Auditing & Attestation Mini Exam 2 — AUD — Auditing & Attestation Mini Exams

Questions in this quiz (10)

1. When evaluating a new audit client, which factor indicates potential integrity issues?

   • Strong internal controls
   • Frequent changes in auditors
   • High profitability
   • Large market share

2. Which of the following does NOT mitigate threats to independence?

   • Independent audit committee oversight
   • Partner rotation
   • Providing prohibited non-audit services
   • External peer review

3. Under PCAOB standards, what is required for audits of public companies?

   • Only analytical procedures
   • Testing internal controls over financial reporting
   • No need for documentation
   • Only management inquiry

4. What is the auditor's responsibility regarding fraud?

   • Detect all fraud
   • Design procedures to detect material fraud
   • Prevent fraud
   • Report all fraud externally

5. Which engagement is considered an attest engagement?

   • Compilation
   • Review of financial statements
   • Tax preparation
   • Consulting services

6. Which of the following is a principle of the AICPA Code of Professional Conduct?

   • Due Care
   • Profit Maximization
   • Efficiency
   • Regulation

7. What is required for accepting a review engagement?

   • Client must have an audit committee
   • Auditor must be independent
   • Client must be public
   • Auditor must test controls

8. How is 'due professional care' best described?

   • Eliminating all audit risk
   • Acting with reasonable care and diligence
   • Following only management instructions
   • Maximizing audit efficiency

9. Under GAAS, what must the auditor's report include?

   • Scope of the audit
   • Reference to financial reporting framework
   • Statement of independence
   • All of the above

10. Which of the following represents a threat to auditor independence?

    • Self-review threat
    • Familiarity threat
    • Advocacy threat
    • All of the above