Questions and Answers on Auditing
ch02
Student:
1. Auditors may be independent in fact but not independent in appearance.
True False
2. Auditing Standards issued by the PCAOB are the sole source of guidance for audits of public entities.
True False
3. Attestation standards provide guidance for a wide variety of engagements different in scope than an audit.
True False
4. Generally accepted auditing standards must be followed on all audit engagements.
True False
5. The reporting principle relates to a firm's system of quality control criteria for conducting an audit.
True False
6. Auditors cannot effectively satisfy the responsibilities principle requiring due care if they have not also satisfied the performance principle.
True False
7. Substantive procedures performed by the audit team are most closely related to the risk of material misstatement.
True False
8. Auditing procedures are the same as auditing standards.
True False
9. The concept of due care reflects the need to plan and perform the audit with an appropriate level of professional skepticism.
True False
10. Under the performance principle, auditors are required to provide absolute assurance that the client's financial statements do not contain material misstatements.
True False
11. The performance principle sets forth the quality criteria for conducting an audit.
True False
12. Auditors of public entities registered with the Securities and Exchange Commission are required to register with the Public Company Accounting Oversight Board.
True False
13. Control risk is the probability that a material misstatement (error or fraud) could occur and not be prevented or detected on a timely basis by the auditors' substantive procedures.
True False
14. The word appropriateness refers to the number of transactions or components of an account balance examined by auditors.
True False
15. To be considered material, an item must be one that would influence the decision of financial
Student:
1. Auditors may be independent in fact but not independent in appearance.
True False
2. Auditing Standards issued by the PCAOB are the sole source of guidance for audits of public entities.
True False
3. Attestation standards provide guidance for a wide variety of engagements different in scope than an audit.
True False
4. Generally accepted auditing standards must be followed on all audit engagements.
True False
5. The reporting principle relates to a firm's system of quality control criteria for conducting an audit.
True False
6. Auditors cannot effectively satisfy the responsibilities principle requiring due care if they have not also satisfied the performance principle.
True False
7. Substantive procedures performed by the audit team are most closely related to the risk of material misstatement.
True False
8. Auditing procedures are the same as auditing standards.
True False
9. The concept of due care reflects the need to plan and perform the audit with an appropriate level of professional skepticism.
True False
10. Under the performance principle, auditors are required to provide absolute assurance that the client's financial statements do not contain material misstatements.
True False
11. The performance principle sets forth the quality criteria for conducting an audit.
True False
12. Auditors of public entities registered with the Securities and Exchange Commission are required to register with the Public Company Accounting Oversight Board.
True False
13. Control risk is the probability that a material misstatement (error or fraud) could occur and not be prevented or detected on a timely basis by the auditors' substantive procedures.
True False
14. The word appropriateness refers to the number of transactions or components of an account balance examined by auditors.
True False
15. To be considered material, an item must be one that would influence the decision of financial