Audit Ch. 1-2 Quiz
To emphasize the fact that the auditor isindependent, a typical addressee of the audit report could be: Company Controller: Shareholders: Board of Directors:
Company Controller: No Shareholders: Y Board of Directors: Y
When dealing with materiality and scope limitation conditions, A.it is easier to evaluate the materiality of potential misstatements resulting from a scope limitation than for failure to follow GAAP. B.a disclaimer of opinion must be issued. C.an unqualified opinion may still be issued depending on the materiality of the scope limitation. D.scope limitations imposed by the client are always considered material.
an unqualified opinion may still be issued depending on the materiality of the scope limitation.
Audits: A. are designed to provide absolute assurance that the financial statements are free of material misstatement. B.are an assurance service, but not an attestation service. C.do not require the auditor to express their opinion in a written report. D.are required for publicly traded companies in the United States.
are required for publicly traded companies in the United States.
The standard unmodified audit report A.can be issued only with an explanatory paragraph. B.can be issued if only a balance sheet and income statement are included in the financial statements. C.is sometimes called a disclaimer report. D.is sometimes called a clean opinion.
is sometimes called a clean opinion.
In order to properly plan and perform an audit, an important fact for both the auditor and the client to understand is that A.the internal control policies and procedures are developed by the auditors. B.management is responsible for the preparation of the financial statements. C.management can restrict the auditor's access to important information relevant to the financial statements. D.the purpose of an audit is to prevent fraud.
management is responsible for the preparation of the financial statements.
The purpose of establishing quality control policies and procedures to accept or continue a client relationship is to A.provide reasonable assurance that personnel are adequately trained to fulfill their responsibilities. B.minimize the likelihood of associating with a client whose management may lack integrity. C.monitor the risk factors concerning misstatements that arise from the misappropriation of assets. D.document objective criteria for the CPA firm's peer review.
minimize the likelihood of associating with a client whose management may lack integrity.
In most audits, the auditor issues a(n) A.scope limited audit report. B.standard unmodified opinion audit report. C.adverse audit report. D.modified opinion audit report.
standard unmodified opinion audit report.
When accounting principles are not consistently applied, and the materiality level is immaterial, the auditor will issue a(n): A. disclaimer opinion. B.unmodified opinion with an explanatory paragraph. C.adverse opinion. D.standard unmodified opinion.
standard unmodified opinion.
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 Securities and Exchange Commission. D.the American Institute of Certified Public Accountants through the licensing departments of the tax and auditing committees.
state law through the licensing departments of each state.
Definition of Auditing
the accumulation of evidence about information, by a competent and independent person, to determine and report on the degree of correspondence between the information and established criteria
All of the following would require an emphasis of matter paragraph except for A.material uncertainties disclosed in the footnotes. B.important events occurring subsequent to the balance sheet date. C.the lack of auditor independence. D.the existence of material related party transactions.
the lack of auditor independence.
An adverse opinion is issued when the auditor believes A.the financial statements would be found to be materially misstated if an investigation were performed. B.the auditor is not independent. C.some parts of the financial statements are materially misstated or misleading. D.the overall financial statements are so materially misstated that they do not present fairly the financial position or results of operations and cash flows in conformity with GAAP.
the overall financial statements are so materially misstated that they do not present fairly the financial position or results of operations and cash flows in conformity with GAAP.
As a result of management's refusal to permit the auditor to physically examineinventory, the auditor must depart from the unmodified opinion audit report because A.the financial statements have not been audited in accordance with GAAS. B.the financial statements have not been prepared in accordance with GAAP. C.the scope of the audit has been restricted. D.the scope of the audit has been restricted by circumstances beyond either the client's or auditor's control.
the scope of the audit has been restricted.
Under PCAOB standards, A.the standard unmodified opinion audit report is referred to as an unqualified opinion audit report. B.the scope paragraph is the same as the scope paragraph for private companies. C.the scope paragraph states that the financial statements are the responsibility of management. D.internal controls of a public company must be audited every five years.
the standard unmodified opinion audit report is referred to as an unqualified opinion audit report.
The CPA exam currently has_________ parts. There is a new project on the horizon which will change the structure of the CPA exam by 2024. It is called________?
4, CPA Evolution
Audit
A form of attestation service in which the auditor expresses a conclusion as to whether the financial statements are presented in accordance with an applicable financial reporting framework such as U.S. GAAP or IFRS.
Attestation
A type of assurance service in which the CPA firm issues a report about the reliability of an assertion that is made by another party.
The ______ is responsible for setting standards for private company audits. The _______ is responsible for setting standards for public company audits.
AICPA; PCAOB
Auditors do not provide which of the following? A. absolute assurance on the financial statements including assuming responsibility for them B.assurance on financial statements C.assurance on the effectiveness of internal controls over financial reporting D.assurance on corporate sustainability reports
Absolute assurance on the financial statements including assuming responsibility for them
What category of audit report will be issued if the auditor concludes that the financial statements are not fairly presented?
Adverse
In a financial statement audit, the auditor: A.gathers evidence to determine whether the statements contain material errors or other misstatements. B.determines whether the financial statements are stated in accordance with specified criteria. C.must have a thorough understanding of the entity and its environment. D.all of the above.
All
Assurance
An independent professional service that improves the quality of information for decision makers.
Internal auditors: A.report to the accounting department. B.must be independent of the entity that employs them. C. are employed by all types of organizations. D.must be CPAs.
Are employed by all types of organizations
The following questions deal with assurance services and types of audits. Choose the best response. A. Preparation B. Compilation C. Audit
Audit
Identify an example(examples) of auditing services. (Select all that apply.) A. Accounting and bookkeeping B.Audit of historical financial statements C.Certain management consulting D.Internal control over financial reporting E.Reviews F.Tax services
Audit of historical financial statements
Identify an example(examples) of assurance services. (Select all that apply.) A.Accounting and bookkeeping B.Audit of historical financial statements C.Certain management consulting D.Internal control over financial reporting E.Reviews F.Tax services
Audit of historical financial statements Certain management consulting Internal control over financial reporting Reviews
Identify an example(examples) of attestation services. (Select all that apply.) A.Accounting and bookkeeping B.Audit of historical financial statements C.Certain management consulting D.Internal control over financial reporting E.Reviews F.Tax services
Audit of historical financial statements Internal control over financial reporting Reviews
Who is responsible for establishing auditing standards for privately held companies? A. Securities and Exchange Commission B.Auditing Standards Board C.National Association of Accounting D.Public Company Accounting Oversight Board
Auditing Standards Board
The possibility that a business may not be able to repay a bank loan because of an economic downturn is referred to as: A. Information risk. B.interest rate risk. C.materiality risk. D.business risk.
Business risk
When the IRS audits the tax info for a corporation to ensure it is consistent with the rules in the Internal Revenue Code, it is performing a/an __________ audit.
Compliance
An audit to determine whether an entity is following specific procedures or rules set down by some higher authority is classified as a(n) A. production audit. B.audit of financial statements. C.compliance audit. D. operational audit.
Compliance audit.
Which organization has been delegated the responsibility of setting finical reporting standards (GAAP) for public companies? A. AICPA B. FASB C. CA state board of accountancy D. NCAA
FASB
If the auditor is unable to obtain the evidence they need to reach a conclusion, they are most likely to issue a _________. A.Unqualified opinion B.Adverse opinion C.Disclaimer of opinion D. Materiality revision
Disclaimer of opinion
(T/F) The basis of opinion component for a standard, unqualified opinion includes the following statement: "standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud" Reasonable assurance means that the auditor guarantees the financial statements are free of material misstatement.
False
An audit provides a guarantee that a material misstatement will not exist in the financial statements.
False
An auditor should accept the fact that management of an audit client may restrict access to persons within the entity from whom the auditor may need to obtain audit evidence due to client confidentiality.
False
An auditor will issue a disclaimer when he or she concludes that the financial statements are not fairly presented.
False
As misstatements become more pervasive, the likelihood of issuing a disclaimer rather than a qualified opinion increases.
False
Auditing can have a significant effect on both information risk and business risk.
False
In circumstances where the auditor is being asked to audit subjective types of information, typically, the auditor and the entities being audited should agree in writing about the criteria being audited after the audit starts.
False
In the auditor's responsibilities paragraph of the audit report issued for financial statements of a nonpublic company, the auditor expresses an opinion about the internal controls of the company.
False
Membership in the AICPA is mandatory for all licensed practicing CPAs.
False
Membership in the AICPA is restricted to CPAs who are currently practicing as independent auditors.
False
The Public Company Accounting Oversight Board (PCAOB) provides oversight to auditors of publicly traded and private companies.
False
The auditor's opinion paragraph of the auditor's report states that the auditor is responsible for the preparation, presentation and opinion on the financial statements.
False
When an auditor discovers a highly material GAAP violation in the financial statements and the client refuses to correct it, the auditor should issue a disclaimer of opinion.
False
Which of the following are required to have a written report regarding the assertion of another party?
Financial statement audit: Y Operation audit: Y Compliance audit: Y Attestation Engagement: Y Assurance Engagement: No
Which type of auditor audits the financial information prepared by various federal government agencies before it is submitted to Congress? A. internal auditor B.GAO auditor C.revenue agent D. independent auditor
GAO auditor
Which of the following audits can be regarded as generally being a compliance audit? A. GAO auditor's evaluation of the computer operations of governmental units B.an internal auditor's review of a company's payroll authorization procedures C.a CPA firm's audit of a public company D.IRS agents' examinations of taxpayer returns
IRS agents' examinations of taxpayer returns
Auditing standards for both public and private companies follow an ____scheme, making it easier for auditors to locate applicate standards. A. Indexing B. Marketing C. Random D. Unpredictable
Indexing
A bank loan officer is trying to decide whether the bank should make a loan to a particular company. The interest rate the bank will charge the company is determined by many factors. Which of the following factors is influenced by the auditor's report? A. the business risk for/of the customer B. the risk-free interest rate risk C. information risk D.All of the above are influenced by the auditor's report.
Info risk
Which risk(s) does the auditor reduce by performing an audit? (Select all that apply.)
Info risk
The Sarbanes-Oxley Act of 2002 was a game changer. Section 404 requires many public companies to obtain a ______ audit. A. Internal control B. Culture C. Financial statements D. Fraud
Internal Control
Which of the following are audit standards used in professional practice by audit firms?
International Standards on Auditing: Y AICPA Auditing Standards: Y PCAOB Auditing Standards: Y
One objective of an operational audit is to: A. make recommendations for improving performance. B.determine if the auditee is in compliance with GAAP. C.report on the entity's relative success in attaining profit maximization. D. determine whether the financial statements fairly present the entity's operations.
Make recommendations for improving performance.
Which of the following statements is true as it relates to limited liability partnerships? A.Partners are personally liable for the acts of those under their supervision. B.All partners must be AICPA members. C. Only senior partners are liable for the partnership's debts. D.Partners have no liability in a limited liability partnership arrangement.
Partners are personally liable for the acts of those under their supervision
Scope of audit responsibilities for CPAs. A. Perform strictly attestation service where a report is issued about the reliability of an assertion that is the responsibility of another party. B.Perform compliance audits to enforce the federal tax laws as defined by Congress, interpreted by the courts, and regulated by the IRS. C.Perform audits in accordance with auditing standards of financial statements prepared in accordance with U.S. GAAP or IFRS. D.Record, classify, and summarize economic events in a logical manner for the purpose of providing financial information for decision making.
Perform audits in accordance with auditing standards of financial statements prepared in accordance with U.S. GAAP or IFRS.
scope of the audit responsibilities for IRS agents. A.Perform compliance audits to enforce the federal tax laws as defined by Congress, interpreted by the courts, and regulated by the IRS. B.Record, classify, and summarize economic events in a logical manner for the purpose of providing financial information for decision making. C.Perform audits in accordance with accounting standards of published financial statements prepared in accordance with U.S. GAAS or CAS. D.Perform audits in accordance with auditing standards of financial statements prepared in accordance with U.S. GAAP or IFRS.
Perform compliance audits to enforce the federal tax laws as defined by Congress, interpreted by the courts, and regulated by the IRS.
scope of the audit responsibilities for internal auditors. A.Perform compliance or operational audits in order to assure management or the board of directors that controls and policies are properly and consistently developed, applied and evaluated. B.Perform compliance audits to enforce the federal tax laws as defined by U.S. GAAP or IFRS. C.Perform audits in accordance with accounting standards of published financial statements prepared in accordance with U.S. GAAS or CAS. D.Perform compliance or operational audits in order to assure the Congress of the expenditure of public funds in accordance with its directives and the law.
Perform compliance or operational audits in order to assure management or the board of directors that controls and policies are properly and consistently developed, applied and evaluated.
scope of audit responsibilities for GAO auditors. A.Perform audits in accordance with accounting standards of published financial statements prepared in accordance with U.S. GAAS or CAS. B. Perform compliance or operational audits in order to assure the Congress of the expenditure of public funds in accordance with its directives and the law. C.Perform compliance or operational audits in order to assure management or the board of directors that controls and policies are properly and consistently developed, applied and evaluated. D.Perform compliance audits to enforce the federal tax laws as defined by U.S. GAAP or IFRS. Part 3
Perform compliance or operational audits in order to assure the Congress of the expenditure of public funds in accordance with its directives and the law.
________ is an attitude that includes a questioning mind, being alert to conditions that might indicate possible misstatements due to fraud or error, and a critical assessment of audit evidence. A.Reasonableness B.Competence C.Diligence D.Professional skepticism
Professional skepticism
The organization that is responsible for providing oversight for auditors of public companies is called the: A. American Institute of Certified Public Accountants. B.Public Oversight Board. C.Auditing Standards Board. D.Public Company Accounting Oversight Board.
Public Company Accounting Oversight Board.
The PCAOB performs inspections of audit firm_____ and reviews individual engagement using a _______ approach A. Hiring policies; random B. Quality control; risk- based C. Sustainability practices; risk-based D. Polices; risk-based
Quality control; risk-based
What is meant by the term quality control as it relates to a CPA firm? A.Quality control is the same as auditing standards. To ensure that the quality control procedures in auditing standards are followed on every audit, a CPA firm is required to follow specific principles that help it meet those standards consistently on every engagement. B.Quality controls are the procedures governed by the AICPA Code of Professional Conduct to help CPA firms maintain professional skepticism and exercise professional judgment through peer reviews. C.Quality controls are the procedures used by a CPA firm that help it meet its professional responsibilities to clients. Quality controls are therefore established for the entire CPA firm as opposed to individual engagements. D.All of the above.
Quality controls are the procedures used by a CPA firm that help it meet its professional responsibilities to clients. Quality controls are therefore established for the entire CPA firm as opposed to individual engagements.
Which of the following is NOT one of the audit opinion report types we discussed in class? A. Unqualified B.Unqualified with explanatory paragraph C.Recurring D.Adverse E.Qualified
Recurring
Identify the four parts of the Uniform CPA Examination.
Regulation Auditing and Attestation Financial accounting and reporting Business environment and concepts
Which of the following is not one of the main sets of auditing standards around the world today? A.PCAOB Auditing Standards B.AICPA Auditing Standards C.Securities and Exchange Commission Auditing Standards D.International Standards on Auditing
Securities and Exchange Commission Auditing Standards
Which staff level in a CPA firm performs most of the detailed audit work?
Staff assistant
Sarbanes-Oxley and the Securities and Exchange Commission restrict auditors from providing many consulting services to their publicly traded audit clients.
True
Which of the following is not explicitly stated in the standard unmodified opinion audit report? A.The financial statements are the responsibility of management. B.The auditors believe that the audit evidence provides a reasonable basis for their opinion. C.An audit includes assessing the accounting estimates used. D.The audit was conducted in accordance with generally accepted accounting principles.
The audit was conducted in accordance with generally accepted accounting principles.
Which of the following engagements is most likely to be considered an operational audit? 1. The auditor determines whether the organization is following provisions of laws and regulations. 2. The auditor examines information presented in an entity's financial statements to determine whether the financial statements are presented fairly in accordance with the applicable financial reporting framework. 3. The auditor evaluates the organization's efficiency in processing payments. 4. The auditor assists the client in preparation of financial statements.
The auditor evaluates the organization's efficiency in processing payments.
The following is an example of a CPA firm's quality control procedure requirement: "Any person being considered for employment by the firm must have completed a basic auditing course and have been interviewed and approved by an audit partner of the firm before he or she can be hired for the audit staff." Which element of quality control does this procedure affect and what is the purpose of therequirement? A.The element of quality control is engagement performance. The purpose of the requirement is to help assure CPA firms that work is assigned to personnel selected for employment have the qualifications necessary for the fulfillment of their assigned responsibilities. A CPA firm must have competent employees conducting the audits if quality audits are to occur. B.The element of quality control is monitoring. The purpose of the requirement is to help assure CPA firms that work is assigned to personnel who have adequate technical training and proficiency. A CPA firm must have competent employees conducting the audits if quality audits are to occur. C.The element of quality control is leadership responsibilities. The purpose of the requirement is to help assure CPA firms that all new personnel are qualified to perform their work competently A CPA firm must have competent employees conducting the audits if quality audits are to occur. D.The element of quality control is personnel management. The purpose of the requirement is to help assure CPA firms that all new personnel are qualified to perform their work competently. A CPA firm must have competent employees conducting the audits if quality audits are to occur.
The element of quality control is personnel management. The purpose of the requirement is to help assure CPA firms that all new personnel are qualified to perform their work competently. A CPA firm must have competent employees conducting the audits if quality audits are to occur.
Risk-free interest rate
This is approximately the rate the bank could earn by investing in U.S. treasury notes for the same length of time as the business loan.
Business risk for the customer
This risk reflects the possibility that the business will not be able to repay its loan because of economic or business conditions such as a recession, poor management decisions, or unexpected competition in the industry.
Information risk
This risk reflects the possibility that the information upon which the business risk decision was made was inaccurate.
The most common type of audit opinion for public companies is the ____________; A.Unqualified opinion B.Qualified opinion C.Adverse opinion D. Disclaimer of opinion
Unqualified opinion
(T/F) Under PCAOB standards, auditors are required to issue an opinion on internal control over financial reporting for large public companies. The opinion on internal control over financial reporting can either be combined with the financial statement audit opinion OR presented separately from the financial statement audit opinion.
True
All of the Big Four accounting firms and many of the smaller CPA firms now operate as limited liability partnerships.
True
An integrated approach to auditing considers both the risk of misstatements and operating controls intended to prevent misstatements.
True
An unmodified opinion audit report with an emphasis-of-matter paragraph is issued when the auditor believes the financials are fairly stated but also believes additional information should be provided.
True
Auditing is a type of attestation service?
True
Auditors should issue a disclaimer of opinion when there is a highly materialclient-imposed scope restriction.
True
In an audit of internal controls over financial reporting, the auditor may rely upon Internal Control-Integrated Framework issued by COSO.
True
Items that materially affect the comparability of the financial statements generally require disclosure in the footnotes.
True
Materiality is essential when an auditor considers his/her determination of the appropriate report for a given set of circumstances.
True
PCAOB audit report requirements require the auditor to include the auditor's signature, tenure, city and state where the audit firm is located, as well as the audit report date.
True
Quality controls are established for the entire CPA firm whereas auditing standards are applicable to the individual engagement.
True
Section 404 of the Sarbanes-Oxley Act requires public companies to have an external auditor attest to their internal control over financial reporting.
True
The Auditing Standards Board (ASB) sets auditing standards in the U.S. for nonpublic entities.
True
The audit report date is the date the auditor completed audit procedures in the field.
True
The criteria by which an auditor evaluates the information under audit may vary with the information being audited.
True
The overall purpose of the Securities and Exchange Commission is to assist in providing investors with reliable information upon which to make investment decisions.
True
The primary purpose of a management consulting engagement is to generate a recommendation to management.
True
A misstatement in the financial statements can be considered material if knowledge of the misstatement will affect a decision of A.a reasonable user of the financial statements. B.the SEC. C.the PCAOB. D.an accountant.
a reasonable user of the financial statements.
Management has recorded prepaid insurance as an asset in the previous year. This year, to reduce record-keeping costs, it expenses insurance. If the amount is immaterial to the financial statements, A.a qualified opinion is issued. B.a disclaimer opinion is issued. C.a standard unmodified opinion audit report is issued. D.no audit report can be issued.
a standard unmodified opinion audit report is issued.
An audit of historical financial statements most commonly includes the A.balance sheet, income statement, statement of cash flows, and the statement of changes in stockholders' equity. B.statement of cash flows, balance sheet, and the statement of retained earnings. C.balance sheet, statement of retained earnings, and the statement of cash flows. D. income statement, the statement of cash flows, and the statement of net working capital.
balance sheet, income statement, statement of cash flows, and the statement of changes in stockholders' equity.
Assume the Public Company Accounting Oversight Board (PCAOB) identifies a violation during its inspection of a registered accounting firm. The PCAOB
can enforce disciplinary action against the accounting firm: Y report the matter to the Securities and Exchange Commission: Y suspend the license to practice of the CPA guilty of the violation: No
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 A.disclaimer of opinion whenever materiality is in question. B.disclaimer of opinion in all cases. C.qualification of both scope and opinion in all cases. D.qualification of both scope and opinion whenever materiality is in question
disclaimer of opinion whenever materiality is in question.
The legal right to perform audits is granted to a CPA firm by regulation of A.the Auditing Standards Board. B.the American Institute of Certified Public Accountants (AICPA). C.the Financial Accounting Standards Board (FASB). D. each state.
each state
Whenever an auditor issues an audit report for a public company, the auditor can choose to issue a report in which of the following forms? I. A combined report on financial statements and internal control over financial reporting II. Separate reports on financial statements and internal control over financial reporting
either
The most common way for users to obtain reliable information is to: A.verify all information individually. B.have an internal audit. C.verify the information with management. D.have an independent audit.
have an independent audit.
If the auditor lacks independence, a disclaimer of opinion must be issued
in all cases
Auditing standards require that the audit report must be titled and that the title must:
include the word "independent.
A CPA may wish to emphasize specific matters regarding the financial statements even though an unqualified opinion will be issued. Normally, such explanatory information is: A. Included in the introductory paragraph. B.included in the opinion paragraph. C.included in a separate paragraph in the report. D.included in the scope paragraph.
included in a separate paragraph in the report.
Quality control for a CPA firm A. is a guarantee that auditing standards are followed. B.is tailored to each specific audit engagement. C.is required only for firms auditing SEC companies. D.includes the organizational structure of the firm and the procedures it establishes.
includes the organizational structure of the firm and the procedures it establishes.
The AICPA principles and the auditing standards should be viewed by practitioners as A.maximum standards that denote excellent work. B.benchmarks to be used on all audits, reviews, and compilations. C.minimum standards of performance that must be achieved on each audit engagement. D.ideals to work towards, but which are not achievable.
minimum standards of performance that must be achieved on each audit engagement.
Which of the following statements is true? I. The auditor is required to issue a disclaimer of opinion in the event of a material uncertainty. II. The auditor is required to issue a disclaimer of opinion in the event of a going concern problem.
neither
The auditor's responsibilities section of the standard unmodified opinion audit report states that the audit is designed to A.obtain reasonable assurance whether the statements are free of material misstatement. B.discover all errors and/or irregularities. C.discover material errors and/or irregularities. D.conform to generally accepted accounting principles.
obtain reasonable assurance whether the statements are free of material misstatement.
In a financial statement audit, the auditor obtains a reasonable level of assurance about whether the financial statements are free of material misstatement in order to express an opinion. In order to obtain reasonable assurance, the auditor must 1.have prior experience in the industry in which the audit client operates. 2.examine all documents available that support the financial statements. 3.obtain sufficient audit evidence. 4.test controls around significant transaction cycles
obtain sufficient audit evidence.
The Public Company Accounting Oversight Board
performs inspections of the quality controls of firms that audit public companies.
Which of the following is not an essential component of quality control? A.policies that ensure that monitoring activities are effectively applied B.policies and procedures to ensure that firm personnel are actively engaged in marketing strategies C.policies to ensure that personnel maintain their independence in fact and in appearance D.policies and procedures to ensure that the work performed by firm personnel meet applicable professional standards
policies and procedures to ensure that firm personnel are actively engaged in marketing strategies
If the phrase "except for" is present in the opinion paragraph of the audit report, the auditor has issued a(n) A.unqualified opinion. B.disclaimer of opinion. C.qualified opinion. D.adverse opinion.
qualified opinion
The American Institute of Certified Public Accountants (AICPA): A. sets auditing standards for both public and private companies. B.sets rules of conduct that CPAs are required to meet. C.restricts its membership to CPAs who are independent auditors. D.is responsible for issuing licenses to new CPAs.
sets rules of conduct that CPAs are required to meet.
The highest level of materiality exists when A.a scope limitation has been imposed. B.users are likely to make incorrect decisions if they rely on the overall financial statements. C. there has been a departure from GAAP. D.amounts are material but do not overshadow the financial statements as a whole.
users are likely to make incorrect decisions if they rely on the overall financial statements.
The trait that distinguishes auditors from accountants is the: A. auditor's ability to interpret FASB Statements. B.auditor's education beyond the bachelor's degree. C.auditor's ability to interpret accounting principles generally accepted in the United States. D. auditor's expertise in the accumulation and the interpretation of audit evidence.
auditor's expertise in the accumulation and the interpretation of audit evidence.
