Question 1 2 out of 2 points Which of the following is not explicitly stated in the standard unqualified audit report?

Answer Selected Answer:

The audit was conducted in accordance with generally accepted accounting principles.

Correct Answer:

The audit was conducted in accordance with generally accepted accounting principles.

Question 2 2 out of 2 points 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: Answer Selected Answer: disclaimer of opinion whenever materiality is in question. Correct Answer: disclaimer of opinion whenever materiality is in question. Question 3 0 out of 2 points When the auditor evaluates the effect of a change in accounting principle, the materiality of the change should be evaluated based on:

Answer Selected Answer: guidelines included in GAAS. Correct Answer: the current year. Question 4 2 out of 2 points The standard audit report refers to GAAS and GAAP in which paragraphs? Answer Selected Answer: GAAS Scope only Correct Answer: GAAS Scope only Question 5 2 out of 2 points The introductory paragraph of the standard audit report states that the auditor is: Answer Selected Answer: responsible for the opinion on the financial statements. Correct Answer: GAAP Opinion only GAAP Opinion only

responsible for the opinion on the financial statements. Question 6 0 out of 2 points 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: Answer Selected Answer: an unqualified opinion. Correct Answer: a qualified opinion. Question 7 2 out of 2 points If the balance sheet of a company is dated December 31, 2011, the audit report is dated February 8, 2012, and both are released on February 15, 2012, this indicates that the auditor has searched for subsequent events that occurred up to: Answer Selected Answer: February 8, 2012. Correct Answer: February 8, 2012. Question 8 0 out of 2 points When a client has changed their method of valuing inventory from FIFO to LIFO and the

change has a material effect on the financial statements. If the auditor does not concur with the appropriateness of the change, the auditor should issue a(n): Answer Selected Answer: unqualified opinion. Correct Answer: qualified opinion. Question 9 2 out of 2 points The scope paragraph of the standard unqualified audit report states that the audit is designed to: Answer Selected Answer:

obtain reasonable assurance whether the statements are free of material misstatement.

Correct Answer:

obtain reasonable assurance whether the statements are free of material misstatement.

Question 10 2 out of 2 points To emphasize the fact that the auditor is independent, a typical addressee of the audit report could be: Answer Selected Answer:

Company Controller Shareholders No Correct Answer: Company Controller Shareholders No Question 11 2 out of 2 points The audit report date on a standard unqualified report indicates: Answer Selected Answer: Yes Yes

Board of Directors Yes

Board of Directors Yes

the last day of the auditor's responsibility for the review of significant events that occurred subsequent to the date of the financial statements.

Correct Answer:

the last day of the auditor's responsibility for the review of significant events that occurred subsequent to the date of the financial statements.

Question 12 2 out of 2 points In which situation would the auditor be choosing between "except for" qualified opinion and an adverse opinion? Answer Selected Answer: Lack of full disclosure within the footnotes. Correct Answer:

Lack of full disclosure within the footnotes. Question 13 2 out of 2 points The explanatory paragraph for a qualified opinion would: Answer Selected Answer: follow the scope paragraph. Correct Answer: follow the scope paragraph. Question 14 2 out of 2 points An audit of historical financial statements most commonly includes the: Answer Selected Answer: balance sheet, income statement, and the statement of cash flows. Correct Answer: balance sheet, income statement, and the statement of cash flows. Question 15 0 out of 2 points If an auditor performs an audit of a public company, the scope paragraph should make reference to which standards? Answer

Selected Answer: GAAS. Correct Answer: Standards issued by the PCAOB (U.S.). Question 16 0 out of 2 points Ethical Rulings are: I. Explanations relating to broad hypothetical circumstances. II. Not enforceable, but one must justify departure. III. Explanations relating to specific factual circumstances. Answer Selected Answer: I and III Correct Answer: II and III Question 17 0 out of 2 points According to the Principles section of the Code of Professional Conduct, all members: Answer Selected Answer:

should be independent in fact and in appearance at all times.

Correct Answer:

in public practice should be independent in fact and in appearance when

providing auditing and other attestations services. Question 18 2 out of 2 points In which of the following circumstances would a CPA be ethically bound to refrain from disclosing any confidential client information? Answer Selected Answer:

A major stockholder of a client company seeks accounting information from the CPA after management declined to disclose the requested information.

Correct Answer:

A major stockholder of a client company seeks accounting information from the CPA after management declined to disclose the requested information.

Question 19 0 out of 2 points CPAs are prohibited from which of the following forms of advertising? Answer Selected Answer: Celebrity endorsement advertising. Correct Answer: Use of phrases, such as "Guaranteed largest tax refunds in town!" Question 20 2 out of 2 points

When CPAs are able to maintain their actual independence, it is referred to as independence in: Answer Selected Answer: fact. Correct Answer: fact. Question 21 2 out of 2 points "Independence" in auditing means: Answer Selected Answer: taking an unbiased and objective viewpoint. Correct Answer: taking an unbiased and objective viewpoint. Question 22 2 out of 2 points Which of the following is not one of the four parts of the AICPA's Code of Professional Conduct? Answer Selected Answer: Definitions Correct Answer:

Definitions Question 23 0 out of 2 points The AICPA's Code of Professional Conduct requires independence for all: Answer Selected Answer: services performed by accountants in public practice. Correct Answer: attestation engagements. Question 24 2 out of 2 points The Code of Conduct rule on independence indicates that materiality must be considered when: Answer Selected Answer: Evaluating direct investments Evaluating indirect made by the CPA ownership investments No Correct Answer: Evaluating direct investments Evaluating indirect made by the CPA ownership investments No Question 25 2 out of 2 points Yes Yes

Which of the following is(are) true concerning the Ethical Principles of the Code of Professional Conduct? I. They identify ideal conduct. II. They are general ideals and difficult to enforce. Answer Selected Answer: I and II Correct Answer: I and II Question 26 0 out of 2 points If the board of accountancy in the state in which a CPA firm is licensed has rules that are different than the AICPA's rules, the CPA firm must follow: Answer Selected Answer: the rules of the state's board of accountancy. Correct Answer: whichever rules are more restrictive. Question 27 2 out of 2 points If a nonpublic company asks an accountant to perform a review engagement, and the accountant has an immaterial direct financial interest in the company, the accountant is: Answer Selected Answer:

not independent and, therefore, may not issue a review report. Correct Answer: not independent and, therefore, may not issue a review report. Question 28 2 out of 2 points 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: Answer Selected Answer: request by a client's largest stockholder. Correct Answer: request by a client's largest stockholder. Question 29 2 out of 2 points Interpretations of Independence Rule 101 prohibit covered members from owning any stock or other direct investment in audit clients. Covered members would include which of the following? Answer Selected Answer: All partners in the engagement office even if they have no engagement Individuals on the responsibility attest engagement

The firm and its employee benefit plans

Yes Correct Answer:

Yes

Yes

All partners in the engagement office even if they have no engagement Individuals on the responsibility attest engagement Yes Question 30 0 out of 2 points Yes

The firm and its employee benefit plans Yes

One of the AICPA's Ethical Principles deals with the public interest. It states that members should accept the obligation to act in a way that will: Answer Selected Answer: Honor the public trust No Correct Answer: Honor the public trust Yes Sunday, November 4, 2012 10:55:54 AM EST OK Serve the client's interest No Serve the client's interest No