CPA Auditing and Attestation (AUD) : Types of Engagements - Integrated Audits

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Example Questions

Example Question #5 : Compliance, & Government Audits

An integrated audit

Possible Answers:

Both A and B

Neither A and B

Is only required by large public companies

Is not required by privately held companies

Correct answer:

Both A and B

Explanation:

An integrated audit is not required by private corporations.  The integrated audit is performed under PCAOB standards that govern public companies.

Example Question #6 : Compliance, & Government Audits

Integrated audits are regulated by the:

Possible Answers:

IFRS

AICPA

ASB

PCAOB

Correct answer:

PCAOB

Explanation:

Integrated audits are regulated under PCAOB standard number 5.

Example Question #7 : Compliance, & Government Audits

As described by PCAOB auditing standard number 2, an effective internal control

Possible Answers:

Is not effective if there are more than two immaterial weaknesses

Will disclose all internal control weaknesses

Is not effective if there is any material weakness

Is designed to uncover fraud

Correct answer:

Is not effective if there is any material weakness

Explanation:

According to PCAOB Accounting Standards:  “Maintaining effective internal control over financial reporting means that no material weaknesses exist; therefore, the objective of the audit of internal control over financial reporting is to obtain reasonable assurance that no material weaknesses exist as of the date specified in management's assessment.”

Example Question #8 : Compliance, & Government Audits

Of the following, which is true regarding PCAOB standards surrounding internal control?

Possible Answers:

The PCAOB has not issued standards surrounding internal control

PCAOB standards surrounding internal control apply only to audit of nonissuers

PCAOB standards surrounding internal control apply only to audits of issuers

All auditors must follow PCAOB standards surrounding internal control

Correct answer:

PCAOB standards surrounding internal control apply only to audits of issuers

Explanation:

PCAOB standards surrounding internal control apply only to audits of issuers.

Example Question #1 : Types Of Engagements Integrated Audits

Each of the following types of controls is considered to be an entity-level control, except those:

Possible Answers:

Addressing policies over significant risk management policies

Pertaining to the company's risk assessment process

Relating to the control environment

Regarding the company's annual shareholder meeting

Correct answer:

Regarding the company's annual shareholder meeting

Explanation:

Entity level controls include controls related to the control environment, the risk assessment process, and the policies over risk management policies. Controls regarding the company's annual shareholder meeting are controls related to a specific event rather than the entity as a whole.

Example Question #102 : Cpa Auditing And Attestation (Aud)

Internal control over financial reporting consists of which component?

Possible Answers:

Existing control activities

Risk assessment

Monitoring

All of these components

Correct answer:

All of these components

Explanation:

The components not listed would include Information and communication and control environment. These 5 components make up ICFR.

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