For more course tutorials visit www.newtonhelp.com 1.Developing an understanding of the client's business and industry is essential to proficiency as discussed in the general standards of GAAS. (Points: 4)

1. ACC 562 Final Exam Guide
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1.Developing an understanding of the client's business and industry is
essential to proficiency as discussed in the general standards of GAAS.
(Points: 4)
True
False
2. Ratio analysis only involves a year-to-year comparison of account
balances. (Points: 4)
True
False
3. Control is considered to be part of corporate governance. (Points: 4)
True
False
4. When control risk is assessed at a maximum level, the auditor
assumes that the internal controls are reliable in preventing or
detecting material misstatements. (Points: 4)

2. True
False
5. Accounting subsystems are accounting cycles composed of one or
more accounting applications. (Points: 4)
True
False
6. Presentation and disclosure assertions imply that all transactions and
balances are properly presented, disclosures represent what actually
happened, and the footnote disclosures are appropriate and adequate.
(Points: 4)
True
False
7. Vouching recorded transactions involves taking a sample from the
journal and tracing them back to the source documents to ensure they
occurred. (Points: 4)
True
False
8. Audit documentation serves as support for the financial statements.
(Points: 4)
True
False

3. 9. In analysis of the results of audit sampling, an auditor may determine
that the sample size must be increased. (Points: 4)
True
False
10. The revenue cycle considered by auditors includes the sales process
but not collections. (Points: 4)
True
False
11. Inventory is complex and typically considered a high-risk area in
audits of service firms. (Points: 4)
True
False
12. An auditor can utilize a cross-sectional analysis for a client operating
in multiple locations to identify areas of further inventory testing.
(Points: 4)
True
False
13. Legal expenses are reviewed by auditors for possible litigation and
related FAS 5 treatment. (Points: 4)
True
False
True

4. complete and contain all-important financial disclosures, be free
from material misstatements and be presented fairly according to
GAAP.
complete, be accurate and be presented fairly according to GAAP.
complete and contain all-important financial disclosures, be free
from all misstatements and be presented fairly according to the
substance of GAAP.
23. Which one of the following is not a provider of assurance services?
(Points: 4)
CPAs
internal auditors
governmental auditors
AICPA
24. The primary governing board that performs quality reviews on
registered CPA firms that audit public companies is the (Points: 4)
PCAOB
GAO
AICPA
FASB
Reading the terms of the arrangements with vendors for disclosure.
review procedures for identifying and investing excess funds
shares exist and have valid stock certificates.

5. proceeds have been properly distributed between common stock
and additional paid-in capital.
dividends have been issued in accordance with the stock indenture
agreement as approved by the board.
shareholders actually have the rights to shares issued by the
company in exchange for subscribed funds.
67. Which of the following is a tool that is best used by the audit team
to determine if the client has included all disclosures? (Points: 4)
Management representation letter.
GAAS.
Inquiry of the CFO.
Checklists.
68. The auditor is responsible for evaluating the likelihood of a client
continuing as a going concern for a reasonable period of time. A
reasonable period of time is (Points: 4)
one year from the audit report date.
one year from the last day of field work.
one year from the balance sheet date.
two years from the balance sheet date.
69. Rock School, Inc. has a matter of material litigation that is
threatened, but that has not gone to trial. The auditor's consideration
of such a matter will most likely include all of the following except
(Points: 4)

6. sending a letter to the client's attorneys for more information
discussions of the matter with the client and the client's insurance
adjuster.
confirmation with the harmed party regarding the amount that will
be claimed.
assessment of proper accrual or disclosure by the client in
accordance with SFAS No. 5.
70. When the financial statements contain a material departure from
GAAP that the auditor believes is justified, justification (Points: 4)
should appear in a footnote.
should appear in a paragraph added before the scope paragraph.
should appear in the opening paragraph.
should appear in a paragraph added before the opinion paragraph.
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ACC 562 Midterm Exam Guide
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Question 1
CPAs are licensed by the

7. Question 2
The Certified Internal Auditor program is administered by the
Question 3
The objective of an operational audit is to
Question 4
As it relates to an audit, materiality is
Question 5
Independent professional services that are provided on financial
or other information that improve the quality of decision making are
known as
Question 6
An expectation of the public is that the auditor will recognize
that the primary users of audit assurance are
Question 7
The primary governing board that performs quality reviews on
registered CPA firms that audit public companies is the
Question 8
An audit which has as its purpose the evaluation of the economy
and efficiency with which resources are employed is known as a(n)
Question 9

8. Management of a company is responsible for
Question 10
The audit agency for the U. S. Congress is the
Question 11
An audit committee must be comprised of outside directors and
at least one outside financial expert. Which of the following is
considered an outside director?
Question 12
A proper system of corporate governance is one that demands
Question 13
Section 304 of the Sarbanes-Oxley Act requires executives to
forfeit any bonus or incentive-based pay or profits (including stock
options) from the sale of stock received in the twelve months prior to
an earnings restatement. This is often referred to as:
Question 14
Which one of the following will provide auditing standards of
public companies?
Question 15
The responsibility for operating an enterprise is delegated to the:
Question 16
The Sarbanes-Oxley Act of 2002 requires which of the following?

9. Question 17
The audit client of the CPA firm is:
Question 18
The Public Company Accounting Oversight Board was established
by:
Question 19
Audit committees are required to have what person in its
composition?
Question 20
Corporate governance is a process by which the owners and
creditors of an organization
Question 21
In determining the types of activities, engagements and
interactions an auditor should have with a client, the CPA and the audit
firm must do which of the following?
Question 22
Independence is not required for which of the following types of
services?
Question 23
The AICPA Principles of Professional Conduct include which of
the following?
Question 24

10. An auditor that has an attitude that includes a questioning mind
and a critical assessment of audit evidence is considered which of the
following?
Question 25
A CPA firm is considered independent when it performs which of
the following services for a publicly traded audit client?
Question 26
Information about a client that cannot be subpoenaed by a court
of law is referred to as what type of information?
Question 27
Members of the AICPA are required to act with integrity and
objectivity for which of the following engagements?
Question 28
Which one of the following is an example of a conflict of interest
for a CPA?
Question 29
A CPA may only practice public accounting in which of the
following forms?
Question 30
Which of the following describes a situation in which moral
duties or obligations conflict and one action is not necessarily the
correct action?
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11. ACC 562 Week 1 DQs
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Analyze the need for unbiased financial reporting. Based on your
analysis, determine at least two (2) drivers that may cause financial
reporting to be biased. Provide a rationale to support your response.
Analyze the audit opinion formulation process and suggest at least one
(1) improvement to the process to strengthen audit opinions. Provide a
rationale to support your suggestion.
===============================================
ACC 562 Week 2 DQs
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Analyze the changes made to corporate governance rules since the
implementation of the Sarbanes–Oxley Act of 2002. Based on your
analysis, formulate an opinion on whether or not these changes are

12. sufficient in preventing financial fraud. Provide a rationale for your
response.
Debate it! Audit committees are an effective tool for detecting and
preventing fraud. Provide a rationale for your response.
===============================================
ACC 562 Week 3 Assignment 1 Madoff Securities (2 Papers)
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Determine the regulatory oversight that was in place while the Ponzi
scheme was operating, and speculate on the main reasons why they did
not discover the scheme.
Assume you are an auditor for a firm that had $10 million dollars
invested in Madoff Securities.
Determine the fundamental audit procedures that you should have
applied to this investment.
Predict the way in which a peer review of Friehling and Horowitz would
have uncovered the scheme related to Madoff Securities.
Pretend you are Harry Markopolos and suggest one (1) strategy,
different from that of the case study, to expose the potential fraud.
Provide a rationale to support the suggestion.

13. Analyze the role of the audit committee for Madoff Securities in regard
to the discovery of Ponzi scheme, and suggest one (1) action the audit
committee could have taken in order to prevent or detect the fraud.
Provide a rationale to support the suggestion
===============================================
ACC 562 Week 3 DQs
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From the case study, use the ethical framework to propose a course of
action that you would take concerning the audit. Provide a rationale for
your response.
Imagine that you work for an audit firm and the firm selected you to
assess its auditor independence and the potential threats to the firm.
Determine at least two (2) potential threats to auditor independence
and recommend one (1) strategy for the firm to eliminate or mitigate
those threats you determined.
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ACC 562 Week 4 DQs

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From the first e-Activity, determine at least two (2) AICPA Professional
Conduct principles that are most likely to be violated. Provide a
rationale to support your response.
•From the second e-Activity, recommend at least two (2) additional
responsibilities that the audit committee should take in order to
improve its effectiveness in detecting or preventing financial fraud.
Provide a rationale to support your recommendation.
===============================================
ACC 562 Week 5 DQs
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Imagine you work for an auditing firm. Your most recent task is to
determine whether or not your firm should bid to perform the auditing
services of a public company. Determine the fundamental kind of
information that you need in order to make an informed decision as to
whether or not to bid on the audit. Provide a rationale to support your
response.

15. From the case study, analyze the key risk areas associated with an audit
of Lincoln Federal Savings and Loan. Next, recommend at least two (2)
risk areas that should be included in the audit plan. Provide a rationale
to support your recommendation
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ACC 562 Week 6 DQs
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From the e-Activity, support or critique the idea that the Committee of
Sponsoring Organization of the Treadway Commission (COSO)
transition would strengthen internal controls over financial reporting in
publicly traded companies. Provide a rationale to support your
response.
From the case study, determine the fundamental control deficiencies
associated with the credit function. Next, propose at least one (1)
control improvement that the credit department management could
make in the process. Provide a rationale to support your response.
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ACC 562 Week 7 Assignment 2 Cardillo Travel Systems,
Inc. (2 Papers)

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Review the Cardillo Travel Systems case, located in Chapter 6 of your
textbook.
Write a four to five (4-5) page paper in which you:
Explain the Securities and Exchange Commission’s rationale to charge
Cardillo executives with each of the following violations:
a. making false representations to outside auditors
b. failing to maintain accurate financial records
c. failing to file prompt financial reports with the SEC
d. violating the insider trading provisions of the federal securities laws
Determine who was in violation or compliance of the AICPA’s Code of
Professional Conduct in this case study and analyze the key reasons
why they were or were not in compliance. Provide support for the
rationale.
Analyze the actions taken by Cardillo’s outside auditors and evaluate
the level of efficiency of the audit risk management in this case study.
Provide support for the rationale.

17. Determine whether or not the five (5) components of internal control
were being followed. Support the response with at least two (2)
examples.
Create an argument for or against whether auditors have a
responsibility to assess the judgment of the decisions made by
Cardillo’s management. Support the argument.
Use at least two (2) quality academic resources in this assignment.
Note: Wikipedia and similar type Websites do not qualify as academic
resources.
Your assignment must follow these formatting requirements:
· Be typed, double spaced, using Times New Roman font (size 12), with
one-inch margins on all sides; citations and references must follow APA
or school-specific format. Check with your professor for any additional
instructions.
· Include a cover page containing the title of the assignment, the
student’s name, the professor’s name, the course title, and the date.
The cover page and the reference page are not included in the required
assignment page length.
===============================================
ACC 562 Week 7 DQs
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18. From the e-Activity, determine the main reasons why several members
of top management in Phar-Mor perpetrated the financial statement
fraud. Next, recommend one (1) strategy that the auditors might have
taken to detect or prevent the fraud. Provide a rationale to support
your recommendation.
From the case study, analyze the financial data as presented. Next,
choose at least one (1) pattern within the data that appears to be
inconsistent, and propose one (1) strategy that one could use to audit
this pattern. Provide a rationale to support your response
===============================================
ACC 562 Week 8 DQs
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From the e-Activity, analyze the auditor’s responsibility to determine if
a company can continue as a going concern. From your analysis,
propose at least two (2) key factors that the auditor should consider
when determining an entity’s ability to continue as a going concern.
Provide a rationale to support your proposal.
From the case study, analyze the inquiry letter sent by C.R. Brown.
Next, determine at least one (1) omission that you believe occurred

19. within the letter, and suggest one (1) way to improve the letter so that
Consolidate d’s outside attorney may corroborate the information in
the case. Provide a rationale to support your response
===============================================
ACC 562 Week 9 DQs
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From the case study, determine the main potential ethical dilemmas.
Next, use the seven (7) steps in the ethical decision-making framework
to recommend one (1) course of action you would take in order to
avoid the ethical dilemmas. Provide a rationale to support your
recommendation.
1. Identify the ethical issue
2. Determine who are the affected parties and identify their rights
3. Determine the most important rights
4. Develop alternative courses of action
5. Determine the likely consequences of each proposed course of
action
6. Assess the possible consequences including an estimation of the
greatest good for the greatest number

20. From the case study, based on your recommendation in Part I of this
discussion, suggest one (1) strategy that would support you making the
right decision without undermining the manager’s confidence in your
problem-solving ability in a difficult situation. Provide a rationale to
support your response.
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ACC 562 Week 10 Assignment 3 Freescale Semiconductors,
Inc (2 PPT)
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Review the Freescale Semiconductor case, located in Chapter 9 of your
textbook.
Prepare a twelve to twenty (12-20) slide PowerPoint presentation with
speaker notes in which you:
1. Give your opinion as to whether or not additional laws and harsher
penalties on financial fraud can eliminate or mitigate financial fraud.
Support the rationale.
2. Suggest three (3) new strategies that you believe the government
can implement to eliminate or mitigate insider trading. Provide a
rationale to support the suggestion.

21. 3. In this case study, leaked merger and acquisition information was
used to enable the fraud. Determine the key internal controls needed
over the communication of confidential information to outside parties,
and analyze the manner in which these controls act as a deterrent to
fraudulent activities.
4. Pretend you are Donna Murdoch in this case study and propose an
alternative plan to act on the leaked information. Next, recommend
one (1) strategy to communicate the alternative plan and determine
whom the plan should be communicated with. Justify the response.
5. In this case study, E&Y was providing a consulting service to The
Blackstone Group related to its planned acquisition of Freescale
Semiconductor. Compare and contrast the different auditor’s
professional responsibilities between consulting engagements and
audit engagements.
6. Take a position on whether more legislative and / or regulatory
agency oversight will increase or decrease corporate fraud. Provide a
rationale to support the position.
7. Use at least two (2) quality academic resources in this assignment.
Note: Wikipedia and similar type Websites do not qualify as academic
resources.
Your assignment must follow these formatting requirements:
Apply APA standards to citation of sources
No more than four (4) bullets per slide
No more than six (6) words per bullet

22. Headings – Times New Roman Font – 36 Points
Bullets – Times New Roman Font – 24 Points
Add bulleted speakers notes
Include a cover page containing the title of the assignment, the
student’s name, the professor’s name, the course title, and the date.
===============================================
ACC 562 Week 10 DQs
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From the case study, evaluate the quality of REDTOP’s internal audit
function. Based on your evaluation, recommend at least two (2)
changes that you would make in order to improve the quality of
REDTOP’s internal audit function. Provide a rationale to support your
response.
From the case study, give your opinion as to whether or not your
external audit engagement team could use REDTOP’s internal audit
function in another fashion, as opposed to merely relying on existing
internal audits in order to perform the overall audit of REDTOP Sports
Company. Recommend one (1) alternative to using the work that the
internal audit has already yielded as part of your external audit. Provide
a rationale to support your response.

23. ===============================================
ACC 562 Week 11 DQs
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Discuss one (1) way in which you anticipate using what you have
learned from this course in your current or future career. Provide one
(1) specific example to support your response.
Speculate on one (1) specific auditing area presented in this course that
you believe may be eliminated, added, or changed in the next ten (10)
years. Provide a rationale to support your response.
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