Auditing & Assurance Services
x x x
TEST BANK
x x
Auditing & Assurance Services: A Systematic
x x x x x
Approach, 11th Edition Chapters 1 - 21
x x x x x x x x
,Auditing & Assurance Services
x x x
Chapter x1: xAn xIntroduction xto xAssurance xand xFinancial xStatement xAuditing
Chapter x2: xThe xFinancial xStatement xAuditing xEnvironment
Chapter x3: xAudit xPlanning, xTypes xof xAudit xTests, xand xMateriality
Chapter x4: xRisk xAssessment
Chapter x5: xEvidence xand xDocumentation
Chapter x6: xInternal xControl xin xa xFinancial xStatement xAudit
Chapter x7: xAuditing xInternal xControl xover xFinancial xReporting
Chapter x8: xAudit xSampling: xAn xOverview xand xApplication xto xTests xof xControls
Chapter x9: xAudit xSampling: xAn xApplication xto xSubstantive xTests xof xAccount xBalances
Chapter x10: xAuditing xthe xRevenue xProcess
Chapter x11: xAuditing xthe xPurchasing xProcess
Chapter x12: xAuditing xthe xHuman xResource xManagement xProcess
Chapter x13: xAuditing xthe xInventory xManagement xProcess
Chapter x14: xAuditing xthe xFinancing/Investing xProcess: xPrepaid xExpenses, xIntangible
xAssets, xand xProperty, xPlant, xand xEquipment
Chapter x15: xAuditing xthe xFinancing/Investing xProcess: xLong-Term xLiabilities,
xStockholders’ xEquity, xand xIncome xStatement xAccounts
Chapter x16: xAuditing xthe xFinancing/Investing xProcess: xCash xand xInvestments
Chapter x17: xCompleting xthe xAudit xEngagement
Chapter x18: xReports xon xAudited xFinancial xStatements
Chapter x19: xProfessional xConduct, xIndependence, xand xQuality xManagement
Chapter x20: xLegal xLiability
Chapter x21: xAssurance, xAttestation, xand xInternal xAuditing xServices
,Auditing & Assurance Services
x x x
Chapter 01 x x
An Introduction to Assurance and Financial Statement
x x x x x x
x Auditing
True x / x False x Questions
1. Independence x standards x are x required x for x audits x of x public x companies, x but x not
x for x auditsx
of xprivate xcompanies.
True False
2. Decision x makers x demand x reliable x information x that x is x provided x by x accountants.
True False
3. Information x asymmetry x seldom x occurs.
True False
4. Conflicts x of x interest x often x occur x between x absentee x owners x and x managers.
True False
5. Auditing x services x and x attestation x services x are x the x same.
True False
6. Auditing xis x a xtype xof x attest xservice.
True False
7. Testing xall xtransactions xthat x occurred xduring x the x period xis xcost x prohibitive.
True False
Multiple xChoice x Questions
, Auditing & Assurance Services
x x x
8. Why xdo xauditors xgenerally xuse xa xsampling xapproach xto xevidence xgathering?
A. Auditors x are x experts x and x do x not x need xto x look x at x much x to x know x whether xthe
x financialx
statements xare xcorrect xor xnot.
B. Auditors x must x balance xthe x cost xof xthe x audit xwith xthe
xneed xforx precision.
C. Auditors x must x limit xtheir xexposure x to xtheir xauditee xto
xmaintainx i ndependence.
D. The x auditor's x relationship xwith xthe x auditee xis xgenerally xadversarial, x so xthe
xauditor x willx
not xhave xaccess xto xall xof xthe xfinancial xinformation xof xthe xcompany.
9. Which x of x the x following x statements x best x describes x a x relationship x between x sample
x size x andx
other xelements xof xauditing?
A. If x materiality x increases, x so x will
x thexs ample x size.
B. If x the x desired x level x of x assurance x increases, x sample x sizes
x can x bexsmaller.
C. If xmateriality x decreases, xsample xsize xwill
xneed xtox i ncrease.
D. There x is x no x relationship x between x sample x size x and x materiality x or x the
x desired x levelx of xassurance.
10. Which x of x the x following x statements x about x the x study x of x auditing x is x NOT x true?
A. The x study x of x auditing x can x be x valuable x to x future x accountants x and x business
x decisionx
m akers xwhether xor xnot xthey xplan xto xbecome xauditors.
B. The x study x of x auditing x focuses x on x learning x the x analytical x and x logical x skills
x necessary x tox
evaluate xthe xrelevance xand xreliability xof xinformation.
C. The x study x of x auditing x focuses x on x learning x the x rules, x techniques, x and
x computationsx required xto xanalyze xfinancial xstatements.
D. The x study x of x auditing x begins x with x the x understanding x of x a x coherent x logical
x framework x and xtechniques xuseful xfor xgathering xand xanalyzing xevidence xabout
xothers' xassertions.
11. The x basic x purpose x of x a xfinancial x statement x audit x is xto
A. Detect
fraud.
x
B. Examine x individual x transactions x so x that x the x auditor x may x certify
x as x tox
t heir xvalidity.
C. Provide x assurance x regarding x whether x the x auditee's x financial
x statements x arex f airly xstated.
D. Assure x the x consistent x application x of x correct
x accountingx procedures.
x x x
TEST BANK
x x
Auditing & Assurance Services: A Systematic
x x x x x
Approach, 11th Edition Chapters 1 - 21
x x x x x x x x
,Auditing & Assurance Services
x x x
Chapter x1: xAn xIntroduction xto xAssurance xand xFinancial xStatement xAuditing
Chapter x2: xThe xFinancial xStatement xAuditing xEnvironment
Chapter x3: xAudit xPlanning, xTypes xof xAudit xTests, xand xMateriality
Chapter x4: xRisk xAssessment
Chapter x5: xEvidence xand xDocumentation
Chapter x6: xInternal xControl xin xa xFinancial xStatement xAudit
Chapter x7: xAuditing xInternal xControl xover xFinancial xReporting
Chapter x8: xAudit xSampling: xAn xOverview xand xApplication xto xTests xof xControls
Chapter x9: xAudit xSampling: xAn xApplication xto xSubstantive xTests xof xAccount xBalances
Chapter x10: xAuditing xthe xRevenue xProcess
Chapter x11: xAuditing xthe xPurchasing xProcess
Chapter x12: xAuditing xthe xHuman xResource xManagement xProcess
Chapter x13: xAuditing xthe xInventory xManagement xProcess
Chapter x14: xAuditing xthe xFinancing/Investing xProcess: xPrepaid xExpenses, xIntangible
xAssets, xand xProperty, xPlant, xand xEquipment
Chapter x15: xAuditing xthe xFinancing/Investing xProcess: xLong-Term xLiabilities,
xStockholders’ xEquity, xand xIncome xStatement xAccounts
Chapter x16: xAuditing xthe xFinancing/Investing xProcess: xCash xand xInvestments
Chapter x17: xCompleting xthe xAudit xEngagement
Chapter x18: xReports xon xAudited xFinancial xStatements
Chapter x19: xProfessional xConduct, xIndependence, xand xQuality xManagement
Chapter x20: xLegal xLiability
Chapter x21: xAssurance, xAttestation, xand xInternal xAuditing xServices
,Auditing & Assurance Services
x x x
Chapter 01 x x
An Introduction to Assurance and Financial Statement
x x x x x x
x Auditing
True x / x False x Questions
1. Independence x standards x are x required x for x audits x of x public x companies, x but x not
x for x auditsx
of xprivate xcompanies.
True False
2. Decision x makers x demand x reliable x information x that x is x provided x by x accountants.
True False
3. Information x asymmetry x seldom x occurs.
True False
4. Conflicts x of x interest x often x occur x between x absentee x owners x and x managers.
True False
5. Auditing x services x and x attestation x services x are x the x same.
True False
6. Auditing xis x a xtype xof x attest xservice.
True False
7. Testing xall xtransactions xthat x occurred xduring x the x period xis xcost x prohibitive.
True False
Multiple xChoice x Questions
, Auditing & Assurance Services
x x x
8. Why xdo xauditors xgenerally xuse xa xsampling xapproach xto xevidence xgathering?
A. Auditors x are x experts x and x do x not x need xto x look x at x much x to x know x whether xthe
x financialx
statements xare xcorrect xor xnot.
B. Auditors x must x balance xthe x cost xof xthe x audit xwith xthe
xneed xforx precision.
C. Auditors x must x limit xtheir xexposure x to xtheir xauditee xto
xmaintainx i ndependence.
D. The x auditor's x relationship xwith xthe x auditee xis xgenerally xadversarial, x so xthe
xauditor x willx
not xhave xaccess xto xall xof xthe xfinancial xinformation xof xthe xcompany.
9. Which x of x the x following x statements x best x describes x a x relationship x between x sample
x size x andx
other xelements xof xauditing?
A. If x materiality x increases, x so x will
x thexs ample x size.
B. If x the x desired x level x of x assurance x increases, x sample x sizes
x can x bexsmaller.
C. If xmateriality x decreases, xsample xsize xwill
xneed xtox i ncrease.
D. There x is x no x relationship x between x sample x size x and x materiality x or x the
x desired x levelx of xassurance.
10. Which x of x the x following x statements x about x the x study x of x auditing x is x NOT x true?
A. The x study x of x auditing x can x be x valuable x to x future x accountants x and x business
x decisionx
m akers xwhether xor xnot xthey xplan xto xbecome xauditors.
B. The x study x of x auditing x focuses x on x learning x the x analytical x and x logical x skills
x necessary x tox
evaluate xthe xrelevance xand xreliability xof xinformation.
C. The x study x of x auditing x focuses x on x learning x the x rules, x techniques, x and
x computationsx required xto xanalyze xfinancial xstatements.
D. The x study x of x auditing x begins x with x the x understanding x of x a x coherent x logical
x framework x and xtechniques xuseful xfor xgathering xand xanalyzing xevidence xabout
xothers' xassertions.
11. The x basic x purpose x of x a xfinancial x statement x audit x is xto
A. Detect
fraud.
x
B. Examine x individual x transactions x so x that x the x auditor x may x certify
x as x tox
t heir xvalidity.
C. Provide x assurance x regarding x whether x the x auditee's x financial
x statements x arex f airly xstated.
D. Assure x the x consistent x application x of x correct
x accountingx procedures.
