6.4   Questions

1) Audits confirm the validity and reliability of accounting information.

2) Employees conduct external audits of a business.

3) Generally Accepted Auditing Standards are developed by the Securities and Exchange Commission.

4) Certified Public Accountants perform external audits of a company to confirm that the financial statements are fairly presented according to GAAP.

5) The agency that requires financial audits of publicly traded companies is the:

A) Financial Accounting Standards Board.

B) Securities and Exchange Commission.

C) Federal Government.

D) Internal Revenue Service.

6) The audit opinion that all companies try to achieve is a(n):

A) disclaimer of opinion.

B) qualified opinion.

C) adverse opinion.

D) unqualified opinion.

7) An audit opinion in which there are material misstatements in the financial statements is the:

A) disclaimer of opinion.

B) qualified opinion.

C) adverse opinion.

D) unqualified opinion.

8) An audit opinion in which the financial statements are fairly presented without exception is the:

A) disclaimer of opinion.

B) qualified opinion.

C) adverse opinion.

D) unqualified opinion.

9) An audit opinion in which the auditors are unable to express an opinion is the:

A) disclaimer of opinion.

B) qualified opinion.

C) adverse opinion.

D) unqualified opinion.

10) An audit opinion in which the auditors are taking exception to a specific treatment of accounting information is the:

A) disclaimer of opinion.

B) qualified opinion.

C) adverse opinion.

D) unqualified opinion.

11) Another name for a “clean” audit opinion is a(n):

A) disclaimer of opinion.

B) qualified opinion.

C) adverse opinion.

D) unqualified opinion.

12) Another name for an “except for” audit opinion is a(n):

A) disclaimer of opinion.

B) qualified opinion.

C) adverse opinion.

D) unqualified opinion.

13) Certified public accountants are licensed by the:

A) state.

B) SEC.

C) the college or university from which they earned their accounting degree.

D) AICPA.

14) What is an audit opinion?

A) Prepared by management, this is a written evaluation of the quality of work done by the independent accountants

B) Prepared by the independent accountants, this is a written evaluation of the company's financial statements

C) Prepared by management, this is a written evaluation of the quality of work done by the internal accountants.

D) Prepared by the independent accountants, this is a written evaluation of the goods or services  offered for sale by the company.