Test Bank For Auditing and Assurance Services, 17e (Arens/Elder/Beasley)

1




Test Bank For Auditing and Assurance

Services, 17e (Arens/Elder/Beasley)

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 ANSWER: C

Terms: Sarbanes-

Oxley ActDiff: Easy

, 2



Objective: LO 1-1

AACSB: Reflective thinking

skillsTopic: SOX



2) Which of the following is considered audit

evidence?A)

Oral statements Written Auditor

made by management Communications Observation

Y N N



B)

Oral statements Written Auditor

made by management Communications Observation

N Y Y



C)

Oral statements Written Auditor

made by management Communications Observation

Y Y Y



D)

Oral statements Written Auditor

, 3



made by management Communications Observation

N N Y



ANSWER: C

Terms: Audit

evidenceDiff:

Moderate

Objective: LO 1-1

AACSB: Reflective thinking skills

, 4




3) Evidence is paramount to audit and attestation engagements. List the four basic types of audit

evidence.

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

AACSB: Reflective thinking skills



4) The criteria by which an auditor evaluates the information under audit may vary with the

information being audited.

A) True

B) False

ANSWER:

A

Terms: Criteria which an auditor evaluates information

Diff: Easy

Objective: LO 1-1

AACSB: Reflective thinking skills