True False Questions

2-1 © 2014 by McGraw-Hill Education. This is proprietary material solely for authorized instructor use. Not authorized for sale or distribution in any manner. This document may not be copied, scanned, duplicated, forwarded, distributed, or posted on a website, in whole or part.Chapter 02 Professional Standards

True / False Questions

• To express an opinion on financial statements, the auditor obtains reasonable assurance about

whether the financial statements as a whole are free from material misstatement, whether due to fraud or error.

True False

• The auditors' report on a corporation's financial statements usually is addressed to the president of

the company.

True False

• The auditors are primarily responsible for preparing the financial statements and expressing an

opinion on whether they follow generally accepted auditing standards.

True False

• Partners in CPA firms usually have the responsibility for signing the audit report.

True False

• An audit is more likely to detect tax evasion than violations of antitrust laws.

True False

• The attestation standards do not supersede generally accepted auditing standards.

True False

Principles of Auditing and Other Assurance Services 19th Edition Whittington Test Bank Visit TestBankDeal.com to get complete for all chapters

2-2 © 2014 by McGraw-Hill Education. This is proprietary material solely for authorized instructor use. Not authorized for sale or distribution in any manner. This document may not be copied, scanned, duplicated, forwarded, distributed, or posted on a website, in whole or part.

• A peer review is generally performed by employees of the AICPA.

True False

• If the auditors discover illegal acts by a client, they ordinarily should immediately resign from the

engagement.

True False

• An audit should be designed to obtain reasonable assurance of detecting non-compliance with all

laws.

True False

• The pronouncements of the International Auditing and Assurance Standards Board do not override

the national auditing standards of its members, even when financial statements are issued by a multinational company.

True False

Multiple Choice Questions

2-3 © 2014 by McGraw-Hill Education. This is proprietary material solely for authorized instructor use. Not authorized for sale or distribution in any manner. This document may not be copied, scanned, duplicated, forwarded, distributed, or posted on a website, in whole or part.

• Audits of financial statements are designed to obtain reasonable assurance of detecting

misstatement due to:

• Option A.

• Option B.

• Option C.

• Option D.

• Financial statements are prepared following a(an)

• Applicable financial reporting framework.

• Appropriate subject matter.

• Generally accepted auditing standards.

• Set of quality control standards.

13. An attestation engagement:

• Has as its primary source of standards the assurance standards.

• Includes a report on subject matter, or on an assertion about subject matter.

• Includes search and verification procedures for all major accounts.

• Is ordinarily an examination, review or compilation engagement.

2-4 © 2014 by McGraw-Hill Education. This is proprietary material solely for authorized instructor use. Not authorized for sale or distribution in any manner. This document may not be copied, scanned, duplicated, forwarded, distributed, or posted on a website, in whole or part.

• An audit provides reasonable assurance of detecting which of the following types of material illegal

acts?

• Option A.

• Option B.

• Option C.

• Option D.

• Which of the following is not a type of auditors' opinion?

• Adverse.

• Ordinary.

• Qualified.

• Unmodified.

• Which of the following is one of the elements of AICPA quality control?

• Assurance of proper levels of association.

• Due professional care.

• Engagement performance.

• Supervision.