Enter Title

SOX

100

Under the Sarbanes-Oxley Act, who must certify the accuracy of financial statements?
A. Internal auditors
B. External auditors
C. CEO and CFO
D. Audit committee

C. CEO and CFO

200

Under the Sarbanes-Oxley Act, what is the MAIN reason auditors now report to the audit committee instead of management?
A. To reduce audit costs
B. To improve communication speed
C. To strengthen auditor independence and objectivity
D. To simplify financial reporting

C. To strengthen auditor independence and objectivity

300

Which section of the Sarbanes-Oxley Act requires management to assess internal controls over financial reporting?
A. Section 301
B. Section 302
C. Section 404
D. Section 409

C. Section 404

PCAOB

100

The mission of the Public Company Accounting Oversight Board is primarily to:
A. Maximize company profits
B. Assist management decision-making
C. Protect investors and public interest
D. Reduce audit costs

C. Protect investors and public interest

200

The Public Company Accounting Oversight Board was created to solve which major problem identified in the audit crisis?
A. Lack of accounting standards
B. Auditor self-regulation failure
C. Weak tax enforcement
D. Poor financial reporting software

B. Auditor self-regulation failure

300

which of the following is NOT one of the four pillars of the Public Company Accounting Oversight Board?
A. Registration
B. Inspections
C. Enforcement
D. Financial reporting

D. Financial reporting

Auditor Duties

100

Which principle is MOST directly impaired when auditors have financial ties to a client?
A. Integrity
B. Objectivity
C. Confidentiality
D. Competence

B. Objectivity

200

Professional skepticism requires auditors to:
A. Assume management is dishonest
B. Accept evidence at face value
C. Critically evaluate evidence regardless of source
D. Focus only on high-risk areas

C. Critically evaluate evidence regardless of source

300

Which scenario BEST illustrates a failure of due care?
A. Auditor documents all procedures
B. Auditor relies solely on management explanations without testing
C. Auditor increases sample size
D. Auditor consults specialists

B. Auditor relies solely on management explanations without testing

Tingo Group

100

Tingo Group’s alleged fraud primarily involved which financial statement distortion?
A. Understated liabilities
B. Overstated revenues and assets
C. Misclassified expenses
D. Inventory manipulation

B. Overstated revenues and assets

200

A key red flag in Tingo’s reporting was:
A. Declining revenue trends
B. Excessive transparency
C. Unusually strong performance with limited verification
D. High audit fees

C. Unusually strong performance with limited verification

300

Auditors’ reliance on management data without external confirmation indicates failure in:
A. Sampling
B. Professional skepticism
C. Audit documentation
D. Independence

B. Professional skepticism

Tyco

100

Tyco’s fraud is BEST categorized as:
A. Financial statement fraud
B. Asset misappropriation
C. Tax fraud
D. Inventory fraud

B. Asset misappropriation

200

The concealment of executive compensation primarily involved:
A. Revenue inflation
B. Expense capitalization
C. Misclassification as legitimate transactions
D. Off-balance sheet financing

C. Misclassification as legitimate transactions

300

Weak governance at Tyco MOST directly enabled:
A. Strong internal controls
B. Executive override of controls
C. Accurate disclosures
D. External audit strength

B. Executive override of controls