Franklyn A Plus Pass
TEST BANK for Auditing and Assurance Services (an
integrated approach) 17th Edition by Chris E. Hogan
Alvin A. Arens, Randal J. Elder, Mark S. Beasley
All Chapters Included 1-24| Verified Q&As for Exam
Preparations| A+ GRADED
Fr
an
kl
yn
e
A
pl
us
Pa
Page | 1
ss
, Franklyn A Plus Pass
Chapter 1 The Demand for Audit and Other Assurance Services
Learning Objective 1-1
1) The Sarbanes-Oxley Act applies to which of the following companies?
A) All companies
B) Privately held companies
C) Public companies
D) All public companies and privately held companies with assets greater than $500 million Correct
Answer: C
Terms: Sarbanes-Oxley Act Diff: Easy
Objective: LO 1-1
AACSB: Reflective thinking skills Topic: SOX
2) Which of the following is considered audit evidence? A)
Oral statements
made by management Written
Communications Auditor
Observation
Fr
Y N N
an
B)
Oral statements made by management Written Communications Auditor Observation
kl
N Y Y
yn
C)
e
Oral statements
A
made by management Written
pl
Communications Auditor
us
Observation
Y Y Y
Pa
Page | 2
ss
, Franklyn A Plus Pass
D)
Oral statements
made by management Written
Communications Auditor
Observation
N N Y
Correct Answer: C
Terms: Audit evidence Diff: Moderate Objective: LO 1-1
AACSB: Reflective thinking skills
3) Evidence is paramount to audit and attestation engagements. List the four basic types of audit evidence.
Correct Answer: The four types of audit and attestation evidence include:
1. Electronic and documentary data about transactions
2. Written and electronic communications with outsiders
3. Observations by the auditor
4. Oral testimony of the auditee (client) Terms: Basic types of audit evidence Diff: Easy
Objective: LO 1-1
Fr
AACSB: Reflective thinking skills
an
kl
4) The criteria by which an auditor evaluates the information under audit may vary with the information
being audited.
yn
A) True
e
B) False Correct Answer: A
A
Terms: Criteria which an auditor evaluates information Diff: Easy
pl
Objective: LO 1-1
us
AACSB: Reflective thinking skills
Pa
Page | 3
ss
, Franklyn A Plus Pass
5) The criteria used by an external auditor to evaluate published financial statements are known as
generally accepted auditing standards.
A) True
B) False Correct Answer: B
Terms: Criteria used by external auditor to evaluate published financial statements Diff: Easy
Objective: LO 1-1
AACSB: Reflective thinking skills
6) The Sarbanes-Oxley Act establishes standards related to the audits of privately held companies.
A) True
B) False Correct Answer: B
Terms: Sarbanes-Oxley Act Diff: Easy
Objective: LO 1-1
AACSB: Reflective thinking skills Topic: SOX
7) The Sarbanes-Oxley Act is widely viewed as having ushered in sweeping changes to auditing and
financial reporting.
A) True
Fr
B) False Correct Answer: A
an
Terms: Sarbanes-Oxley Act Diff: Easy
kl
Objective: LO 1-1
yn
AACSB: Reflective thinking skills Topic: SOX
e
8) An auditor must be competent and have an independent mental attitude.
A
A) True
pl
B) False Correct Answer: A
us
Terms: Competence and independent mental attitude Diff: Easy
Pa
Page | 4
ss
TEST BANK for Auditing and Assurance Services (an
integrated approach) 17th Edition by Chris E. Hogan
Alvin A. Arens, Randal J. Elder, Mark S. Beasley
All Chapters Included 1-24| Verified Q&As for Exam
Preparations| A+ GRADED
Fr
an
kl
yn
e
A
pl
us
Pa
Page | 1
ss
, Franklyn A Plus Pass
Chapter 1 The Demand for Audit and Other Assurance Services
Learning Objective 1-1
1) The Sarbanes-Oxley Act applies to which of the following companies?
A) All companies
B) Privately held companies
C) Public companies
D) All public companies and privately held companies with assets greater than $500 million Correct
Answer: C
Terms: Sarbanes-Oxley Act Diff: Easy
Objective: LO 1-1
AACSB: Reflective thinking skills Topic: SOX
2) Which of the following is considered audit evidence? A)
Oral statements
made by management Written
Communications Auditor
Observation
Fr
Y N N
an
B)
Oral statements made by management Written Communications Auditor Observation
kl
N Y Y
yn
C)
e
Oral statements
A
made by management Written
pl
Communications Auditor
us
Observation
Y Y Y
Pa
Page | 2
ss
, Franklyn A Plus Pass
D)
Oral statements
made by management Written
Communications Auditor
Observation
N N Y
Correct Answer: C
Terms: Audit evidence Diff: Moderate Objective: LO 1-1
AACSB: Reflective thinking skills
3) Evidence is paramount to audit and attestation engagements. List the four basic types of audit evidence.
Correct Answer: The four types of audit and attestation evidence include:
1. Electronic and documentary data about transactions
2. Written and electronic communications with outsiders
3. Observations by the auditor
4. Oral testimony of the auditee (client) Terms: Basic types of audit evidence Diff: Easy
Objective: LO 1-1
Fr
AACSB: Reflective thinking skills
an
kl
4) The criteria by which an auditor evaluates the information under audit may vary with the information
being audited.
yn
A) True
e
B) False Correct Answer: A
A
Terms: Criteria which an auditor evaluates information Diff: Easy
pl
Objective: LO 1-1
us
AACSB: Reflective thinking skills
Pa
Page | 3
ss
, Franklyn A Plus Pass
5) The criteria used by an external auditor to evaluate published financial statements are known as
generally accepted auditing standards.
A) True
B) False Correct Answer: B
Terms: Criteria used by external auditor to evaluate published financial statements Diff: Easy
Objective: LO 1-1
AACSB: Reflective thinking skills
6) The Sarbanes-Oxley Act establishes standards related to the audits of privately held companies.
A) True
B) False Correct Answer: B
Terms: Sarbanes-Oxley Act Diff: Easy
Objective: LO 1-1
AACSB: Reflective thinking skills Topic: SOX
7) The Sarbanes-Oxley Act is widely viewed as having ushered in sweeping changes to auditing and
financial reporting.
A) True
Fr
B) False Correct Answer: A
an
Terms: Sarbanes-Oxley Act Diff: Easy
kl
Objective: LO 1-1
yn
AACSB: Reflective thinking skills Topic: SOX
e
8) An auditor must be competent and have an independent mental attitude.
A
A) True
pl
B) False Correct Answer: A
us
Terms: Competence and independent mental attitude Diff: Easy
Pa
Page | 4
ss
