Auditing Quiz
Relevance is enhanced by an effective
Introduction to Auditing
_________1. The primary goal of the CPA in
performing the attest function is to
a. Assure the consistent application of
correct accounting procedures
b. Detect fraud
c. Determine whether the client’s
assertions are fairly stated
d. Examine individual transactions so that
the auditor may certify as to their
validity
_________2. Recording, classifying, and
summarizing economic events in a logical
manner for the purpose of providing financial
information for decision making is commonly
called
a. Finance
b. Auditing
c. Accounting
d. Economics
_________3. Any service that requires a CPA firm
to issue a report about the reliability of an
assertion that is made by another party is a(n):
a. Accounting and bookkeeping service
b. Attestation service
c. Assurance services
d. Tax service
_________4. 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. Information Systems Control
d. Internal Control
_________5. Which of the following statements
is not true regarding the competence of audit
evidence?
a. Validity is related to the quality of the
client’s information system
b. To be competent, evidence must be
both valid & relevant
c. Relevance must always relate to audit
objectives
d.
information system
_________6. A secondary objective of the
auditor’s study and evaluation of internal
control is that the study and evaluation provide
a. A basis for reducing the auditor’s
assessed level of control risk below the
maximum level
b. A basis for determination of the
resultant extent of the tests to which
auditing procedures are to be
restricted
c. A basis for constructive suggestions
concerning improvement in internal
control
d. An assurance that the records and
documents have been maintained in
accordance with existing company
policies and procedures
_________7. To become a CPA, an individual
must pass the Uniform CPA Exam and
a. Become a member of the PICPA
b. Comply with government education and
experience requirements
c. Demonstrate his or her independence
d. Obtain employment with a public
accounting firm
_________8. Statements of Audit Standards
a. Are intended to limit the degree of
auditor judgment needed to fulfil the
attest function
b. Describe procedures to be applied in
specific areas of audit activity to
eliminate inconsistencies in audit
practice
c. Interpret standards that provide
guidelines or measures of quality for an
independent audit
d. Requires filing requirement and
enforcement activities of the SEC
_________9. Which of the following types of
audits are most similar?
a. Compliance audits and independent
financial statement audits
b. Independent financial statement audits
and operational audits
c. Internal audits and independent
financial statement audits
 d. Operational audits and compliance
audits
_________10. The definition of auditing contained
within A Statement of Basic Auditing Concepts
recognizes that auditing includes both a(an)
a. Documentation processes and a
reporting process
b. Documentation processes and a
evaluation process
c. Evaluation processes and a reporting
process
d. investigative processes and a reporting
process
_________11. Three common types of attestation
services are:
a. Audits, reviews, and “other” attestation
services
b. Audits, verifications, and “other”
attestation services
c. Reviews, verifications, and “other”
attestation services
d. Audits, reviews, and verifications
_________12. An audit of historical financial
statements is most often performed to
determine whether:
a. Organization is operating efficiently and
effectively.
b. Entity is following specific procedures or
rules set down by some higher
authority
c. Management team is fulfilling its
fiduciary responsibilities to
shareholders
d. None of the choices
_________13. To present fairly in conformity with
generally accepted accounting principles, the
financial statements must:
a. Be considered preferable to the users of
those financial statements
b. Be consistently applied
c. Inform users of all matters that could
materially affect a decision
d. Reflect transactions and events within a
range of reasonable limits
_________14. An audit performed in accordance
with generally accepted auditing standards
generally should:
a. Be expected to provide not absolute
assurance that illegal acts will be
detected where internal control is
effective
b. Not be relied upon to provide absolute
assurance that all illegal acts will be
detected
c. Encompass a plan to actively search for
all illegalities which relate to operating
suspects
d. Be relied upon to disclose violations of
truth in lending laws
_________15. Which of the following is not
required by the generally accepted auditing
standard that states that due professional care
is to be exercised in the performance of the
audit?
a. Critical review of the audit work
performed at every level of supervision
b. Observance of the standards of field
work and reporting
c. Responsibility for losses because of
errors of judgment
d. Degree of skill commonly possessed by
others in the profession
_________16. Which of the following statements
best describes the primary purpose of
Statements of Auditing Standards?
a. They are authoritative statements,
enforced through the Code of
Professional Conduct
b. They are guides intended to set forth
auditing procedures which are
applicable to a variety of situations
c. They are interpretations which may be
useful guidance to auditors
d. They are procedural outlines which are
intended to narrow the areas of
inconsistency and divergence of auditor
opinion
_________17. Within the context of quality
control, the primary purpose of continuing
professional education and training activities is
to enable a CPA firm to provide personnel
within the firm with:
a. Knowledge required in order to perform
a peer review
b. Knowledge required to fulfill assigned
responsibilities and to progress within
the firm
 c. Professional education that is required
in order to perform with due
professional care
d. Technical training that assures
proficiency as an auditor
_________18. Which of the following services
provides the lowest level of assurance on a
financial statement?
a. A review
b. An audit
c. Neither service provides assurance on
financial statements
d. Each service provides the same level of
assurance on financial statements
_________19. Which of the following is not
included in a review engagement of a non-
public entity?
a. A study and evaluation of internal
control
b. Any procedures designed to identify
relationships among data that appear to
be unusual
c. Inquiries of management
d. Inquiries regarding events subsequent
to the balance sheet date
_________20. Auditing is based on the assumption
that financial data and statements are
a. Consistently applied
b. In conformity with an acceptable
financial reporting frameworks such as
PSA/PFRS
c. Presented fairly
d. Verifiable
_________21. Which of the following is not an
example of an error?
a. Client personnel alter accounting
records from which financial statements
are prepared
b. Client personnel make mistakes in
gathering or processing accounting
from which financial statements are
prepared
c. Client personnel make mistakes in the
application of accounting principles
d. Client personnel overlook or
misinterpret facts, causing accounting
estimates to be incorrect
_________22. Which statement is/are correct
regarding the pronouncements of AASC?
I. The exposure period allowed for
each exposure draft of a
standard or statement to be
considered by the organizations
and persons to whom it is sent
for comment is generally 90
days
II. Each final standard,
interpretation and statement
shall be submitted to the PCR
through the BOA for approval
after which the
pronouncements become
operative from the effective
date stated therein
III. Practice Statements will have the
same authority as the
Engagement Standards
a. I and II only
b. II and III only
c. I and III only
d. I, II and III
_________23. Which statement is/are correct
regarding the pronouncements of AASC?
I. In exceptional circumstances,
an auditor may judge it
necessary to depart from PSA in
order to more effectively
achieve the objective of an
audit. When such situation
arises, the auditor is required to
justify the departure
II. PSAs