Chapter 8 Auditing

Question 1

The process for determining the accuracy and the totality of financial information

Answer 1

Auditing

Question 2

What is the Audit process guided by

Answer 2

Generally Accepted Auditing Principles

Question 3

External Auditing Financial Statement is required by

Answer 3

SEC for all publicly traded companies

Question 4

Whose responsibility is the financial statement audit

Answer 4

management

Question 5

Requirement for CPA

Answer 5

150 hours of education(30 in acct and 24 in busn) Taie Uniform exam

Question 6

Criteria for selection of external auditor

Answer 6

1. CPA 2. Registration with PCAOB.

Question 7

What should a financial statement be generally free of

Answer 7

Material Misstatement

Question 8

The auditor prepares two audit opinions at the end of an audit

Answer 8

One on the financial statement and one in the internal controls

Question 9

What three types of opinion will an auditor have on a statement

Answer 9

qualified , unqualified, adverse. Unqualified is best

Question 10

Three major sections of an audit report

Answer 10

opinion, basis of opinion, and critical audit matters.

Question 11

What are the two reasons we implement internal controls

Answer 11

Enhancing reliability and responsibility, and safeguarding assets

Question 12

documents for internal control

Answer 12

purchase order, invoice,

Question 13

what do audits of physical assets look for

Answer 13

cash, inventory, fixed assets

Question 15

Focus on financial reports

Answer 15

SOC report type 1

Question 16

Reports that focus on security, processing integrity, and confidentiality.

Answer 16

SOC Report type 2

Question 17

These reports focus on internal reports rather than financial accounting

Answer 17

System and Organizational report