Chapter 1: Auditing: Integral to the Economy 5 copy

1. The need for assurance services arises because the interests of the users of information may be different from that of the interests of those responsible for providing information.
True False

2. A financial statement audit is a systematic process of objectively obtaining and evaluating evidence. True

False

True

False

True

False

True

False

3. Auditors should conduct their work with an attitude of professional skepticism.

4. A bank using Milton Company's financial statements to determine the creditworthiness of a potential loan to Milton is a good example of the need for unbiased reporting.

5. An integrated audit requires the auditor to assess the effectiveness of internal controls.

6. In all states, a CPA must have completed at least 150 hours of college semester hours to receive their license.
True False

7. The Center for Audit Quality was started by the International Federation of Accountants.
True False

8. The Center for Audit Quality has the primary authority to set auditing standards.
True False

9. In an audit, management is considered the “client”.

True

False

10. Auditing is the process of attesting to assertions about economic actions and events.
True False

11. Auditing is the process of verifying the accuracy of the financial statements.
True False

12. Internal auditing only provides assurance about internal control effectiveness.
True False

13. Auditing exists because users need unbiased information on which to assess management performance and make economic decisions.
True False

14. A free market can only