Auditing 1 ch. 2 Multiple Choice

You have been engaged to audit the final statements of a US public company. Which of the following is correct? 1) your firm must be registered with the PCAOB 2) your firm will be subject to auditing and quality control standards issued by the SEC 3) the firm must be either a national or big 4 CPA firm 4) you will engage to audit both the quarterly and annual financial statements of your client.

1)

Which of the following best describes what is meant by US auditing standards? 1) acts to be performed by the auditor 2) measured the quality of the auditor's performance 3) procedures to be used to gather evidence to support financial statements 4) audit objectives generally determine on audit engagements.

2)

Which of the following statements accurately describes US CPA firm that are not sole proprietorship? 1)most derive the majority revenues from tax services 2) the most common organization structure is the limited liability partnership structure 3) the firm will be subject to annual peer review 4) the number of other professional within a firm generally equal the number of partners in the firm

2)

One purpose of establishing quality control policies and procedures for deciding whether to accept a new client is to: 1) enable the CPA firm to attest to the reliability of the client 2) satisfy the CPA firms duty to the public concerning the acceptance of new clients 3) provide reasonable assurance that the integrity of the client is considered 4) anticipate before performing any field work whether an unqualified opinion can be issued.

3)

The responsibilities principles underlying AICPA auditing standards include a requirement that: 1) field work be adequately planned and supervised 2) the auditors report state whether or not the financial statements conform to GAAP 3) professional judgment to be exercised by the auditor 4) informative disclosures in the financial statements be reasonably adequate

3)

What is the general character of the responsibilities characterized by the performance principles? 1) the competence, independence, and professional care of persons performing the audit 2) criteria for the content of the auditors reports on financial statement and related footnote disclosures. 3) the criteria of audit planning and evidence gathering 4) the need to maintain an independence in the mental attitude in all matters pertaining to the audit

3)