Quiz: CPA Exam - AUD - Short Quiz

• 1.Which of the following is an attestation engagement?

  • A.Management advisory service
  • B.Tax return preparation
  • C.Compilation of the financial statements
  • D.Examination of prospective financial information

• 2.The Sarbanes-Oxley Act requires:

  • A.All public companies to define adequate internal controls
  • B.The auditor of public companies to design effective ICFR
  • C.All public companies to issue an internal control report
  • D.All of the above

• 3.Which of the following is an effect of the Sarbanes-Oxley Act of 2002?

  • A.Eliminate SEC involvement with the sales of securities
  • B.Reduce the accounting profession’s level of self regulation
  • C.Require periodic peer reviews of large CPA firms performed by the General Accounting Office
  • D.Reduce the circumstances in which one may file securities with the SEC

• 4.To succeed in an action against the auditor, the client must be able to show that:

  • A.There is a close causal connection between the auditor’s behavior and the damages suffered by the client
  • B.The auditor was grossly negligent
  • C.The auditor was fraudulent
  • D.There was a written contract

• 5.Which of the following underlies the application of generally accepted auditing standards, particularly the standards of fieldwork and reporting?

  • A.The element of internal control
  • B.The element of corroborating evidence
  • C.The element of materiality and relative risk
  • D.The element of reasonable assurance