huuit lils hay discontinue serving a client because the client does not fit the profile or growth strategy of the audit firm. ONS 1-15 01 Which of the following factors does not create a demand for external audit services? a. Potential bias by management in providing information. b. Requirements of the Center for Audit Quality (CAQ). c. Complexity of the accounting processing systems. d. Remoteness between a user and the organization. 1-16 10 1 audit report reasonably expect with regard to the audited finan- cial statements? Which of the following expectations can users of the a. The financial statements include all financial disclosures desired by users. b. The financial statements are presented fairly in accordance with GAAP The financial statements are free from all errors. d. All of the above are reasonable expectations. e. None of the above are reasonable expectations. 1-17 02 Which of the following parties are involved in preparing and auditing financial statements? a. Management. b. Audit committee. c. Internal audit function. 203 PM ^ 1/16/2019 en d. External auditor. e. All of the above. 1-18 0 2 Which of the following are the responsibilities of the external auditor in auditing financial statements? a. Maintaining internal controls and preparing financial reports. b. Providing internal assurance on internal control and financial Providing internal oversight of the reporting process. d. All of the above. e. None of the above. 1-19 EEN in which of the following categories do Big 4 audit firms operate? a. Sole-practitioner firms. b. Local firms c. Regional firms. d. Multinational firms -20 03 In terms of technical knowledge and expertise, which of the following should external auditors be able to do? a. Understand accounting and auditing authoritative literature. b. Develop industry and client-specific knowledge. c. Develop and apply computer skills. d. All of the above. e. None of the above. 0 4 nal auditing profession because of its continuing involvement in which of the following activities? a. The audit standard setting process for audits of publicly 1-21 The AICPA remains a valuable organization to the exter- traded companies. Regulation and enforcement of the intermal auditing protession. b. c. Education and administration of the CPA exam. d. Promulgation of financial accounting standards