Auditing & Attestation Mini Exam 1 — AUD — Auditing & Attestation Mini Exams

Questions in this quiz (10)

1. Which of the following is a requirement for an auditor to maintain independence under GAAS?

   • The auditor must avoid all non-audit services
   • The auditor must be independent in fact and appearance
   • The auditor must rotate staff annually
   • The auditor must obtain written approval from regulators

2. According to PCAOB standards, which service would impair independence for a public company audit client?

   • Tax compliance services
   • Bookkeeping services
   • Audit committee communications
   • Risk assessment procedures

3. An auditor identifies a suspected fraud involving senior management. What is the auditor's initial responsibility?

   • Report directly to external regulators
   • Withdraw immediately
   • Communicate with those charged with governance
   • Issue a modified opinion

4. Which of the following is part of the audit risk model?

   • Detection risk
   • Business risk
   • Strategic risk
   • Operational risk

5. Under GAAS, what is the primary purpose of performing analytical procedures during planning?

   • To detect fraud directly
   • To assess risk of material misstatement
   • To test internal controls
   • To confirm account balances

6. Which statement best defines professional skepticism?

   • Assuming all management is dishonest
   • Accepting evidence without question
   • Maintaining a questioning mind and critical assessment
   • Relying only on prior experience

7. In audit planning, which factor most likely increases inherent risk?

   • Strong internal controls
   • Complex financial instruments
   • Stable operations
   • Experienced management

8. What is a key requirement before accepting an audit engagement?

   • Auditor must be a CPA firm partner
   • Auditor must confirm engagement preconditions
   • Auditor must review prior financial statements
   • Auditor must perform analytical procedures

9. Which relationship most likely impairs auditor independence?

   • Auditor's friend works in a non-financial role at client
   • Auditor owns shares in the client
   • Auditor has prior experience in the industry
   • Auditor communicates with management regularly

10. What is a key difference between AICPA and PCAOB audit documentation retention requirements?

    • AICPA: 3 years; PCAOB: 5 years
    • AICPA: 5 years; PCAOB: 7 years
    • AICPA: 7 years; PCAOB: 5 years
    • Both require 10 years