements. the audit workpapers. independence and obtaining evidence. Question 8 What is the criteria used in an operational audit? Answer GAAP. effectiveness and efficiency. rules and regulations. company policies. Question 9 As it relates to an audit, materiality is Answer not taken into consideration. related only to the sufficiency of procedures performed. based upon audit fees. determined based upon the importance to a user of the financial statements. Question 10 Auditing is important in a free market society because Answer the public requires CPAs functioning as divisions of regulatory bodies. auditors detect all errors and fraud made by company employees. it provides reliable information based upon which to judge economic performance. the auditor is an amiable insurance policy for investors. Question 11 Section 304 of the Sarbanes - Oxley Act requires executives to forfeit any bonus or incentive - based pay or profits (including stock options) from the sal e of stock received in the twelve months prior to an earnings restatement. This is often referred to as: Answer claw back provision give back provision restatement provision fraud provision Question 12 The AICPA is an organization that is Answer historically self - regulated.

  4. Page 4
    Read page 4 as text

    regulated by the federal government. regulated the state governments. a new organization established by an act of congress in 2002. Question 13 A proper system of corporate governance is one that demands Answer decision making by auditors in place of management. accountability back through the system to the shareholders. internal audit representation on the board of directors. audit planning to obtain competent and sufficient audit evidence. Question 14 The organization that will continue to set auditing standards for firms auditing private companies is the Answer FASB GAO SEC AICPA Question 15 Which of the following are the CEO and CFO of a public company prohibited from performing under the Sarbanes - Oxley Act of 2002? Answer Certification of financial statements Disclosure of off - balance sheet transactions Reporting on internal control over financial reporting Selecting the external auditors Question 16 The responsibility for operating an enterprise is delegated to the: Answer auditor. audit committee. management. board of directors. Question 17 According to the Sarbanes - Oxley Act of 2002, how often must audit managers and partners rotate off an engagement of a public company? Answer Each busy season When independence is in question Every five years Managers and partners are not required to rotate off of public client engagements Question 18 The audit client of the CPA firm is: Answer managemen t. the SEC.

  5. Page 5
    Read page 5 as text

    the audit committee. the stockholders. Question 19 The Sarbanes - Oxley Act of 2002 requires which of the following? Answer Only the largest four accounting firms may audit public companies. Smaller public companies that cannot afford to become compliant with the act must delist and become pink sheet companies. All publicly held companies will provide a report on internal control over financial reporting. Chief financial officers of public companies must be CPAs. Question 20 Which one of the following will provide auditing standards of public companies? Answer GAO AICPA GAAP PCAOB Question 21 Information about a client that cannot be subpoenaed by a court of law is referred to as wha t type of information? Answer confidential information. privileged communication. contingent information. audit communication Question 22 An auditor that has an attitude that includes a questioning mind and a critical assessment of audit evidence is considered which of the following? Answer Professionally Skeptical. Professionally Independent. Professionally Competent. Professionally Efficient. Question 23 A CPA firm is considered independent when it performs which of the following services for a publicly t raded audit client? Answer Serving as a member of the client’s board of directors. Determining which accounting policies will be adopted by the client as approved by the board of directors. Accounting information system design and implementation as approved by the board of directors. Tax return preparation as approved by the board of directors. Question 24 The AICPA Principles of Professional Conduct include which of the following? Answer

  6. Page 6
    Read page 6 as text

    public interest, objectivity and independence. due professional care and supervision. scope and nature of services and adequate training. integrity and confidentiality Question 25 Which of the following is included in the AICPA Code of Professional Conduct? Answer Principles, Rules of Conduct and Ethics Rulings. Rules of Conduct, Interpretations and Principles. Principles, Rules of Conduct and Ethics Rulings. Principles, Rules of Conduct, Interpretations and Ethics Rulings. Question 26 In determining the ty pes of activities, engagements and interactions an auditor should have with a client, the CPA and the audit firm must do which of the following? Answer only assess the relationships of clients that pay audit fees that are material to their firm. assess all of their relationships with every client to ensure that independence is intact. focus on client satisfaction above all other considerations. realize that ethics are only guidelines and a matter of personal judgment. Question 27 Mark Pulley is an auditor a t Pulley and Hurst, LLC. If Pulley's five - year - old daughter owns shares of stock in McBurgers Corporation, then Pulley is considered to have what type of interest in McBurgers Corporation? Answer immaterial indirect interest in McBurgers Corporation. material indirect interest in the McBurgers Corporation. a loophole for claiming independence from McBurgers Corporation. direct interest in McBurgers Corporation. Question 28 Independence is not required for which of the following types of services? Answer aud its. reviews. consulting. attestation. Question 29 Which one of the following is an example of a conflict of interest for a CPA? Answer performing tax services and a compilation engagement for a client serving as legal counsel and an auditor for a client providing an audit on internal financial controls and financial statements for a client being employed as a chief financial officer while serving as a member of the board of directors for the same company Question 30 William Tyler, CPA, may not accept a com mission for recommending a product or service to which type of client?

  7. Page 7
    Read page 7 as text

    Answer a tax client. an attestation client. a financial - planning client. a management - services client.

13 more pages in the full document

Unlock it once and it stays in your library, ready to chat with or turn into flashcards.

Unlock the full document

More Accounting study materials

See all

Study this document with CramX

Once it is in your library, every tool can work from it.