Chapter 04 Ans
Chapter 04 Ans
I. Review Questions
The CPA examination is prepared and graded twice each year. It is generally
recognized as an academic examination. It includes multiple-choice questions
in the following subjects namely, Theory of Accounts, Practical Accounting I,
Practical Accounting II, Auditing Theory, Auditing Problems, Management
Services, Business Law and Taxation.
1. d 6. d
2. c 7. b
3. b 8. c
4. a 9. b
5. d 10. a
4. a. Consultation
b. To ensure that personnel have access to persons with more experience in
dealing with problems they have encountered.
c. For each industry for which the office has a client, a specialist will be
identified.
5. a. Independence
b. To ensure that personnel meet PICPA guidelines for independence.
c. Firm personnel must list their investments. Personnel must report any
stock acquisitions.
6. a. Supervision
b. To ensure that work performed meets the firm’s standard of quality.
c. Staff personnel are to follow firm guidelines for working paper
development.
4-4 Solutions Manual - Principles of Auditing and Other Assurance Services
7. a. Inspection / Review
b. To verify that quality control procedures are being followed.
c. Inspect the audit programs for all engagements.