AUDITING AND ASSURANCE SERVICES 9TH
EDITION COMPREHENSIVE EXAM SCRIPT WITH
SOLUTIONS
◉ Reasonable Assurance.
Answer: The concept that an audit done in accordance with auditing
standards may fail to detect a material misstatement in a client's
financial statements. In an auditing context this term has been
defined to mean a high but not absolute level of assurance
◉ Reporting.
Answer: The end product of the auditor's work, indicating the
auditing standards followed and expressing an opinion as to
whether an entity's financial statements are fairly presented in
accordance with agreed-upon criteria (e.g., GAAP)
◉ Risk of Material Misstatement.
Answer: The preaudit risk that the entity's financial statements
contain a material misstatement whether caused by error or fraud
◉ Unqualified/unmodified audit report.
, Answer: A "clean" audit report, indicating the auditor's opinion that
a client's financial statements are fairly presented in accordance
with agreed-upon criteria (e.g., GAAP)
◉ An independent audit adds value to the communication of
financial information because the audit.
Answer: Lends credibility to the financial statements
◉ Which of the following best describes the reason why an
independent auditor is often retained to report on financial
statements?.
Answer: Different interests may exist between the entity preparing
the statements and the persons using the statements, and thus
outside assurance is needed to enhance the credibility of the
statements
◉ Which of the following best describes relationships among
auditing, attest, and assurance services?.
Answer: Auditing is a type of assurance service
◉ Which of the following statements relating to attest and assurance
services is not correct?.
Answer: Financial statement auditing is a form of attest service but
it is not an assurance service
EDITION COMPREHENSIVE EXAM SCRIPT WITH
SOLUTIONS
◉ Reasonable Assurance.
Answer: The concept that an audit done in accordance with auditing
standards may fail to detect a material misstatement in a client's
financial statements. In an auditing context this term has been
defined to mean a high but not absolute level of assurance
◉ Reporting.
Answer: The end product of the auditor's work, indicating the
auditing standards followed and expressing an opinion as to
whether an entity's financial statements are fairly presented in
accordance with agreed-upon criteria (e.g., GAAP)
◉ Risk of Material Misstatement.
Answer: The preaudit risk that the entity's financial statements
contain a material misstatement whether caused by error or fraud
◉ Unqualified/unmodified audit report.
, Answer: A "clean" audit report, indicating the auditor's opinion that
a client's financial statements are fairly presented in accordance
with agreed-upon criteria (e.g., GAAP)
◉ An independent audit adds value to the communication of
financial information because the audit.
Answer: Lends credibility to the financial statements
◉ Which of the following best describes the reason why an
independent auditor is often retained to report on financial
statements?.
Answer: Different interests may exist between the entity preparing
the statements and the persons using the statements, and thus
outside assurance is needed to enhance the credibility of the
statements
◉ Which of the following best describes relationships among
auditing, attest, and assurance services?.
Answer: Auditing is a type of assurance service
◉ Which of the following statements relating to attest and assurance
services is not correct?.
Answer: Financial statement auditing is a form of attest service but
it is not an assurance service
