Chapter Two: The CPA Profession. Exam Questions & Answers. Rated A+
The legal right to perform audits is granted to a CPA firm by regulation of
A. the Financial Accounting Standards Board (FASB).
B. the American Institute of Certified Public Accountants (AICPA).
C. the Auditing Standards Bo...
The legal right to perform audits is granted to a CPA firm by regulation of
A. the Financial Accounting Standards Board (FASB).
B. the American Institute of Certified Public Accountants (AICPA).
C. the Auditing Standards Board.
D. each state - ✔✔-Each state
Which of the following is not a characteristic of a small firm?
A. Small firms are prohibited by the SEC from auditing publicly traded companies.
B. Tax services are more important than auditing services to the small firm.
C. Small firms perform audits on small and not-for-profit businesses.
D. Most small firms have fewer than 25 professionals. - ✔✔-Small firms are prohibited by the SEC from
auditing publicly traded companies.
Which of the following statements is true as it relates to limited liability partnerships?
A. Partners have no liability in a limited liability partnership arrangement.
B. Only senior partners are liable for the partnerships debts.
C. All partners must be AICPA members.
D. Partners are personally liable for the acts of those under their supervision. - ✔✔-Partners are
personally liable for the acts of those under their supervision.
Which staff level in a CPA firm performs most of the detailed audit work?
A. partner
B. senior manager
C. senior auditor
D. staff assistant - ✔✔-Staff assistant
, The organization that is responsible for providing oversight for auditors of public companies is called the
A. Public Oversight Board.
B. Public Company Accounting Oversight Board.
C. Auditing Standards Board.
D. American Institute of Certified Public Accountants. - ✔✔-Public Company Accounting Oversight
Board.
Members of the Public Company Accounting Oversight Board are appointed and overseen by the
A. American Institute of Certified Public Accountants.
B. Securities and Exchange Commission.
C. U.S. Congress.
D. Auditing Standards Board. - ✔✔-Securities and Exchange Commission
The form that must be completed and filed with the Securities and Exchange Commission whenever a
company experiences a significant event that is of interest to public investors is the
A. Form 10-K.
B. Form S-1.
C. Form 8-K.
D. Form 10-Q. - ✔✔-Form 8-K
The form that must be filed with the Securities and Exchange Commission whenever a company plans to
issue new securities to the public is the
A. Form 10-K.
B. Form 10-Q.
C. Form 8-K.
D. Form S-1. - ✔✔-Form S-1
Statements on Standards for Accounting and Review Services (SSARS) are issued by the
A. Professional Ethics Executive Committee.
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