1. Why is it important that people and organizations have trust in the financial reporting process?
2. What is the Securities and Exchange Commission?
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3. What types of companies fall under the jurisdiction of the SEC?
4. Who has the SEC given responsibility to for setting generally accepted accounting principles (GAAP) in the United States?
5. Who is the Emerging Issues Task Force?
6. Why doesn’t the SEC examine all the financial statements submitted to it to ensure their accuracy?
7. For what must public companies hire an auditing firm before they submit their financial statements to the SEC?
8. Why would a nonpublic company have its statements audited?
9. What is a CPA?
10. Which organization sets standards for and regulates firms who audit public companies?
11. Which act established the Public Company Accounting Oversight Board?
12. Which organization sets standards for and regulates firms who do not audit public companies?
13. What type of assurance does an audit provide?
14. Why do audits not provide absolute assurance that financial statements are presented fairly according to GAAP?
15. What are internal controls?
16. How is an auditor’s work affected by a company’s internal controls?
17. To whom is the audit report addressed?
18. What is an unqualified opinion?
19. Why would an auditor include an explanatory paragraph in an audit report?
20. Why would an auditor not give an unqualified opinion?