When a CPA firm completes an audit of a nonpublic business and issues a report, does
it express an opinion on the client’s accounting records, financial statements,
Only financial statements. Per GAAS
What is a material amount from the perspective of auditors? Give an example of how that
may differ based on the nature of the item
Sufficiently important to influence decisions made by reasonable users of financial statements
What are the duties and responsibilities of the Public Company Accounting Oversight
Registration of public accounting firms that audit public companies
Conduct inspections of public company practice of registered public
Establishing ethical and professional standards
Which of the following organizations can revoke the right of an individual to practice as a CPA?
The applicable state board of accountancy
The AICPA over time has played an important role in standards setting.
Which of the following standards are currently established by the AICPA?
Auditing standards applicable to audits ofnonpublic companies
Which of the following does the FASB consider a source of non-authoritative guidance for use when there is no authoritative guidance available?
FASB concepts statements
Financial statements audits performed under PCAOB requirements are designed to provide which types of assurance with respect the detection of material misstatements due to errors or fraud?
Reasonable (Yes) Absolute (No)
A basic objective of a CPA firm is to provide professional services
that conform with professional standards. Reasonable assurance of achieving
this basic objective is provide through:
A system of quality control
Which of the following is not explicitly included in a standard report
for a nonpublic company?
The internal control of the client was satisfactory
What is explicitly included in a standard report for a nonpublic company?
The CPA’s opinion that the financial statements comply with GAAP
An identification of the financial statements audited
That GAAP standards were followed during audit
The general group of the 10 PCAOB Auditing Standards requires that:
Auditors maintain an independent attitude
Which AICPA quality control standard would most likely be satisfied
when a CPA firm maintains records indicating which partners or employees of the
firm were previously employed by the CPA firm’s clients?
Relevant ethical requirements
An audit provides reasonable assurance of detecting material:
Fraudulent financial reporting (YES) Misappropriation of Assets (YES)
Which of the following is not included in an integrated audit report on
the financial statements of a public company?
The report states that the audit was performed in accordance with AICPAstandards
Included in an integrated audit report on the financial statements of a
Report indicates that the financial statements are the responsibility of management
Report indicates that the auditors have also audited the effectiveness of the company’s internal control
Report is signed in the name of the CPA firm
Audit firms that are subject to inspections by the PCAOB staff include
Audit firms that are registered with the PCAOB
Which of the following is not a difference noted when comparing the
AICAP audit report to the international audit report?
The international audit report includes an opinion of internal control
Generally accepted auditing standards
Purpose of audit
Premise of audit
Personal responsibility of auditor
Auditor actions in performing audit
Reporting results of audit
Provide an opinion on financial statements
Client prepares fin statements and provide auditor with needed info
Appropriate competence and capabilities and professional skepticism
obtain reasonable assurance that stmnts are free from error or fraud