Auditing: Integral to the Economy

Topics: Auditing, Audit, Financial audit Pages: 25 (5331 words) Published: February 21, 2013
Name Chapter 1: Auditing: Integral to the Economy
Description
Instructions Modify
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Question 1 True/False 0 points Modify Remove
Question The need for assurance services arises because the interests of the users of information may be different from that of the interests of those responsible for providing information.
Answer True
False
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Question 2 True/False 0 points Modify Remove
Question An audit of financial statements is a form of attestation service. Answer True
False
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Question 3 True/False 0 points Modify Remove
Question Independence is an attribute necessary to perform assurance services. Answer True
False
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Question 4 True/False 0 points Modify Remove
Question A bank using Milton Company's financial statements to determine the creditworthiness of a potential loan to Milton is a good example of the need for unbiased reporting.
Answer True
False
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Question 5 True/False 0 points Modify Remove
Question Independence is only required for assurance service providers. Answer True
False
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Question 6 True/False 0 points Modify Remove
Question A CPA automatically qualifies as an assurance provider in all areas of business. Answer True
False
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Question 7 True/False 0 points Modify Remove
Question Attestation services are a subset of assurance services and always involve a report that goes to a third party. Answer True
False
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Question 8 True/False 0 points Modify Remove
Question The American Institute of Certified Public Accountants has the primary authority to set auditing standards. Answer True
False
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Question 9 True/False 0 points Modify Remove
Question The audit function is unique because it exists to perform services on a "client" on behalf of shareholders, directors and other parties.
Answer True
False
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Question 10 True/False 0 points Modify Remove
Question Auditing is the process of attesting to assertions about economic actions and events. Answer True
False
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Question 11 True/False 0 points Modify Remove
Question Auditing is the process of verifying the accuracy of the financial statements. Answer True
False
Add Question HereQuestion 12 True/False 0 points Modify Remove Question Internal auditing only provides assurance services to clients. Answer True
False
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Question 13 True/False 0 points Modify Remove
Question Auditing exists because users need unbiased information on which to assess management performance and make economic decisions.
Answer True
False
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Question 14 True/False 0 points Modify Remove
Question Users prefer management's financial statements over audited financial statements because few users have direct knowledge of the company's operations and management is the most knowledgeable about operations. Answer True

False
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Question 15 True/False 0 points Modify Remove
Question Users rely on auditors' independent assessment of financial statement presentation because few users have direct knowledge of the company's operations.
Answer True
False
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Question 16 True/False 0 points Modify Remove
Question An assertion is a positive statement about an action, event, condition, or performance over a specified time period. Answer True
False
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Question 17 True/False 0 points Modify Remove
Question Management is required to comment on the fairness of the company's financial presentation. This reduces the auditor's legal responsibility for the opinion rendered on the financial statements. Answer True

False
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Question 18 True/False 0 points Modify Remove
Question Audited financial statements should be free from all errors and fraud. Answer True
False
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Question 19 True/False 0 points Modify Remove
Question Audited financial...
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