Auditing Principles - Role Of Public Accountant

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  1. How does the role of the SEC differ from that of the AICPA
    SEC – establishes standards and regulations related to public companies. Oversight of PCAOB, protects investors

    AICPA – research and publication standards and publications for non-public companies
  2. List three of the more important responsibilities of a partner in a public accounting firm
    1 – Planning, supervision and execution of the audit

    2 – Maintaining primary contacts with clients

    3 – Recruiting new staff members

    and last stop for quality of work
  3. The Sarbanes-Oxley Act of 2002 created the Public Company Accounting Oversight Board. Explain the major responsibilities of this board
    Establish independence standards for auditors of public companies

    Establish auditing standards for audits of public companies

    Sanction registered audit firms

    Protect investors
  4. Which of the following best describes the relationship between assurance services and
    attest services
    Both attest and assurance services require independence
  5. Which of the following has primary responsibility for the fairness of
    the representations made in financial statements.
    Client’s management
  6. The most important benefit of having an annual audit by a public accounting firm is to
    Provide assurance to investors and other outsiders that the financial statements are reliable
  7. The Sarbanes-Oxley Act created the Public Company Accounting Oversight Board. Which of the following is not one of the responsibilities of that board.
    Review financial reports filed with the SEC
  8. Which of these organizations has the responsibility to perform inspections of auditors of public companies?
    PCAOB (public company accounting oversightboard)
  9. Governmental auditing, in addition to including audits of financial statements,
    often includes audits of efficiency, effectiveness and:
  10. In general, internal auditors’’ independence will be greatest when they report directly to the:
    Audit committee of the board of directors
  11. Which of the following did not precipitate the passage of the Sarbanes-Oxley Act of 2002 to regulate public accounting firms
    Ethic scandals at the AICPA
  12. What caused the passage of Sarbanes-Oxley
    • Disclosure related to accounting irregularities at Enron and WorldCom
    • Restatements of financial statements by a number of public companies
    • Conviction of the accounting firm of Arthur Anderson LLP
  13. Which of the following organizations establishes accounting standards for the U.S. government agencies?
    The Federal Accounting Standards Advisory Board
  14. Which of the following is correct about forensic audits?
    Forensic audits are usually performed in situations in which fraud has been found or is suspected
  15. What best describes the purpose of the auditors’ consideration of internal control in a financial statement audit for a nonpublic company.
    To determine the nature, timing and extent of audit testing
  16. Which of the following is an example of a compliance audit?
    An Audit of a company’s policies and procedures for adhering to environmental laws and regulations.
  17. 2 types of assurance services
    Increase reliability of info

    Put info into context that helps decision making
  18. Forms of Attestation
    Examination - High - Low - In our opinion

    Review - Moderate - Moderate - We are not aware

    Agreed Upon Services - Summary - Varies - Includes a summary
  19. Types of Risk
    Business - Survival and Profitability

    Information - Info used to asses business risk
  20. Types of Audits
    Financial - only by CPA - bal sheet etc.

    Compliance - rules - irs income tax

    Operational - not CPA - effect of operations

    Integrated - combination of both
  21. Types of Auditors


  22. IIA
    Institute of Internal Auditors
  23. GAO
    Government Accounting Office
  24. AICPA
    American Institute of CPA



    Continuing Education

    CPA Test
  25. FASB
    Sets GAAP for all except federal and state
  26. GASB
    State and local
  27. FASAB
    US Government
  28. PCAOB
    Public Accounting Oversight Board
  29. SEC
    Security Exchange Commission

    Protect Investors

    Registration Statements
  30. Structure of CPA firm
    Partners - overall responsibility

    Managers - supervise overall engagement

    Seniors - in charge of auditor on daily

    Staff - work under immediate supervision of senior
Card Set:
Auditing Principles - Role Of Public Accountant
2014-09-14 17:42:33
Auditing Principles Role Public Accountant

Auditing Principles - Role Of Public Accountant
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