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28 Cards in this Set

  • Front
  • Back

what correctly denotes the revised wording of the first general standard of auditing

the audit must be performed by a person or persons having adequate technical training and proficiency as an auditor

independence of mind, as defined in the AICPA's conceptual framework, is the state of mind that permits an individual to act with..?

objectivity, professional skepticism and integrity

in planning an audit of a new client, an auditor most likely would consider the methods used to process accounting information because such methods...

influence the design of internal control

the members of the Public Company Accounting Oversight Board are appointed and overseen by:

the Securities and Exchange Commission

The audit work performed by each assistant should be reviewed to determine whether it was adequately performed and to evaluate whether the...

results are consistent with the conclusions to be presented in the auditor's report

A CPA firm's personnel partner periodically studies the CPA girl's personnel advancement experience to ascertain whether individuals meeting stated criteria are assigned increased degrees of responsibility. this is evidence of the CPA firm's advancement to prescribed standards of...

quality control



which of the following elements underlies the application of generally accepted auditing standards, particularly the standards of fieldwork and reporting?

materiality and audit risk

the Securities and Exchange Commission can impose which sanctions?

suspend a CPA from auditing SEC clients, prohibit a CPA from accepting new SEC clients for a period of time and Require a CPA to participate in continuing professional educations programs and make changes in their practice.

Eigen Von is working on the audit engagement of the Epson Corp. for the CPA firm of York and Associates. As part of the engagement team, Eigen is a covered member on the audit. Which of the following situations would not cause the CPA firm to have an independence problem?

Eigen's site, who is his dependent for tax purposes, works for Epson as a sales clerk, a position viewed as visible to the public.

the CPA firm of Wilson and Pickett has finished the audit of Eastern South Corp. (ESC). ESC is not viewed as an issuer of securities. Its stock is not publicly trade. The company has no debts of the like that are publicly traded. The CPA firm is now preparing an unmodified audit opinion. Which of the following is described in the opening paragraph of that report?

the audited financial statements are identified

Jane Eyre works as a staff auditor for the CPA firm of East&West. She is currently working on the audit engagement of the Hitchcock Corp. Her daughter is employed by Hitchcock. Her daughter is 27 yo and not a dependent of Jane Eyre. The firm is trying to determine whether Jane must be removed from the audit team because of a lack of independence. In applying these rules, which designation is applied to the daughter?

close relative

in planning an audit, an auditor would most likely obtain an understanding of a continuing client's business by....

reviewing prior-year working papers and the permanent file for the client.

the auditor's judgement concerning the overall fairness of the presentation of financial position, results of operations, and changes in cash flow is applied within the framework of:

generally accepted accounting principles

the generally accepted audit standard that requires "adequate technical training and proficiency" is normally interpreted as requiring the auditor to have:

continuing professional education, adequate practical experience for the work to be performed, formal education in auditing and accounting

a CPA is most likely to refer to one or more of the three general auditing standards in determining:

whether the CPA should undertake an audit engagement

the element of the audit planning process most likely to be agreed upon with the client before implementation of the audit strategy is the determination of the:

schedules and analyses to be prepared by the client's staff

which of the following factors most likely would cause an auditor not to accept a new audit engagement?

concluding that the entity's management probably lacks integrity

the audit committee of a company must be made up of:

members of the board of directors who are not officers or employees

a CPA is subject to criminal liability if the CPA:

willfully omits a material fact from a set of financial statements

Under the Securities Exchange Act of 1934, which type of organization is required to submit audited financial statements of the SEC?

every corp. with securities traded on national and over-the-counter exchanges

historically, most major lawsuits against CPA firms have dealt with:

audited and unaudited financial statements

to succeed in an action against the auditor, the client company must be able to show that:

there is a close causal connection between the auditor's behavior and the damages suffered by the client

the three general standards

due professional care


adequate training and proficiency


independence of mental attitude

which of the following is the basic fundamental concept that underlies the audit process?

risk

the primary purpose of establishing quality control policies and procedures for deciding whether to accept a new client is to:

minimize the likelihood of association with clients whose management lacks integrity

what is the meaning of the generally accepted auditing standard which requires that the auditor be independent?

the auditor must be without bias with respect to the client under audit

which of the following is an illustration of a liability to clients under common law?

client sues auditor for not discovering a theft of assets by an employee.

fieldwork standards

sufficient appropriate audit evidence


understanding the entity and its environment including internal control


adequate planning and supervision