1) The Sarbanes-Oxley Act of 2002, limits the nonaudit services that an audit fi
ID: 1096429 • Letter: 1
Question
1) The Sarbanes-Oxley Act of 2002, limits the nonaudit services that an audit firm can provide to public company audit clients. Which of the following is most likely to be a service that an auditor may provide to a public client?
a) Legal services
b) Tax compliance services
c) Internal audit outsourcing
d) Management consulting services
2) Under the Sarbanes-Oxley Act of 2002 (SOX)
a) The audit commitee must rotate at least one seat on an annual basis
b) The chairman of the board of directors must be a financial expert
c) At least one member of the audit committee must be a financial expert
d) All members of the audit committee must be financial experts
3) According to COSO, the position or internal entity that is best suited, as part of the enterprise risk management process, to devise and execute risk precedures for a particular department is
a) The internal audit department
b) The chief executive officer
c) A manager within the department
d) The audit committee
4) The Sarbanes-Oxley Act of 2002 (SOX) imposes which of the following requirements?
a) The board of directors must be composed entirely of indepent shareholders.
b) Once the audit committee has selected the independent public accounting firm, the committee must not interfere with the firm's conduct of the financial statement audit.
c) The audit committe must be composed entitely of independent memebers of the board
d) At least one member of the audit committee must be a former partner of the independent public accounting firm.
5) Each of the following is a method to evaluate internal controls based on the framework set by the committee of sponsoring organizations (COSO), except
a) Distinguishing economy risk from industry risk and enterprice risk
b) Identifying mitigating controls to prevent losses
c) Evaluating internal control systems that focus first on risk identication of specific losses
d) Testing to determine whether the controls are operating effectively and have prevented losses in the past.
6) Which of the following is not a component of internal control?
a) the control environment
b) monitoring
c) control risk
d) information and communication
7) Under the reporting requirements of Section 404 of the Sarbanes-Oxley Act of 2002 (SOX), the CEO and CFO must include a statement in the annual report to the effect that.
a) The board of directors has taken responsibility for establishing and maintaining an adequate system of internal control over financial reporting
b) The issuer has used the COSO nodel to design and assess the effectiveness of its system of internal control
c) The system of internal control has been assessed by an independent public accounting firm that is registered with the PCAOB
d) The system of internal control has been assessed by an independent public accounting firm that is not currently that subject of any PCAOB investigation
Hello everyone! I reaaly need a help to solve those questions. Plssss I really appreciate. Thanks
Explanation / Answer
1.b) Tax compliance services --- The Sarbanes-Oxley Act prohibits audit firms from providing consulting, legal, and internal auditingservices to public audit clients. Audit firms may provide conventional tax planning and compliance services to public audit clients.
2.c) At least one member of the audit committee must be a financial expert
3.b) The chief executive officer
4.Answer (A) is incorrect. The SOX requirement regarding independent members
refers to the audit committee, not the entire board.
Answer (B) is incorrect. The audit committee must be directly responsible for
appointing, compensating, and overseeing the work of the independent auditor.
Answer (C) is correct. Under the terms of SOX, each member of the issuer
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