![]() ![]() Acceptance and continuance of client relationships and specific engagements.ĭ. D A requirement that working papers be reviewed by the supervisor, and any deficiencies be discussed with the preparer is an example of a quality control procedure in the area of:Ī. A Which of the following is not one of the six elements of AICPA quality control?ĭ. That no illegal acts have been identified. That accounting principles have been consistently applied.ĭ. Any weakness in internal control observed by the auditors.Ĭ. That the audit was made in accordance with auditing standards generally accepted in the United States of America.ī. A The auditors' report for a nonpublic company should indicate:Ī. Neither, other accounting literature must be consulted to determine the appropriate accounting treatment. Both are of equal authority and the form of the transaction prevails over its substance.ĭ. Neither C When a conflict exists between an accounting principle supported by a pronouncement of an authoritative body and an accounting principle supported by widely recognized practice, which standard prevails?Ĭ. A Primary responsibility for the financial statements lies with:ĭ. A The first paragraph of the standard unqualified audit report is referred to as the:ĭ. Auditors cannot reasonably estimate the effect of the illegal act on the financial statements. Illegal act has received widespread publicity.ĭ. Illegal act has material financial statement implications.Ĭ. Management fails to take appropriate corrective action.ī. B The auditors who find that the client has committed an illegal act would be most likely to withdraw from the engagement when the:Ī. The auditors' responsibility for the detection of all illegal acts is the same as their responsibility regarding material misstatements due to errors and fraud. If the auditors suspect illegal acts have been performed, they should conduct a legal audit of the company.ĭ. If audit procedures reveal illegal acts, the auditors should take appropriate actions.Ĭ. The auditors have a responsibility to discover all material illegal acts.ī. Neither B Which of the following best describes a portion of the auditors' responsibility regarding illegal acts by clients?Ī. B An unconditional responsibility to follow an AICPA professional standard exists when the professional standard uses the term(s)ĭ. May choose to change responsibilities relating to various professional standards that remain under consideration. Should consider whether to follow the advice based on the exercise of professional judgment in the circumstances.ĭ. Must comply with requirements unless the auditor demonstrates and documents that alternative actions were sufficient to achieve the objectives of the standards.Ĭ. Must fulfill the responsibilities under all circumstances.ī. D When a Statement Auditing Standards uses the word "should" relating to a requirement, it means that the auditor:Ī. Exercise due professional care in the performance of the examination and the preparation of the report. Not accept as audit clients companies which compete directly with one another.ĭ. Follow accounting principles adopted by the SEC.Ĭ. Assume responsibility for any losses to the client from fraud which existed during the audit but was not detected by the auditors.ī. A The generally accepted auditing standards adopted by the AICPA include a requirement that the CPAs:Ī. Be set forth in a Financial Reporting Release issued by the SEC.ĭ. Be covered in one or more of the SASs issued by the AICPA.Ĭ. Have substantial authoritative support.ī. Appears in the opinion paragraph of the auditors' report To qualify as "generally accepted," an accounting principle must:Ī. Appears in the opinion paragraph of the auditors' report.ĭ. ![]() Appears in the introductory paragraph of the auditors' report.Ĭ. Appears in both the scope paragraph and the opinion paragraph of the auditors' report.ī. C In an audit opinion on financial statements, the expression "accounting principles generally accepted in the USA":Ī. Errors, fraud, and those illegal acts with a direct effect on financial statement amounts.ĭ. An audit should be designed to achieve reasonable assurance of detecting material misstatements due toĬ. ![]()
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