ACC 235 Chapter 1

29 cards

  


 
  
Created Jan 17, 2011
by
mhregan

 

 
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1
An assurance engagement would include
 
-Giving an opinion on a prize promoter’s claim about the amount of sweepstakes prizes awarded...
2
A determination of cost savings obtained by outsourcing cafeteria services is most likely...
 
operational auditing
3
The primary difference between operational auditing and financial auditing is that in operation...
 
the operational auditor is seeking to help management use resources in the most effective...
4
According to the AICPA, the purpose of an audit of financial statements is to
 
enhance the degree of confidence that intended users can place in the financial statements
5
Bankers who are processing loan applications from companies seeking large loans will probably...
 

they generally see a potential conflict of interest between company...

6
The Sarbanes-Oxley Act of 2002 prohibits public accounting firms from providing the following...
 
-Bookkeeping services
-Internal audit services
-Valuation services
7
Independent auditors of financial statements perform audits that reduce
 

information risk faced by investors

8
The primary objective of compliance auditing is to
 

determine whether auditee personnel are following laws, rules, regulations,...

9
These requirements are usually necessary to become licensed as a certified public accountant
 

-Successful completion of the Uniform CPA Examination

-

10
The objective in an auditor’s review of credit rating of a client’s customers is to obtain...
 
valuation and allocation
11
Someone verbally asserting that all expenses for the year have been recorded in the accounts...
 
not considered a sufficient basis for a CPA to conclude that all expenses have been recorded
12
The risk to investors that a company’s financial statements may be materially misleading...
 
information risk
13
When auditing merchandise inventory at year-end, the auditor performs audit procedures to...
 
cutoff management assertion
14
When auditing merchandise inventory at year-end, the auditor performs audit procedures to...
 
rights and obligation management assertion
15
When an auditor reviews additions to the equipment (fixed asset) account to make sure that...
 
existence
16
The Sarbanes-Oxley Act of 2002 generally prohibits public accounting firms from:
 
-acting in a managerial decision-making role for an audit client

-auditing...

17
Substantial equivalency refers to
 

permitting a CPA to practice in another state without having to obtain...

18
Reasons to obtain professional certification
 

-
19
Attest engagement
 
Providing an opinion on subject matter or an assertion about the subject matter that is the...
20
Attestation
 
The lending of credibility to assertions made by a third party
21
Auditing
 
A systematic process of objectively obtaining and evaluating evidence regarding assertions...
22
Business Risk
 
The probability an entity will fail to meet its objectives and, ultimately, fail
23
Cutoff (or cutoff date)
 
Refers to a date, normally the client’s year-end balance sheet date, around which transactions...
24
Financial reporting
 
Broad based process of providing statements of financial position (balance sheets), results...
25
Information risk
 

The probability that the information circulated by a company will...

26
Internal auditing
 
An assurance and consulting activity that provides management with information regarding...
27
Operational auditing
 

The study of business operations for the purpose of making recommendations...

28
Professional Skepticism
 

An auditor’s tendency not to believe management’s...

29
Substantial Equivalency
 

The process through which CPAs licensed in one state can practice...

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