ACC 562 Midterm Ch 1 - 3

Strayer
ACC 562 Advance Auditing
MIDTERM EXAM (CH 1 – 3)
Question 1

CPAs are licensed by the

Correct Answer: state's board of accountancy.

Question 2

The Certified Internal Auditor program is administered by the

Correct Answer: IIA.

Question 3

The objective of an operational audit is to

Correct Answer: evaluate the effectiveness and efficiency with which resources are employed.

Question 4

As it relates to an audit, materiality is

Correct Answer: determined based upon the importance to a user of the financial statements.

Question 5

Independent professional services that are provided on financial or other information that improve the quality of decision making are known as

Correct Answer: assurance services.

Question 6

An expectation of the public is that the auditor will recognize that the primary users of audit assurance are

Correct Answer: third-party users.

Question 7

The primary governing board that performs quality reviews on registered CPA firms that audit public companies is the

Correct Answer:
PCAOB

Question 8

An audit which has as its purpose the evaluation of the economy and efficiency with which resources are employed is known as a(n)

Correct Answer: operational audit.

Question 9

Management of a company is responsible for

Correct Answer: preparing the financial statements.

Question 10

The audit agency for the U. S. Congress is the

Correct Answer:
GAO.

Question 11

An audit committee must be comprised of outside directors and at least one outside financial expert. Which of the following is considered an outside director?

Correct Answer:
A director who is not a member of management and has no other relationship to the organization.

Question 12

A proper system of corporate governance is one that demands

Correct Answer: accountability back through the system to the shareholders.

Question 13

Section 304 of the