Auditing And Assurance Services Quiz: Trivia!

33 Questions | Total Attempts: 5196

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Auditing And Assurance Services Quiz: Trivia!

What do you know about auditing and assurances? Assurance service is an individual professional service, typically offered by chartered or certified public accountants or chartered certified accountants, to advance information so that those in charge can see that decisions can be made with more consideration. Assurance services deliver independent and professional opinions that lessen information risk. Good luck testing your knowledge about auditing and assurance services.


Questions and Answers
  • 1. 
    Compliance audits evaluate the efficiency and effectiveness of any part of an organization's operating procedures and methods.
    • A. 

      True

    • B. 

      False

  • 2. 
    A CPA firm that provides accounting, tax and consulting services to a client is said to be providing assurance services to the client.
    • A. 

      True

    • B. 

      False

  • 3. 
    When conducting a financial statement audit, an auditor need not verify that the financial statements are in accordance with specified criteria.
    • A. 

      True

    • B. 

      False

  • 4. 
    The distinguishing factor between an external and internal auditor is independence.
    • A. 

      True

    • B. 

      False

  • 5. 
    In addition to having an understanding of accounting, an auditor should possess knowledge in the accumulation and interpretation of audit evidence.
    • A. 

      True

    • B. 

      False

  • 6. 
    An auditor's independence is a critical component in the audit of a company's financial statements.
    • A. 

      True

    • B. 

      False

  • 7. 
    Operational audits generally have been conducted by internal auditors and governmental audit agencies, but may be performed by certified public accountants. A primary purpose of an operational audit is to provide
    • A. 

      A means of assurance that internal controls are functioning as planned.

    • B. 

      Aid to the independent auditor, who is conducting the audit of the financial statements.

    • C. 

      The results of internal examinations of financial and accounting matters to a company's top-level management.

    • D. 

      A measure of management performance in meeting organizational goals.

  • 8. 
    An attestation engagement is one in which a CPA is engaged to
    • A. 

      Issue a written communication expressing a conclusion about the reliability of a written assertion that is the responsibility of another party.

    • B. 

      Provide tax advice or prepare a tax return based on financial information the CPA has not audited or reviewed.

    • C. 

      Testify as an expert witness in accounting, auditing, or tax matters, given certain stipulated facts.

    • D. 

      Assemble prospective financial statements based on the assumptions of the entity's management without expressing any assurance.

  • 9. 
    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

  • 10. 
    In the audit of historical financial statements, which of the following accounting bases is the most common?
    • A. 

      Regulatory accounting principles.

    • B. 

      Cash basis of accounting.

    • C. 

      Generally accepted accounting principles.

    • D. 

      Liquidation basis of accounting.

  • 11. 
    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 service.

    • D. 

      Tax service.

  • 12. 
    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.

  • 13. 
    The organization that is responsible for providing oversight for auditors of public companies is called the ________.
    • A. 

      Auditing Standards Board.

    • B. 

      American Institute of Certified Public Accountants.

    • C. 

      Public Oversight Board.

    • D. 

      Public Company Accounting Oversight Board.

  • 14. 
    Providing quantitative information that management and others can use to make decisions is the function of:.
    • A. 

      Management information systems

    • B. 

      Auditing

    • C. 

      Finance

    • D. 

      Accounting

  • 15. 
    An operational audit has as one of its objectives to:
    • A. 

      Determine whether the financial statements fairly present the entity’s operations.

    • B. 

      Evaluate the feasibility of attaining the entity’s operational objectives.

    • C. 

      Make recommendations for improving performance.

    • D. 

      Report on the entity’s relative success in attaining profit maximization.

  • 16. 
    An audit of historical financial statements is most often performed to determine whether the:
    • 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 these choices.

  • 17. 
    An examination of part of an organization’s procedures and methods for the purpose of evaluating efficiency and effectiveness is what type of audit?
    • A. 

      Operational audit.

    • B. 

      Compliance audit.

    • C. 

      Financial statement audit.

    • D. 

      Production audit.

  • 18. 
    An audit to determine whether an entity is following specific procedures or rules set down by some higher authority is classified as a(n):
    • A. 

      Audit of financial statements.

    • B. 

      Compliance audit.

    • C. 

      Operational audit.

    • D. 

      Production audit.

  • 19. 
    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.

  • 20. 
    In “auditing” financial accounting data, the primary concern is with:
    • A. 

      Determining whether recorded information properly reflects the economic events that occurred during the accounting period.

    • B. 

      Determining if fraud has occurred.

    • C. 

      Determining if taxable income has been calculated correctly.

    • D. 

      Analyzing the financial information to be sure that it complies with government requirements.

  • 21. 
    Which of the following is not a Trust Services principle as defined by the AICPA or CICA?
    • A. 

      Online privacy.

    • B. 

      Availability.

    • C. 

      Processing integrity.

    • D. 

      Operational integrity.

  • 22. 
    Which one of the following is more difficult to evaluate objectively?
    • A. 

      Presentation of financial statements in accordance with generally accepted accounting principles.

    • B. 

      Compliance with government regulations.

    • C. 

      Efficiency and effectiveness of operations.

    • D. 

      All three of the above are equally difficult.

  • 23. 
    The Sarbanes-Oxley Act prohibits a CPA firm that audits a public company from providing which of the following types of services to that company?
    • A. 

      Reviews of quarterly financial statements.

    • B. 

      Preparation of corporate tax returns.

    • C. 

      Most consulting services.

    • D. 

      Tax services.

  • 24. 
    Which of the following audits can be regarded as generally being a compliance audit?
    • A. 

      IRS agents’ examinations of taxpayer returns.

    • B. 

      GAO auditor’s evaluation of the computer operations of governmental units.

    • C. 

      An internal auditor’s review of a company’s payroll authorization procedures.

    • D. 

      A CPA firm’s audit of the local school district.

  • 25. 
    The trait that distinguishes auditors from accountants is the:
    • A. 

      Auditor’s ability to interpret accounting principles generally accepted in the United States.

    • B. 

      Auditor’s education beyond the Bachelor’s degree.

    • C. 

      Auditor’s ability to interpret FASB Statements.

    • D. 

      Auditor’s accumulation and interpretation of evidence related to a company’s financial statements.

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