Auditing, Attestation, and Assurance

1. The single feature that most clearly distinguishes auditing, attestation, and assurance is
a. Type of service.
b. Training required to perform the service.
c. Scope of services.
d. CPA’s approach to the service.

ANSWER: C

2. The primary goal of the CPA in performing the attest function is to

a. Detect fraud.
b. Examine individual transactions so that the auditor may certify as to their validity.
c. Determine whether the client's assertions are fairly stated.
d. Assure the consistent application of correct accounting procedures.

ANSWER: C

3. Internal auditing often extends beyond examinations leading to the expression of an opinion
on the fairness of financial presentation and includes audits of efficiency, effectiveness,
and
a. Internal control.
b. Evaluation.
c. Accuracy.
d. Compliance.

ANSWER: D

Which of the following best describes the operational audit?

a. It requires the constant review by internal auditors of the administrative controls
as they relate to operations of the company.
b. It concentrates on implementing financial and accounting control in a newly organized
company.
c. It attempts and is designed to verify the fair presentation of a company's results of
operations.
d. It concentrates on seeking out aspects of operations in which waste would be reduced by
the introduction of controls.

ANSWER: D

The auditor's judgment concerning the overall fairness of

the presentation of financial position, results of
operations, and changes in financial position is applied
 within the framework of
a. Generally accepted accounting principles.
b. Generally accepted auditing standards.
c. Internal control.
d. Information systems control.

ANSWER: A

6. Which of the following is not considered an assertion as formulated by the Auditing Standards
Board?
Valuation or allocation.
Mathematical accuracy.
Rights and obligations.
Presentation and disclosure.

ANSWER: B

Which of the following is not a distinguishing feature of

risk-based auditing?
Identifying areas posing the highest risk of financial statement errors.
Analysis of internal control.
Collecting and evaluating evidence.
Concentrating audit resources in those areas presenting the highest risk of financial statement
errors.

ANSWER: C

8. To maximize independence, the director of internal auditing should report to the

a. Audit committee.
b. Controller. c. Chief financial officer.
d. Director of information systems.

ANSWER: A

The auditor communicates the results of his or her work

through the medium of the
Engagement letter.
Management letter.
Audit report.
Financial statements.

ANSWER: C

10. The best description of the scope of internal auditing is that it encompasses
Primarily operational auditing.
Both financial and operational auditing.
Primarily the safeguarding of assets and verifying the existence of such assets.
Primarily financial auditing.

ANSWER: B