Professional Documents
Culture Documents
Raymond N. Johnson
Portland State University
Chapter 1 Auditing and the Public Accounting Profession Integrity of Financial Reporting
Chapter 1 Overview
Auditing Defined
Systematic process Objectively obtaining and evaluating evidence
Interested users
Types of Auditors
Independent Auditors
Internal Auditors
Government Auditors
Accounting Services
Compilation Services
Levels of Assurance
Reasonable Assurance Negative Assurance Agreed-upon Procedures Compilation Without Assurance
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1. This type of audit involves obtaining and evaluating evidence about the efficiency and effectiveness of an entitys operating activities. A. Financial Statement Audit B. Compliance Audit C. Operational Audit D. Internal Control Audit C. Operational Audit
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2. These auditors are typically CPAs who render professional auditing services to clients. A. Independent Auditors B. Internal Auditors C. Government Auditors D. IRS Auditors A. Independent Auditors
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3. Which of the following is not an economic benefit of a financial statement audit? A. Access to Capital Markets B. Lower Cost of Capital C. Control and Operational Improvements D. Maintain Fair Competition D. Maintain Fair Competition
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4. Which of the following is not an inherent limitation of a financial statement audit? A. Reasonable Cost B. Unlimited Timeframe C. Alternative Accounting Principles D. Accounting Estimates B. Unlimited Timeframe
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5. Which organization is considered to be a private sector organization? A. State Boards of Accountancy B. Securities and Exchange Commission C. AICPA D. IRS C. AICPA
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6. This component of regulatory framework includes the inspection of audits by the PCAOB staff and peers in other accounting firms. A. Standard setting B. Firm regulation C. Inspection and peer review D. Government regulation C. Inspection and peer review