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1 | | Which of the following services would be considered an assurance engagement?
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| | A) | Compilation of financial statements from an entitys accounting records.
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| | B) | Providing information systems advice to a former audit client.
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| | C) | Reporting on compliance with a universitys accreditation requirements.
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| | D) | Providing advice on the structure of the internal audit function for an entity whose external audit is performed by another firm.
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2 | | Unlike auditing standards, the assurance standards do not contain a requirement that auditors obtain
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| | A) | Independence of mind and in appearance
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| | B) | Sufficient appropriate evidence to support the conclusion expressed in their report.
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| | C) | Adequate background and knowledge in the subject matter being examined.
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| | D) | Reasonable assurance about the subject matter as the only appropriate level of assurance.
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3 | | A practitioners engaged to express his or her opinion on a managements report on the effectiveness of the companys internal control is an example of which of the following types of engagements?
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| | A) | Audit engagement.
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| | B) | Assurance engagement.
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| | C) | Review engagement.
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| | D) | Agreed-upon procedure engagement.
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4 | | Which of the following professional services would be considered an attest engagement?
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| | A) | A management consulting engagement to provide IT advice to a client.
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| | B) | An engagement to report on compliance with statutory requirements.
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| | C) | An income tax engagement to prepare the tax return.
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| | D) | Compilation of financial statements from a clients accounting records.
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5 | | The practitioner provides absolute assurance to the user in the performance of
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| | A) | An assurance engagement.
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| | B) | A review engagement.
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| | C) | An audit engagement.
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| | D) | None of the above.
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6 | | When conducting a review, the practitioners work would generally not include which of the following procedures?
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| | A) | Performing analytical procedures.
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| | B) | Obtaining a general understanding of the entitys methods and policies related to the capitalization of assets.
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| | C) | Obtaining a representation letter from management.
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| | D) | Observing the year-end inventory count and subsequent testing of inventory counts.
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7 | | A review engagement will typically
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| | A) | Require the practitioner to obtain an understanding of the entitys internal control.
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| | B) | Result in a statement of limited assurance about the fair presentation of the financial information.
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| | C) | Result in an explicit opinion about whether the financial information is presented fairly.
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| | D) | Include only the gathering of financial data for the primary purpose of preparing the financial information with the related notes.
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8 | | The standard report issued by a practitioner after reviewing the financial statements of an entity states that
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| | A) | A review includes evaluating the appropriateness of the reasonableness of accounting estimates made by management.
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| | B) | A review includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements.
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| | C) | Nothing has come to the practitioners attention that causes he or her to believe that the financial statements do not present fairly, in all material respects.
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| | D) | The practitioner does not express an opinion or any other form of assurance on the financial statements.
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9 | | Financial statements of an entity that have been reviewed by an practitioner should be accompanied by a report stating that
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| | A) | The scope of the inquiry and the analytical procedures performed by the accountant have not been restricted.
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| | B) | All information included in the financial statements is the representation of the management of the entity.
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| | C) | A review includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements.
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| | D) | A review is greater in scope than a compilation, the objective of which is to present financial statements that are free of material misstatements.
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10 | | Which of the following statements is correct concerning both an engagement to compile and an engagement to review an entitys financial statements?
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| | A) | The practitioner is not required to obtain an understanding of internal control.
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| | B) | The practitioner must be independent of mind and in appearance.
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| | C) | The practitioner expresses no assurance on the financial statements.
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| | D) | The practitioner should obtain a written management representation letter.
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11 | | When engaged to compile the financial statements, the practitioner is required to possess a general knowledge of the entitys accounting principles and practices. This requirement will most likely include obtaining an understanding of the
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| | A) | Qualifications of the accounting department personnel.
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| | B) | Risk factors associated with potential non-compliance with laws.
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| | C) | Internal control structure in place.
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| | D) | None of the above are required for a compilation.
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12 | | When compiling the financial statements of a non-public entity, an accountant should
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| | A) | Review agreements with financial institutions for restrictions on cash balances.
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| | B) | Understand the accounting principles and practices of the entitys industry.
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| | C) | Inquire of key personnel concerning related parties and subsequent events.
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| | D) | Perform ratio analyses of the financial data of comparable prior periods.
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13 | | The objectivity of an internal audit function will most likely be enhanced if the director of the IA department reports to the entitys
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| | A) | Those charged with governance.
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| | B) | Chief financial officer [CFO].
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| | C) | Controller.
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| | D) | Senior management team [as a group].
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14 | | Which of the following is a service least likely provided by the internal audit function?
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| | A) | Audit of financial statements.
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| | B) | Operational auditing.
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| | C) | Compliance reviews.
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| | D) | Evaluation of risks and controls.
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15 | | Which of the following is not one of the Principles in the IIA Code of Ethics?
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| | A) | Integrity.
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| | B) | Objectivity.
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| | C) | Due Professional Care.
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| | D) | Competency.
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16 | | Which of the following is a performance standard from the International Standards for the Professional Practice of Internal Auditing?
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| | A) | Purpose, authority and responsibility.
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| | B) | Proficiency and due professional care.
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| | C) | Independence and objectivity.
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| | D) | Managing the internal audit function.
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17 | | The general accreditation granted by the Institute of Internal Auditors is known as the
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| | A) | CFE.
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| | B) | CGAP.
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| | C) | CFSA.
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| | D) | CIA.
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18 | | Which of the following is not one of the general areas of the IIAs International Standards for the Professional Practice of Internal Auditing?
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| | A) | Performance standards.
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| | B) | Implementation standards.
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| | C) | Ethical standards.
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| | D) | Attribute standards.
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19 | | The four principles of the IIA Code of Ethics are
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| | A) | Confidentiality, competency, objectivity, and integrity.
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| | B) | Objectivity, independence, compliance, and due diligence.
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| | C) | Honesty, integrity, independence, and competency.
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| | D) | Integrity, confidentiality, independence, and compliance.
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