_ | Questions > Multiple Choice Questions: Choose the best response A.Which of the following best describes why an independent auditor is asked to express an opinion on the fair presentation of financial statements? 1. It is difficult to prepare financial statements that fairly present a company’s financial position. operations, and cash flows without the expertise of an independent auditor. 2. It is management's responsibility to seek available independent aid in the appraisal of the financial information shown in its financial statements. 3. The opinion of an independent party is needed 4, It is a customary courtesy that all stockholders of ‘Scanned with CamScanneri on a company receive an independent report . ae e management’ stewardship of the affairs of th business. B. Independent auditing can best be described as 1. A branch of accounting. soa aisciptine thatattets to) the results of 3. A professional activity that measures and communicates financial and business data. 4. A regulatory function that prevents the issuance of improper financial information. C. Which of the following attributes is likely to be unique to the audit work of CPAs as compared to the work performed by practitioners of other profession: 1. Due professional care. 2. Competence: ‘Scanned with CamScanner4. Complex body of knowledge. D. Compliance auditing often extends beyond audits leading to the expression of opinions on the fairness of financial presentation and includes audits of efficiency. economy. effectiveness. as well as 1. Accuracy. 2. Evaluation. 4. Internal control In a financial statement audit, the auditor obtains a asonable level of assurance about whether the financial statements are free of materials misstatement in order to express an opinion. In order to obtain reasonable assurance, the auditor must 1. Have prior experience in the industry in which the audi Mt Operates, ‘Scanned with CamScanneramine all documents available that support the financial statements. sy obi Suicient audit evidence 4. Test controls around significant transaction cycles. + True or False Questions 1. The criteria by which an auditor evaluates the information under audit may vary with the information being audited. B. False 2. The riteria used by an external auditor to evaluate published financial” statements are known as generally accepted auditing standards (a AA))\ A. True ,AAAY {Soi 3. GRA finns are never: i 3. CPA firms are never allowed to provide bookkeeping, servic ss “or clients ‘Scanned with CamScannerA. True 4. Most public companies’ audited financial statements \) are available on the SEC's EDGAR database. A. True B. False 5. The primary purpose of a compliance audit is to determine whether the financial statements are prepared in compliance with generally accepted 44 ‘Scanned with CamScannerAn auditor must be competent and have independent mental attitude B. False ‘Scanned with CamScanner