1)The generally accepted auditing standards adopted by the AICPA include several requirements that imply that the CPASI O Assume responsibility for determining and applying materiality levels when assessing the risk of material misstatements in the financial statements. B. Comply with accounting principles and disclosure requirements for financial statements issued by the AICPA PCAOB and SEC. O C. Assume responsibility for GAAS specification in detail of how much and what types of evidence the auditor needs to obtain. D. Assume responsibility for inadequate internal control procedures that will mitigate client business risk 2) The Securities and Exchange Commission impose restrictions on publicly traded audit clients . Which of the following is true for audits of publicly traded companies ? Auditors are restricted from providing audit services to privately held companies. B The SEC has power to establish rules for any CPA associated with audited financial statements submitted to the Commission . The has no influence in setting generally accepted accounting principles and disclosure requirements for financial statements . D The Public Company Accounting Oversight Board is responsible for issuing standards to be used by auditors of private and publicly traded companies . 3) Which of the following is true about auditing standards in the audit of financial statements? A. Auditing standards should provide more clearly defined guidelines as an aid in determining the extent of evidence to be accumulated as many practitioners along with critics of the profession believe. Auditing standardk should provide more specific guidelines and requirements because this would eliminate some of the difficult audit debisions and provide a source of defense if the CPA is charged with conducting an inadequate audit O There is probably a greater harm from defining authoritative guidelines too specifically than too broadly as agreed upon by both the profession and the users of auditing services O Too broad general requirements could turn auditing into mechanical evidence gathering that is void of professional judgment 4) International Standards on Auditing (ISAs) are issued by the International Auditing and Assurance Standards Board (IAASB) of the International Federation of Accountants (IFAC) and are designed to: O A. Improve the reliability and robustness of auditing practices and related services throughout the world. Issue pronouncements on a variety of audit and attest functions that ensure harmonization of auditing practices and related services worldwide similar to those issued by the AICPA and the PCAOB. O Ensure the uniformity of national auditing standards and other related services standards and their acceptance worldwide. O D. Promote the dominance of the different countries ' auditing practices and related services as do not override a specific country's regulations governing audit of financial and other information Answers