ACCT 4510 Chapter 1 The Role of the
Public Accountant in the American
Economy questions with correct
answers.
Match the type of Public accounting firm with its description. ANS -local firms -- one or two offices that
serves clients in a single city or area
regional firm --offices in multiple cities or states that serves clients in multiple cities or areas
national firm -- offices in most major cities in the United States
Big 4 firm -- largest international public accounting firms
Alternative practice structure firm -- publicly traded company that consolidation a pubic accounting firm
into the overall corporation
Association -- group of firms that create a separate legal entity to share resources
Many of the Treadway Commission's recommendations lead to a group of Statements on Auditing
Standards known as the _____ _____ standards. ANS -expectation gap
In the early 20th century which of the following were recognized as good fraud protection techniques?
ANS -strong internal control
surety bonds
All of the following events occurred following the accounting profession credibility crisis in the early
2000's except: ANS -the development of an internal control framework, Internal Control-Integrated
Framework
, The purpose of the Dodd-Frank Act is to _____. ANS -Improve accountability and transparency in the
financial system.
True or False: Financial audits are always performed by certified public accounting firms. ANS -False
During the first half of the 20th century, recognizing that it would be too costly, professional standards
began to emphasize limitations on the auditor's ability to detect _____, ANS -Fraud
The Sarbanes-Oxley Act of 2002 created the _____ to regulated audits and auditors of public companies.
ANS -PCAOB
Nonprofit organizations that receive financial assistance from the federal government must arrange for
a(n) _____ audit to determine whether the financial assistance spent in accordance with applicable laws
and regulations ANS -compliance
The Sarbanes-Oxley Act requires a(n) _____ audit for public companies. ANS -integrated
The study of a specific unit of an organization for the purpose is measuring its performance is a(n) _____
audit. ANS -operational
In order to be awarded a CPA certificate, candidates must _____. ANS --pass all four parts of the uniform
CPA exam
-satisfy the experience requirements of the licensing state
-satisfy the educational requirements of the licensing state.
The FASB's power has been designed by the _____. ANS -SEC
AICPA
The PCAOB has the responsibility to _____. ANS --perform inspections of the practices of registered
firms
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