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Audit - Quiz
Contributed by: Elliott
  • 1. What is the Latin origin of the word audit?
A) auditus
B) audiens
C) audire
D) auditorium
  • 2. What does the Latin word 'audire' mean?
A) To speak
B) To count
C) To record
D) To hear
  • 3. According to the text, what is the primary goal of an audit report?
A) To manage the entity's daily operations
B) To guarantee total immunity from fraud
C) To rewrite the company's financial books
D) To express an opinion on the entity's financial information
  • 4. Who coined the term 'Audit Society'?
A) The Public Company Accounting Oversight Board
B) Michael Power
C) Moyer
D) Chatfield
  • 5. In medieval times, what did British auditors do to verify accounts?
A) They conducted digital forensic analysis
B) They heard accounts read out to them
C) They reviewed computer logs
D) They performed statistical sampling
  • 6. What is the primary focus of an Information Technology audit?
A) Physical building security
B) Management controls within an IT infrastructure
C) Employee payroll calculations
D) Marketing strategies
  • 7. What does an IT audit determine regarding organizational goals?
A) If systems are operating effectively to achieve goals
B) If the hardware is aesthetically pleasing
C) If the company should switch to a different software provider
D) If the IT staff is paid above market rate
  • 8. Why is an audit typically required for many entities?
A) To reduce electricity consumption
B) Due to incentives to misstate financial information
C) To increase the company's stock price
D) To automate bookkeeping tasks
  • 9. What kind of assurance do audits provide?
A) Absolute internal assurance
B) First-party assurance
C) Government-mandated tax clearance
D) Third-party assurance
  • 10. What is a statutory audit?
A) A legally required review of financial statements
B) A project management evaluation
C) An optional internal assessment
D) A voluntary energy conservation audit
  • 11. What is the purpose of statistical sampling in audits?
A) To address constraints and provide reasonable assurance
B) To verify every single transaction without exception
C) To eliminate the need for an auditor
D) To make the audit faster but less reliable
  • 12. What does 'cost audit' verify?
A) Cost accounts and records
B) Tax returns and legal compliance
C) Human resource policies
D) Public relations efforts
  • 13. According to Moyer in 1951, what was the most important duty of the auditor?
A) To advise on management strategy
B) To verify bookkeeping detail
C) To detect fraud
D) To assess project management risks
  • 14. What does a 'true and fair' set of financial statements indicate?
A) They contain no mistakes of any kind
B) They reflect only quantitative factors
C) They are free of material misstatements
D) They have been approved by the government
  • 15. Which field considers auditing as a costly activity in economic theory?
A) Forensic accounting
B) Statistical physics
C) Public administration
D) Optimal auditing
  • 16. Which organization governs audits of publicly traded companies in the US?
A) Financial Accounting Standards Board (FASB)
B) American Institute of Certified Public Accountants (AICPA)
C) Public Company Accounting Oversight Board (PCAOB)
D) Securities and Exchange Commission (SEC)
  • 17. Which section of the Sarbanes–Oxley Act of 2002 established the PCAOB?
A) Section 501
B) Section 302
C) Section 404
D) Section 201
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