Corporate Audit Questions

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INSTRUCTIONS:

1. Please read all instructions and questions carefully before responding. 2. There are ___ points available on this exam, allocated as follows: ________ multiple choice/true-false questions (__ points), _____ short answer questions (__ points) and _____ essay questions (__ points). 3. Keep track of the time remaining to complete the exam and allocate that time wisely. Do not devote disproportionate time to any one question or section. 4. GOOD LUCK!

MULTIPLE CHOICE/TRUE-FALSE QUESTIONS

For each question, please select the best answer. Clearly mark your selection (A, B, C, D or E, as applicable) on the accompanying Scantron form. If more than one letter (or no letter) is selected for a particular question, no credit will be given for that question.

1. Which of the following is not a Sarbanes-Oxley requirement for audit committees?

A. The audit committee should view itself as the “client” of the external auditor. B. The audit committee must be chaired by the chair of the board of directors. C. Audit committee members must be financially literate. D. Audit committee members must be outside directors.

2. There are several reasons why users of information desire assurance services from accountants. Which of the following is not such a reason?

A. the potential bias of management in providing information that will help them B. such services are required by federal law C. the remoteness of users of information
D. the complexity of business transactions

3. *The auditor concludes that a public company has significant deficiencies in its internal controls over financial reporting. Which of the following is a proper response to this finding?

A. Expand the planned testing of account balances to consider the types of errors that might occur because of the deficiency. B. Report the deficiencies to management and the audit committee. C. Report the deficiencies in the report to shareholders. D. All of the above.
E. A

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