Solved by verified expert :audit1. An adverse opinion occurs in a situation in which the auditors believe that departuresfrom GAAP are _____.A. materialB. pervasiveC. both A and BD. either A or B, but not bothE. neither A nor B2. Change in accounting principles and reporting entities result in _____.A. a disclaimer of opinionB. an emphasis-of-matter paragraph being added to the auditors’ reportC. an other-matter paragraph being added to the auditors’ reportD. shared responsibility opinionE. none of the above3. A disclaimer of opinion is a form of report in which auditors state that they _____.A. do not express an opinion on the financial statementsB. express an opinion on the financial statementsC. express an adverse opinion on the financial statementsD. express a modified opinion on the financial statementsE. none of the above4. An emphasis-of-matter paragraph is included when _____.A. the financial statements do not fairly present financial postion, results ofoperations, and net cash flows in conformity with GAAPB. there is a lack of consistent application of GAAPC. there is substantial doubt about an entity’s ability to continue as a going concernD. all of the aboveE. B or C, only5. Determining what is material involves _____ criteria.A. qualitativeB. quantitativeC. both A and BD. either A or B, but not bothE. neither A nor B6. Modified opinions include _____ opinions.A. adverseB. disclaimerC. qualifiedD. all of the aboveE. B and C, only7. An other-matter paragraph is a paragraph included in the auditors’ report that is _____.A. included at the auditors’ discretionB. required by GAAPC. required by GAASD. A or B, onlyE. A or C, only8. Pervasive is a term used in context of _____.A. anomaliesB. misstatementsC. qualificationsD. all of the aboveE. B or C, only9. A qualified opinion indicates that, except for the effects of some_____, the financialstatements are fairly presented.A. departures from GAAPB. limitations on the scope of the auditC. pervasive misstatementD. any of the aboveE. A or B, only10. Scope limitations may be imposed by _____.A. auditorsB. clientC. other circumstancesD. any of the aboveE. B or C, only11. The term standard report is _____.A. actively used in practiceB. no longer used in practiceC. no longer formally used in the AICPA’s standardsD. both A and C, onlyE. both B and C, only12. An unmodified opinion is expressed by the auditors when they conclude that the financial statements are prepared, _____, in accordance with the applicable financial reportingframework.A. in all respectsB. in all material respectsC. in all pervasive respectD. in no respectE. none of the above13. An accounting estimate is a transaction involving management’s _____.A. assumptionsB. estimatesC. guaranteesD. all of the aboveE. A or B, only14. A control deficiency is a weakness in the design or operation of a control that does notallow management or employees, in the normal course of performing their functions, to_____ misstatements on a timely basis.A. detectB. enhanceC. preventD. A or B, onlyE. A or C, only15. An example of a routine transaction is _____.A. a cash receipt or disbursementsB. payrollC. sale or purchaseD. all of the aboveE. A or C, only16. An integrated audit (under PCAOB Standard No. 5) is an audit that includes auditreports on both _____.A. a company’s internal control over financial reporting and the financial statementsB. compliance and operationsC. assurance services and trust servicesD. all of the aboveE. A or C, only17. A material weakness is considered is _____ severe to a significant deficiency.A. equallyB. lessC. moreD. A or B, onlyE. A or C, only18. The Sarbanes-Oxley Act of 2002 is an act passed by the U.S. Congress to protectinvestors from the possibility of fraudulent accounting activities by improving the _____of corporate disclosures.A. accuracyB. reliabilityC. usabilityD. all of the aboveE. A and B, only19. Assurance services are professional services that improve the _____ of information fordecision makers.A. contextB. qualityC. quantityD. A and/or B, onlyE. A and/or C, only20. An assertion is a _____ about whether subject matter is presented in accordance withcertain criteria.A. affirmationB. declarationC. proclamationD. verificationE. none of the above21. An examination of financial statements is referred to as a(n) _____.A. auditB. compilationC. reviewD. trust serviceE. all of the above22. A review is an engagement designed to provide a _____ degree of assurance about theconformance of subject matter, or an assertion about subject matter, with suitable criteria.A. highB. limitedC. lowD. moderateE. B or D, only23. Limited/negative assurance provides _____ less assurance than the reasonable assuranceprovided by an examination.A. minimallyB. moderatelyC. noD. substantiallyE. none of the above24. Prospective financial statements that present expected results, given one or morehypothetical assumptions are termed a financial _____.A. budgetB. forecastC. planD. projectionE. none of the above25. CPAs may _____ management’s discussion and analysis.A. compileB. examineC. reviewD. A or C, onlyE. B or C, only26. Trust services are engagements that provide assurances on _____.A. commercial banksB. fiduciary responsibilitiesC. internal controlD. systemsE. all of the above27. XBRL is an international information format designed specifically for _____information.A. assuranceB. auditC. businessD. corporateE. none of the above28. Internal auditing helps an organization accomplish its objectives by bringing asystematic, disciplined approach to evaluate and improve the effectiveness of _____.A. controlB. governance processesC. risk managementD. all of the aboveE. A and B, only29. Operational auditing is a process of reviewing an organization to measure the _____ ofoperations.A. economyB. effectivenessC. efficiencyD. all of the aboveE. B and C, only30. Compliance auditing is performing procedures to test compliance with _____.A. economy of operationsB. lawsC. regulationsD. all of the aboveE. B and/or C, only
