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