Chapter 1: Auditing: Integral to the Economy

46. Which
the following is not a reason for a public company to receive an audit?
A. Potential bias in providing information.
B. Closeness between a user and the organization.
C. Complexity of the processing systems.
D. Remoteness between a user and the organization.

47. What
is the term used to describe a systematic process of objectively obtaining
evidence regarding assertions about economic actions and events to ascertain
the degree of correspondence between those assertions and established criteria
and communicating the results to interested users?
A. Internal audit.
B. Financial audit.
C. External audit.
D. Integrated audit

48. An
Integrated Audit Report provides opinion(s) on which of the following?
A. The financial statements.
B. Internal controls.
C. Both financial statements and internal controls.
D. Neither financial statements or internal controls.

49. Which
one of the following is not a key attribute needed to perform an
audit?
A. Subject matter knowledge.
B. Independence.
C. Established criteria or standards.
D. Accounting skills.

50. What
should internal controls be design to do?
A. Detect errors.
B. Detect and prevent errors.
C. Prevent errors.
D. Eliminate the possibility of fraud.

51. Which
one of the following is not an example of an independence
violation?
A. Audit partner’s spouse is the CFO at a client.
B. Audit firm accepts money for conducting the audit.
C. Auditors owning a small amount of stock in a client.
D. Providing investment tips to friends about clients.

52. Who
are the users of the financial statements?
A. Management.
B. Auditors.
C. Taxing Authorities.
D. Both A and C.