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LOURDES COLLEGE 8.

The auditor’s judgement concerning the entity’s


operations (or the criteria used) in an operational audit
Quiz No. 1 should be based on
AUDIT THEORY (Acctg 13) a) GAAP

b) Effectiveness and Efficiency


1. Assurance services least likely involve___ c) Rules and Regulations
a) Improving the quality of information for decision d) Company policies
purposes.
9. To provide for the greatest degree of independence in
b) Improving the quality of the decision model used. performing internal auditing functions, an internal
c) Improving the relevance of the information. auditor most likely should report to the

d) Implementing a system that improves the a) Financial VP


processing of information. b) Corporate controller
2. Attestation is any service that requires a CPA firm to c) Those charged with governance
issue a report about the reliability of an assertion that
is made by another party. Which of the following d) Corporate stockholders
elements is the critical component that distinguishes
an attest engagement from other forms of assurance 10. To pass the CPA Licensure Examination, one must have
engagements. atleast an average rate of ______ and no grade below ____

a) An accountable party a) 70% - 60% c) 75% - 60%

b) A written assertion b) 75% - 65% d) 70% - 65%

c) A subject matter

d) An accountability relationship “Behind the hills of sacrifices, there’s a valley of success.”

3. The following are assurance engagements, except FIGHTING! :)

a) Reasonable assurance engagements KJB17

b) Other assurance engagements

c) Review engagements

d) Tax services

4. Unlike consulting services, assurance services

a) Make recommendations to management

b) Report on how to use information

c) Report on the quality of information

d) Are two-party contracts

5. The decision as to whether the criteria are suitable


involves considering whether the subject matter is
capable of reasonably consistent evaluation against or
for determining whether criteria are suitable include
the following, except

a) Relevance c) Reliability
Quiz No. 1 Answer Key
b) Understandability d) Sufficiency

6. Auditing is a system process that includes all for the


1. D
following except:
2. B
a) Communicating results to users
3. D
b) Obtaining and evaluating evidence
4. C
c) Providing important managerial decisions for a
client 5. D
d) Comparing evidence regarding assertions to 6. C
certain established criteria
7. A
7. The objective of this audit is to evaluate the fairness of
presentation of financial statements. 8. B

a) FS Audit 9. C

b) Operational Audit 10. B

c) Compliance Audit