Multiple choice review.
1. When a financial statement auditor cannot determine if financial statements were prepared according to GAAP, the auditor issues a(n):
a. Qualified opinion.
b. Adverse opinion.
c. Disclaimer of opinion.
d. Exception report.
2. A SAS 70 audit is otherwise known as a(n):
a. Service organization audit.
b. Auxiliary audit.
c. Qualified audit.
d. Operational audit.
3. Generally accepted auditing standards are divided into three groups. Which of the following correctly pairs a group with a standard?
a. General, supervision
b. Field work, independence
c. Reporting, disclosure
d. All of the above.
4. Which of the following steps in a financial statement audit normally occurs first?
a. Assess management’s integrity.
b. Review the internal control system.
c. Perform compliance testing.
d. Evaluate management’s credentials.
5. A company’s financial statements implicitly involve several assertions by management that must be evaluated as part of auditing. Those assertions include: (i) existence or occurrence, (ii) completeness, (iii) ethical preparation.
a. i and ii only
b. i and iii only
c. ii and iii only
d. i, ii, and iii
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