Comprehensive Review in Accounting

19880 Words80 Pages
|AUDITING THEORY |
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|Comprehensive Reviewer |
|Preliminary Grading Period |

SET 1
1. An independent financial statement audit is important to financial statements users because it: a. Objectively examines
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c. Not independent and, therefore, may not be associated with the financial statements. d. Not independent and, therefore, may issue a review report, but may not issue an auditor 's opinion.

11. Solicitation consists of the various means that CPA firms use to engage new clients. Which one-of the following would not be an example of solicitation? a. Advertisements in the yellow pages of a phone book. b. Accepting new clients that approach the firm. c. Taking prospective clients to lunch. d. Offering seminars on current tax law changes to potential clients.

12. Which of the following activities is not prohibited for the CPA firm 's attestation service clients? a. Referral fees on audit jobs. b. Competitive bidding on audit jobs. c. Contingent fees on audit jobs. d. Commissions for obtaining client services on audit jobs.

13. Family and personal relationships between a member of the assurance team and a director, an officer or certain employees, depending on their role, of the assurance client, least likely create a. Self-review threat. b. Self-interest threat. c. Intimidation threat. d. Familiarity threat.

14. A director, an officer or an employee of the assurance client in a position to exert direct and significant influence over the subject matter of the assurance engagement has been a member of the assurance team or partner of the firm. This situation least likely
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