Chapter 2 SB HW Flashcards
An independent, objective assurance and consulting activity designed to add value and improve an organization’s operations is the definition of ______ auditing.
internal
True or false: External auditors conduct financial statement audits, but only internal auditors conduct compliance, operational, and fraud audits.
False
Businesses obtain capital through ______.
borrowing and soliciting investments
Which act regulates ongoing reporting by companies whose companies securities are listed and traded on a stock exchange or that possess assets greater than $10 million and its equity securities are held by 500 or more persons?
Securities Exchange Act of 1934
What are auditors specially trained in detecting, investigating, and deterring white-collar crime are called?
Fraud auditors
An audit of internal control is ______ for private entities.
available but not required
Assertions companies make about sustainability have led to a promising new area of ______
services for auditors.
attest
Auditing and attestation are specialized forms of the general category of what kind of services?
Assurance services
Which act prohibits external auditors from providing many forms of nonaudit services and consulting work to public companies for which the auditor also provides a financial statement audit?
The Sarbanes-Oxley Act of 2002
Who is responsible for ensuring the audit is properly planned and conducted in accordance with applicable auditing standards?
Partner
Who is responsible for preparing adequate and appropriate documentation of completed work?
Associate/staff
Who is responsible for reviewing the work papers, FS, and audit report?
Manager
Who is responsible for assigning tasks to associates and directing the day-to-day performance of the audit?
Senior/in-charge
The international financial crisis of 2007–2009 led to the passage of what act?
Dodd-frank act
What did the Dodd-frank act do?
Amended the authority of PCAOB in regard to foreign audit firms that practice in the US.
Which organizations work closely with the SEC when formulating accounting and auditing standards?
- FASB
- PCAOB
Organizations design and implement ___________ systems to capture the details of transactions involved in each business process.
accounting information
The PCAOB conducts a program of regular inspections to assess the degree of compliance of registered accounting firms with the rules and professional standards of the ______(3 parts).
- SEC
- SOX of 2002
- PCAOB
What are the 4 main standards produced by the AICPA standing committees?
- Attestation standards
- Code of professional conduct
- Comp and review standards
- Quality control and peer review
The AICPA just completed a project to converge its ASB’s with the standards of ______ as much as possible.
IAASB
When a “material corporate event” occurs, the SEC requires a publicly traded company to file a(n) ______.
8K
The PCAOB is overseen by who?
SEC
The PCAOB can impose ______ for rule violations.
sanctions
Which organization issues International Standards on Auditing (ISA) and is the predominantly recognized international auditing standards setter outside the United States?
IAASB
The FASB’s Accounting Standards Codification (ASC) is recognized as the source of U.S. GAAP by the ______.
AICPA, PCAOB, SEC
The international counterpart to the FASB is the _____.
IASB
The SOX Act of 2002 transferred authority for standard setting, inspection, investigation, and enforcement for public company audits from the profession to the ______.
PCAOB
