Auditing Test Bank Ch1

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Chapter 01
The Role of the Public Accountant in the American Economy

True / False Questions

1. Independent audits of today place more emphasis on sampling than did the audits of the 19th century.  True    False


2. The American Institute of Certified Public Accountants issues CPA certificates and permits CPAs to practice.  True    False


3. A company is either audited by the GAO or internal auditors, but not both.  True    False


4. The SEC does not pass on the merits of the securities that are registered with the agency.  True    False


5. The American Institute of Certified Public Accountants has the primary authority to establish accounting standards.  True    False


6. An annual peer review is a requirement of the AICPA. 
True    False


7. Many small companies elect to have their financial statements reviewed by a CPA firm, rather than incur the cost of an audit.  True    False


8. Staff assistants in CPA firms generally are responsible for planning and coordinating audit engagements.  True    False


9. The Sarbanes-Oxley Act requires that auditors of publicly traded companies in the United States perform an integrated audit that includes providing assurance on both the financial statements and on compliance with laws and regulations.  True    False


10. Auditing is frequently only a small part of the practice of local CPA firms.  True    False


Multiple Choice Questions

11. A summary of findings rather than assurance is most likely to be included in a(n):  A. Agreed-upon procedures report.
B. Compilation report.
C. Examination report.
D. Review report.


12. The Statements on Auditing Standards have been issued by the:  A. Auditing Standards Board.
B. Financial Accounting Standards Board.
C. Securities and Exchange Commission.
D. Federal Bureau of Investigation.


13. The risk associated with a company's survival and profitability is...
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