UARIZONA OMSA Audit EXAM 1 Review| 132 QUESTIONS| WITH COMPLETE SOLUTIONS
Which of the following groups is commonly thought of as a stakeholder in the
... [Show More] financial reporting process?
a) Investors
b) Banks
c) Labor Unions
d) Customers
e) All of the above
e) All of the above
What is an important way in which auditors help to enhance the credibility of financial reporting?
a) Performing consulting services for clients
b) Deterring errors in the financial statements
c) Obtaining negative assurance over the financial statements
d) Investing in their clients' stock
b) Deterring errors in the financial statements
Which of the following statements about audit quality is false?
a) It is difficult to measure audit quality
b) Audit firm culture is important for audit quality
c) In general, audit quality can be thought of as a dichotomy that is either "high" or "low"
d) Skills and qualities of the auditors is important for audit quality
e )None of the above (all of the above are true)
c) In general, audit quality can be thought of as a dichotomy that is either "high" or "low"
Which of the following statements about fraud is false?
a) Fraud is always intentional
b) An example of fraudulent misappropriation of assets is when managers attempt to make their company look better by overstating assets on the balance sheet
c) Prior to the early 2000s, auditors were not responsible for detecting fraud
d) The use of executive stock options is an example of the "incentives" component of the fraud triangle
e) None of the above (all of the above are true)
b) An example of fraudulent misappropriation of assets is when managers attempt to make their company look better by overstating assets on the balance sheet
Which of the following factors did not play a role in congress passing the Sarbanes Oxley Act of 2002?
a) Increased demand for accounting firms to provide consulting and other "value-added" services.
b) Collapse of the mortgage-back securities market caused several financial institutions, like Lehman Brothers, to go bankrupt.
c) Auditors failed to detect/prevent several major corporate frauds, like Enron and Worldcom,
d) All of the above played a role in congress passing the Sarbanes Oxley Act of 2002.
b) Collapse of the mortgage-back securities market caused several financial institutions, like Lehman [Show Less]