ACCT 444 Week 1 Quiz
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Public companies<br />
Chapter 1<br />
Question 4. 4. (TCO 1) An operational audit has as one of its objectives to (Points : 3)<br />
make recommendations for improving performance.<br />
determine whether the financial statements fairly present the entity’s operations.<br />
evaluate the feasibility of attaining the entity’s operational objectives.<br />
report on the entity’s relative success in attaining profit maximization.<br />
Chapter 1<br />
Question 5. 5. (TCO 1) Which of the following services do not need to be preapproved by the<br />
audit committee of an issuer? (Points : 3)<br />
Nonaudit services related to internal control over financial reporting<br />
Tax services<br />
Nonaudit services that are less than 5 % of total revenues from the audit client<br />
Services provided by the auditor on a recurring basis<br />
Question 8. 8. (TCO 3) Several months after an unqualified audit report was issued, the auditor<br />
discovered the financial statements were materially misstated. The client’s CEO agrees that there<br />
are misstatements, but refuses to correct them. She claims that confidentiality prevents the CPA<br />
from informing anyone. (Points : 3)<br />
The CEO is incorrect, but because the audit report has been issued, it is too late.<br />
The CEO is correct and the auditor must maintain confidentiality.<br />
The CEO is correct, but to be ethically correct the auditor should violate the confidentiality rule<br />
and disclose the error.<br />
The CEO is incorrect, and the auditor has an obligation to issue a revised audit report, even if the<br />
CEO will not correct the financial statements.<br />
Chapter 4<br />
Question 9. 9. (TCO 1) Which of the following terms identifies a requirement for audit<br />
evidence? (Points : 3)
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