Ch 2

Question 1

Audit Committee

Answer 1

A committee consisting of the board of directors, charged with overseeing the entity’s system of internal control over finanical reporting, internal and external auditor’s and the financial reporting process

Question 2

Auditing Standards of the PCAOB

Answer 2

Statements issued by the Public Company Accounting Oversight Board

Question 3

Board of directors

Answer 3

people elected by the stockholders of a corporation to oversee management and to direct the affairs of the corporation

Question 4

Business Processes

Answer 4

processes implemented by management to achieve entity objectives

Question 5

Code of professional conduct

Answer 5

A set of principles, rules, and interpretations that establish guidance for acceptable behavior for accountants and auditors

Question 6

Corporate governance

Answer 6

The oversight mechanisms in place to help ensure the proper stewardship over an entity’s assets

Question 7

Ethics

Answer 7

a system or code of conduct based on moral duties and obligations that indicates how an individual should behave

Question 8

Generally accepted accounting principles (GAAP)

Answer 8

accounting principles that are generally accepted for the preparation of financial statements in the united states