Week1

Topics: Auditor's report, Audit, Auditing Pages: 7 (1751 words) Published: March 14, 2014
Chapter 2
Problem 2-16
a. International Standards on Auditing are established by the (1) International Accounting Standards Board.
(2) International Auditing and Assurance Standards Board.
(3) Auditing Standards Board.
(4) Global Auditing Standards Board.
b. Which of the following best describes what is meant by U.S. generally accepted auditing standards? (1) Acts to be performed by the auditor.
(2) Measures of the quality of the auditor’s performance. (3) Procedures to be used to gather evidence to support financial statements. (4) Audit objectives generally determined on audit engagements. c. The general group of U.S. generally accepted auditing standards includes a requirement that (1) field work be adequately planned and supervised.

(2) the auditor’s report state whether or not the financial statements conform to generally accepted accounting principles. (3) due professional care be exercised by the auditor.
(4) informative disclosures in the financial statements be reasonably adequate. d. What is the general character of the three generally accepted auditing standards classified as standards of field work? (1) The competence, independence, and professional care of persons performing the audit. (2) Criteria for the content of the auditor’s report on financial statements and related footnote disclosures. (3) The criteria of audit planning and evidence gathering.

(4) The need to maintain an independence in mental attitude in all matters pertaining to the audit. Problem 2-17
a. A CPA firm is reasonably assured of meeting its responsibility to provide services that conform with professional standards by (1) adhering to generally accepted auditing standards.
(2) having an appropriate system of quality control.
(3) joining professional societies that enforce ethical conduct. (4) maintaining an attitude of independence in its engagements.

b. The nature and extent of a CPA firm’s quality control policies and procedures depend on  
The CPA Firm’s Size
The Nature of the CPA Firm’s Practice
Cost-benefit Considerations
(1)
Yes
Yes
Yes
(2)
Yes
Yes
No
(3)
Yes
No
Yes
(4)
No
Yes
Yes
c. Which of the following are elements of a CPA firm’s quality control that should be considered in establishing its quality control policies and procedures?  
Human Resources
Monitoring
Engagement Performance
(1)
Yes
Yes
No
(2)
Yes
Yes
Yes
(3)
No
Yes
Yes
(4)
Yes
No
Yes
d. 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 firm’s 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. 2-19 (Objective 2-7) For each of the following procedures taken from the quality control manual of a CPA firm, identify the applicable element of quality control from Table 2-4 on page 38. a. Appropriate accounting and auditing research requires adequate technical reference materials. Each firm professional has online password access through the firm’s Internet Web site to electronic reference materials on accounting, auditing, tax, SEC, and other technical information, including industry data. Engagement performance b. Each office of the firm shall be visited at least annually by review persons selected by the director of accounting and auditing. Procedures to be undertaken by the reviewers are illustrated by the office review program. Human resources c. All potential new clients are reviewed before acceptance. The review includes consultation with predecessor auditors, and background checks. All new clients are approved by the firm management committee, including assessing whether the firm has the technical competence to complete the engagement....
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