TEST BANK For Principles of Auditing and Other Assurance Services 22nd Edition by Ray Whittington, Kurt Pany

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Test Bank for Principles of Auditing and Other Assurance Services 22nd Edition by
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e Ray Whittington, Kurt Pany 2024 A+
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Answers zare zat zthe zend zof zeach zchapter zChapter z1 Student
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e name:
1) Accountants are regulated by a variety of organizations. Match the statementse e e e e e e e e e




e with the most directly related organization:
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● Accounting and Review Services Committee. e e e e




● American Institute of Certified Public Accountants. e e e e e




● Auditing Standards Board. e e




● Federal Accounting Standards Advisory Board.
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● Financial Accounting Standards Board. e e e




● General Accounting Office. e e




● Government Accounting Standards Board. e e e




● Public Company Accounting Oversight Board.
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● Securities and Exchange Commission. e e e




● State Boards of Accountancy.
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Organizations may be used once, more than once, or not at
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e all. Statements
e Organizations
A. Develops accounting standards e e




e for public and nonpublic
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e companies.
B. Develops accounting standards for the U.S. Government.
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C. Improves standards of financial accounting for state and
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e local government entities.
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D. Issues auditing standards for public companies.
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E. Issues CPA certificates. e e




F. Prepares the CPA exam. e e e




Organizations: American Institute of Certified Public Accountants, Federal Accounting
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Standards Advisory Board, Financial Accounting Standards Board, Government
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Accounting Standards Board, Public Company Accounting Oversight Board, State
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e Boards of Accountancy. e e




2) The Sarbanes-Oxley Act of 2002 made significant reforms for public
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e companies and their auditors. e e e




a. Describe the events that led up to the passage of the Act. e e e e e e e e e e e




b. Describe the major changes made by the Act. e e e e e e e




3) Many people confuse the responsibilities of the independent auditors and
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e the client's management with respect to audited financial statements.
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a. Describe management's responsibility regarding audited financial statements.
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b. Describe the independent auditors' responsibility regarding audited
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e financial statements. e




c. Evaluate the following statement: "If the auditors disagree with management
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eregarding an accounting principle used in the financial statements, the auditors
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e should express their views in the notes to the financial statements."
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4) An investor is considering investing in one of two companies. The companies
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e have very similar reported financial position and results of operations. However, only
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e one of the companies has its financial statements audited.
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a. Describe what creates the demand for an audit in this situation. Include a
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ediscussion of how audited financial statements facilitate this investment transaction,
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e and the effect of the audit on business risk and information risk.
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b. Identify the potential consequences to the company of not having its
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e financial statements audited. e e




5) A summary of findings rather than assurance is most likely to be included in
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a(n):
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A) Agreed-upon procedures report. e e




B) Compilation report. e




C) Audit report.
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D) Review report. e




6) The Statements on Auditing Standards have been issued by the:
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A) Auditing Standards Board.
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B) Financial Accounting Standards Board.
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C) Securities and Exchange Commission.
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D) Federal Bureau of Investigation.
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7) The risk that a company’s financial statements will materially depart from
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e generally accepted accounting principles is referred to as:
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A) Business Risk. e




B) Information Risk. e




C) Detection Risk. e




D) Document Risk. e




8) Historically, which of the following has the AICPA been most concerned
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e with providing?
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A) Auditing standards. e




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B) Professional guidance for regulating financial markets. e e e e e




C) Internal auditing standards. e e




D) Staff support to Congress.
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9) The organization charged with protecting investors and the public by requiring
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e full disclosure of financial information by companies offering securities to the public
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e is the:
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A) Auditing Standards Board. e e




B) Financial Accounting Standards Board. e e e




C) Government Accounting Standards Boards. e e e




D) Securities and Exchange Commission. e e e




10) An engagement in which a CPA firm arranges for a critical review of its
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e practices by another CPA firm is referred to as a(n):
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A) Peer Review Engagement.
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B) Quality Control Engagement. e e




C) Quality Assurance Engagement. e e




D) Attestation Engagement. e




11) The sequentially-numbered pronouncements issued by the Auditing Standards
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e Board over a period of years are known as:
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A) Auditing Statements of Position (ASPs). e e e e




B) Accounting Series Releases (ASRs). e e e




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