Question 1 1. The American Institute of Certified Public Accountants (AICPA), the Public Company Accounting Oversight Board (PCAOB), and the International Auditing and Assurance Standards Board (IAASB) have a common goal to: Verify that the financial statements are free from material errors. Verify that the financial statements are free from all errors. Provide financial information to disinterested third parties. Provide assurance to the public that audits are conducted in a professional manner. 5 points Question 2 1. How many countries rely on the standards issued by the International Auditing and Assurance Standards Board? 25 Over 100 Only the European countries. The twelve countries in North America. 5 points Question 3 1. Which phase of the audit formulation process contains management's assertions of rights and obligations for their manufacturing facilities? Phase I Phase II Phase III Phase V 5 points Question 4 1. All of the following requirements became mandatory when Congress passed the Sarbanes-Oxley Act of 2002, except: Companies are required to establish an independent audit committee. Prohibition on consulting work that auditors can perform for their audit clients. Mandatory rotation every five years of the partner in charge of the audit engagement. Creation of the Committee of Sponsoring Organizations (COSO) to oversee companies who do business on the New York Stock exchange (NYSE). 5 points Question 5 1. The following individual is responsible for overseeing the day-to-day activities on a specific audit: Partner Senior Manager Supervisor 5 points Question 6 1. The second principle of performance developed by the AICPA requires the auditor to do all of the following during an audit except: Obtain absolute assurance as to whether the financial statements are free from material misstatements. Determine materiality levels. Identify risks of material misstatement. Implement appropriate audit responses to assessed risks. 5 points Question 7 1. The board of directors' primary objective for the shareholders is to: Compile financial statements for submission to the Securities and Exchange Commission (SEC) Supervise the activities of the internal auditors. Build long-term sustainable growth in shareholder value. Evaluate potential external auditing companies to select for the annual audit. 5 points Question 8 1. One of the most significant provisions of the Sarbanes/Oxley Act of 2002 was: The mandatory requirement to compile financial statements in accordance with the standards provided by the Public Companies Accounting Oversight Board (PCAOB). Establishment of the American Institute of Certified Public Accountants (AICPA) and their Code of Conduct. Specifies the education and experience requirements for all members on the board of directors. Requires the CEO and CFO to certify their company's financial statements. 5 points Question 9 1. Which of the follow ...

1. Question 1
1. The American Institute of Certified Public Accountants
(AICPA), the Public Company Accounting Oversight Board
(PCAOB), and the International Auditing and Assurance
Standards Board (IAASB) have a common goal to:
Verify that the financial statements are free from material
errors.
Verify that the financial statements are free from all errors.
Provide financial information to disinterested third parties.
Provide assurance to the public that audits are conducted in a
professional manner.
5 points
Question 2
1. How many countries rely on the standards issued by the
International Auditing and Assurance Standards Board?
25
Over 100
Only the European countries.

2. The twelve countries in North America.
5 points
Question 3
1. Which phase of the audit formulation process contains
management's assertions of rights and obligations for their
manufacturing facilities?
Phase I
Phase II
Phase III
Phase V
5 points
Question 4
1. All of the following requirements became mandatory when
Congress passed the Sarbanes-Oxley Act of 2002, except:
Companies are required to establish an independent audit
committee.
Prohibition on consulting work that auditors can perform for
their audit clients.
Mandatory rotation every five years of the partner in charge of
the audit engagement.

3. Creation of the Committee of Sponsoring Organizations (COSO)
to oversee companies who do business on the New York Stock
exchange (NYSE).
5 points
Question 5
1. The following individual is responsible for overseeing the
day-to-day activities on a specific audit:
Partner
Senior
Manager
Supervisor
5 points
Question 6
1. The second principle of performance developed by the
AICPA requires the auditor to do all of the following during an
audit except:
Obtain absolute assurance as to whether the financial statements
are free from material misstatements.
Determine materiality levels.
Identify risks of material misstatement.

4. Implement appropriate audit responses to assessed risks.
5 points
Question 7
1. The board of directors' primary objective for the shareholders
is to:
Compile financial statements for submission to the Securities
and Exchange Commission (SEC)
Supervise the activities of the internal auditors.
Build long-term sustainable growth in shareholder value.
Evaluate potential external auditing companies to select for the
annual audit.
5 points
Question 8
1. One of the most significant provisions of the Sarbanes/Oxley
Act of 2002 was:
The mandatory requirement to compile financial statements in
accordance with the standards provided by the Public
Companies Accounting Oversight Board (PCAOB).
Establishment of the American Institute of Certified Public
Accountants (AICPA) and their Code of Conduct.
Specifies the education and experience requirements for all
members on the board of directors.

5. Requires the CEO and CFO to certify their company's financial
statements.
5 points
Question 9
1. Which of the following statements is not one of the roles of
the audit committee?
Oversees the accounting and financial reporting process and the
financial statement audits.
Establishes a whistleblower program.
Appoint, compensate, and oversees the external auditor.
Set the budget for the internal audit activities.
5 points
Question 10
1. According to the AICPA's ethical standards, an auditor would
be considered independent in which of the following instances?
The auditor has an automobile loan from a client bank.
The auditor is also an attorney who advises the client as its
general counsel.
An employee of the auditor donates service as treasurer to a
charitable organization that is a client.

6. The client owes the auditor fees for two consecutive annual
audits.
5 points
Question 11
1. Which of the following statements best explains why the CPA
profession has found it essential to promulgate ethical standards
and to extablish means for ensuring their observance?
Vigorous enforcement of an established code of ethics is the
best way to prevent unscrupulous acts.
Ethical standards that emphasize excellence in performance
over material rewards establish a reputation for competence and
character.
A distinguishing mark of a profession is its acceptance of
responsibility to the public.
A requirement for a profession is to establish ethical standards
that stress primarily a responsibility to clients and colleagues.
5 points
Question 12
1. Which of the following is not a major threat to an auditor's
independence?
Audit partner's compensation based on obtaining and retaining
clients.

7. Becoming too friendly with client's management.
Significant time pressures to get the audit done quickly.
Auditing records maintained by the public accounting firm.
All the above are threats.
5 points
Question 13
1. Professional skepticism includes being alert to the following:
Audit evidence that contradicts other audit evidence obtained.
Information that brings into question the reliability of
documents and responses to inquiries to be used as audit
evidence.
Conditions that may indicate possible fraud.
Circumstances that suggest the need for audit procedures in
addition to those required by professional standards.
All the above.
(f.): Only (b.) and (d.).
5 points
Question 14

8. 1. Manny Talents is a CPA and a lawyer. In which of the
following situations is Tallents violating the AICPA's Rules of
Conduct?
He defends his audit client in a patent infringement suit.
He uses his legal training to help determine the accounting
implications of a complicated contract of an audit client.
He uses his legal training to help determine the legality of an
audit client's actions.
He researches a tax question to help the client make a
management decision.
5 points
Question 15
1. A violation of the profession's ethical standards would most
likely have occurred when a CPA:
Whose name is Smith formed a partnership with two other CPAs
and uses Smith and Co. as the firm name.
Issued an unqualified opinion on the 2010 financial statements
when fees for the 2009 audit were unpaid.
Purchased a bookkeeping firm's practice of monthly write-ups
for a percentage of fees received over a three-year period.

9. Made arrangements with a bank to collect notes issued by a
client in payment of fees due.
5 points
Question 16
1. Which of the following nonaudit services does the SEC
prohibit audit firms from providing to its publicly-traded
clients?
Bookkeeping or other services related to the accounting records
or financial statements of the audit client.
Financial information systems design and implementation.
Appraisal and valuation services, fairness opinions, or
contribution-in-kind reports.
Actuarial services.
All the above.
5 points
Question 17
1. Applying utilitarianism as a concept in addressing ethical
situations requires the auditor to perform all of the following
except:
Choose the alternative that provides either the greatest good for
the greatest number or the lowest cost (from a social view) for
the greatest number.

10. Examine the potential outcomes to see whether the results are
inconsistent with the rights or justice theories
Determine the effect of the potential alternative courses of
action on the affected parties.
Identify the potential stakeholders that will be affected by the
alternative outcomes.
5 points
Question 18
1. A CPA is permitted to disclose confidential client
information without consent of the client to:
I. Another CPA who has purchased the CPA's tax service.
II. Another CPA firm if the information concerns suspected tax
return irregularities.
III. A state CPA society's voluntary quality-control review
board.
I and II
II
II and III
III
Sheet1JOB Order Costing and Relative Value UnitsU2
Reference Lab must calculate the relative value and cost per
procedure given thatthe total lab expense is

11. $943,241:ProjectedProcedureVolumeLab
ExpenseA35000.15B22000.20C43000.10D29000.05E27000.15F
35500.25G20000.10Part 1: Calculate the Relative Value
UnitsProcedureABCDEFGPart 2: Calculate total Relative Value
UnitsProcedureABCDEFGPart 3: Calculate the cost per
procedureProcedureABCDEFG
Sheet2
Sheet3
1. Which phase of the audit formulation process contains
management's assertions of rights and obligations for their
manufacturing facilities Phase I Phase II Phase III Phase V
QUESTION 1
The American Institute of Certified Public
Accountants (AICPA), the Public Company
Accounting Oversight Board (PCAOB), and the
International Auditing and Assurance Standards
Board (IAASB) have a common goal to:
1.
Verify that the financial statements are free from material
errors.
Verify that the financial statements are free from all errors.
Provide financial information to disinterested third parties.
Provide assurance to the public that audits are conducted in a
professional
manner.
QUESTION 2
5 points
How many countries rely on the standards
issued by the International Auditing and Assurance
Standards Board?
1.

12. 25
Over 100
Only the European countries.
The twelve countries in North America.
5 points
QUESTION 3
Which phase of the audit formulation process
contains management's assertions of rights and
obligations for their manufacturing facilities?
1.
Phase I
Phase II
Phase III
Phase V
QUESTION 4
5 points
All of the following requirements became
mandatory when Congress passed the Sarbanes
Oxley Act of 2002, except:
1.
Companies are required to establish an independent audit
committee.
Prohibition on consulting work that auditors can perform for
their audit
clients.
Mandatory rotation every five years of the partner in charge of
the audit
engagement.
Creation of the Committee of Sponsoring Organizations (COSO)

13. to
oversee companies who do business on the New York Stock
exchange
(NYSE).
5 points
QUESTION 5
The following individual is responsible for
overseeing the daytoday activities on a specific
audit:
1.
Partner
Senior
Manager
Superviso
r
5 points
QUESTION 6
The second principle of performance
developed by the AICPA requires the auditor to do
all of the following during an audit except:
1.
Obtain absolute assurance as to whether the financial statements
are free
from material misstatements.
Determine materiality levels.
Identify risks of material misstatement.
Implement appropriate audit responses to assessed risks.
5 points

14. QUESTION 7
The board of directors' primary objective for
the shareholders is to:
1.
Compile financial statements for submission to the Securities
and
Exchange Commission (SEC)
Supervise the activities of the internal auditors.
Build longterm sustainable growth in shareholder value.
Evaluate potential external auditing companies to select for the
annual
audit.
5 points
QUESTION 8
One of the most significant provisions of the
Sarbanes/Oxley Act of 2002 was:
1.
The mandatory requirement to compile financial statements in
accordance
with the standards provided by the Public Companies
Accounting
Oversight Board (PCAOB).
Establishment of the American Institute of Certified Public
Accountants
(AICPA) and their Code of Conduct.
Specifies the education and experience requirements for all
members on
the board of directors.
Requires the CEO and CFO to certify their company's financial

15. statements.
QUESTION 9
5 points
Which of the following statements is not one
of the roles of the audit committee?
1.
Oversees the accounting and financial reporting process and the
financial
statement audits.
Establishes a whistleblower program.
Appoint, compensate, and oversees the external auditor.
Set the budget for the internal audit activities.
5 points
QUESTION 10
According to the AICPA's ethical standards,
an auditor would be considered independent in
which of the following instances?
1.
The auditor has an automobile loan from a client bank.
The auditor is also an attorney who advises the client as its
general
counsel.
An employee of the auditor donates service as treasurer to a
charitable
organization that is a client.
The client owes the auditor fees for two consecutive annual
audits.
QUESTION 11

16. 5 points
Which of the following statements best
explains why the CPA profession has found it
essential to promulgate ethical standards and to
extablish means for ensuring their observance?
1.
Vigorous enforcement of an established code of ethics is the
best way to
prevent unscrupulous acts.
Ethical standards that emphasize excellence in performance
over material
rewards establish a reputation for competence and character.
A distinguishing mark of a profession is its acceptance of
responsibility to
the public.
A requirement for a profession is to establish ethical standards
that stress
primarily a responsibility to clients and colleagues.
QUESTION 12
5 points
Which of the following is not a major threat to
an auditor's independence?
1.
Audit partner's compensation based on obtaining and retaining
clients.
Becoming too friendly with client's management.
Significant time pressures to get the audit done quickly.
Auditing records maintained by the public accounting firm.
All the above are threats.

17. 5 points
QUESTION 13
Professional skepticism includes being alert to
the following:
1.
Audit evidence that contradicts other audit evidence obtained.
Information that brings into question the reliability of
documents and
responses to inquiries to be used as audit evidence.
Conditions that may indicate possible fraud.
Circumstances that suggest the need for audit procedures in
addition to
those required by professional standards.
All the above.
(f.): Only (b.) and (d.).
5 points
QUESTION 14
Manny Talents is a CPA and a lawyer. In
which of the following situations is Tallents
violating the AICPA's Rules of Conduct?
1.
He defends his audit client in a patent infringement suit.
He uses his legal training to help determine the accounting
implications of
a complicated contract of an audit client.
He uses his legal training to help determine the legality of an
audit client's
actions.
He researches a tax question to help the client make a
management

18. decision.
5 points
QUESTION 15
A violation of the profession's ethical
standards would most likely have occurred when a
CPA:
1.
Whose name is Smith formed a partnership with two other CPAs
and uses
Smith and Co. as the firm name.
Issued an unqualified opinion on the 2010 financial statements
when fees
for the 2009 audit were unpaid.
Purchased a bookkeeping firm's practice of monthly writeups
for a
percentage of fees received over a threeyear period.
Made arrangements with a bank to collect notes issued by a
client in
payment of fees due.
QUESTION 16
5 points
Which of the following nonaudit services does
the SEC prohibit audit firms from providing to its
publiclytraded clients?
1.
Bookkeeping or other services related to the accounting records
or
financial statements of the audit client.
Financial information systems design and implementation.

19. Appraisal and valuation services, fairness opinions, or
contributionin
kind reports.
Actuarial services.
All the above.
5 points
QUESTION 17
Applying utilitarianism as a concept in
addressing ethical situations requires the auditor to
perform all of the following except:
1.
Choose the alternative that provides either the greatest good for
the
greatest number or the lowest cost (from a social view) for the
greatest
number.
Examine the potential outcomes to see whether the results are
inconsistent
with the rights or justice theories
Determine the effect of the potential alternative courses of
action on the
affected parties.
Identify the potential stakeholders that will be affected by the
alternative
outcomes.
5 points
QUESTION 18
A CPA is permitted to disclose confidential
client information without consent of the client to:
1.

20. I. Another CPA who has purchased the CPA's tax
service.
II. Another CPA firm if the information concerns
suspected tax return irregularities.
III. A state CPA society's voluntary qualitycontrol
review board.
I and II
II
II and III
III