Practice Auditing Questions

1. Statement on Quality Control Standards No. 2 identifies certain quality control elements that should be considered when performing which types of services?
a. auditing, accounting, and review services
b. auditing, tax, and review services
c. accounting, tax, and review services
d. auditing, accounting, and tax services
e. auditing, tax, and consulting services

2. An auditor would be most likely to issue a "summary of findings" in connection with which one of the following types of services?
a. a financial statement audit
b. consulting services
c. an operational audit
d. a review
e. accounting services

3. Which one of the following services is often performed on public companies' interim financial statements and nonpublic companies' annual financial statements?
a. examination
b. accounting
c. auditing
d. review
e. Consulting

4. The statement that the reviewer "is not aware of any material modifications that should be made to the statements in order for them to be in conformity with GAAP" is known as:
a. reasonable assurance.
b. negligent performance.
c. negative assurance.
d. necessary ignorance.
e. positive assurance.

5. Compilation is an example of which one of the following types of services?
a. auditing
b. review
c. consulting
d. examination
e. Accounting

6. Which one of the following is not among the conditions that give rise to a demand by external users for independent audits of financial statements?
a. remoteness of users
b. complexity of subject matter
c. the securities acts, administered by the SEC
d. potential conflict of interest between users and preparers of the statements
e. consequence for making decisions

7. What level of assurance does the reader of a private company financial statement receive on the company's system of internal controls?
a. positive assurance
b. reasonable assurance
c. negative assurance
d. no assurance
e. limited assurance

8. How many different opinions must an auditor of a publicly held company issue?
a. 1
b. 2
c. 3
d. 4
e. 5

9. There are several paragraphs included in the auditor's standard report in internal control over financial reporting. Which paragraph defines internal control over financial reporting?
a. introductory paragraph
b. scope paragraph
c. inherent limitations paragraph
d. definition paragraph
e. explanatory paragraph

10. Statements on auditing standards (SAS's) are interpretations of?
a. generally accepted auditing standards
b. generally accepted accounting principles
c. generally accepted accounting policies
d. generally accepted auditing services
e. AICPA code of professional conduct

Solution Summary

A short sentence or two explains why each selection is made.