, 1
Copyright © 2018 McGraw-Hill
Q Q Q
,Auditing & Assurance Services, 9e (Louwers) C
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hapter 1 Auditing and Assurance Services
Q Q Q Q Q
1) The audit objective that all transactions and accounts that should be presented in the financial
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statements are in fact included is related to which of the PCAOB assertions?
Q Q Q Q Q Q Q Q Q Q Q Q
A) Existence.
B) Rights and obligations. Q Q
C) Completeness.
D) Valuation. An Q
swer: C Difficult
Q Q
y: 1 Easy
Q Q
Topic: Management's Financial Statement Assertions
Q Q Q Q
Learning Objective: 01- Q Q
03 Describe and define the assertions that management makes about the recognition, measureme
Q Q Q Q Q Q Q Q Q Q Q Q
nt, presentation, and disclosure of the financial statements and explain why auditors use them as
Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q
the focal point of the audit.
Q Q Q Q Q
Blooms: Remember Q
AACSB: Analytical Thinking Acce
Q Q Q
ssibility: Keyboard Navigation
Q Q
2) Cutoff tests designed to detect purchases made before the end of the year that have been
Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q
recorded in the subsequent year provide assurance about management's assertion of:
Q Q Q Q Q Q Q Q Q Q
A) presentation and disclosure. Q Q
B) completeness.
C) rights and obligations. Q Q
D) existence. Answer Q
: B Difficulty: 2 Med
Q Q Q Q
ium
Topic: Management's Financial Statement Assertions
Q Q Q Q
Learning Objective: 01- Q Q
03 Describe and define the assertions that management makes about the recognition, measureme
Q Q Q Q Q Q Q Q Q Q Q Q
nt, presentation, and disclosure of the financial statements and explain why auditors use them as
Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q
the focal point of the audit.
Q Q Q Q Q
Blooms: Remember Q
AACSB: Analytical Thinking Acce
Q Q Q
ssibility: Keyboard Navigation
Q Q
2
Copyright © 2018 McGraw-Hill
Q Q Q
, 3) During an audit of an entity's stockholders' equity accounts, the auditor determines whether
Q Q Q Q Q Q Q Q Q Q Q Q Q
there are restrictions on retained earnings resulting from loans, agreements, or state law. This
Q Q Q Q Q Q Q Q Q Q Q Q Q Q
audit procedure most likely is intended to verify management's assertion of:
Q Q Q Q Q Q Q Q Q Q
A) existence or occurrence. Q Q
B) completeness.
C) valuation or allocation. Q Q
D) presentation and disclosure. Q Q
QAnswer: D Q
Difficulty: 2 Medium Q Q
Topic: Management's Financial Statement Assertions
Q Q Q Q
Learning Objective: 01- Q Q
03 Describe and define the assertions that management makes about the recognition, measureme
Q Q Q Q Q Q Q Q Q Q Q Q
nt, presentation, and disclosure of the financial statements and explain why auditors use them as
Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q
the focal point of the audit.
Q Q Q Q Q
Blooms: Remember Q
AACSB: Analytical Thinking Acce
Q Q Q
ssibility: Keyboard Navigation
Q Q
4) The confirmation of an account payable balance selected from the general ledger provides
Q Q Q Q Q Q Q Q Q Q Q Q Q
primary evidence regarding which management assertion?
Q Q Q Q Q
A) Completeness.
B) Valuation.
C) Allocation.
D) Existence. Answe Q
r: D Difficulty: 2 Me
Q Q Q Q
dium
Topic: Management's Financial Statement Assertions
Q Q Q Q
Learning Objective: 01- Q Q
03 Describe and define the assertions that management makes about the recognition, measureme
Q Q Q Q Q Q Q Q Q Q Q Q
nt, presentation, and disclosure of the financial statements and explain why auditors use them as
Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q
the focal point of the audit.
Q Q Q Q Q
Blooms: Remember Q
AACSB: Analytical Thinking Acce
Q Q Q
ssibility: Keyboard Navigation
Q Q
5) What type of evidence would provide the highest level of assurance in an attestation
Q Q Q Q Q Q Q Q Q Q Q Q Q Q
engagement?
A) Evidence secured solely from within the entity.
Q Q Q Q Q Q
B) Evidence obtained from independent sources.
Q Q Q Q
C) Evidence obtained indirectly. Q Q
D) Evidence obtained from multiple internal inquiries.
Q Q Q Q Q
QAnswer: B Q
Difficulty: 3 Hard Q Q
Topic: Auditing, Attestation, and Assurance Services
Q Q Q Q Q
Learning Objective: 01- Q Q
02 Define and contrast financial statement auditing, attestation, and assurance services.
Q Q Q Q Q Q Q Q Q Q
Blooms: Remember Q
3
Copyright © 2018 McGraw-HillQ Q Q
Copyright © 2018 McGraw-Hill
Q Q Q
,Auditing & Assurance Services, 9e (Louwers) C
Q Q Q Q Q Q
hapter 1 Auditing and Assurance Services
Q Q Q Q Q
1) The audit objective that all transactions and accounts that should be presented in the financial
Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q
statements are in fact included is related to which of the PCAOB assertions?
Q Q Q Q Q Q Q Q Q Q Q Q
A) Existence.
B) Rights and obligations. Q Q
C) Completeness.
D) Valuation. An Q
swer: C Difficult
Q Q
y: 1 Easy
Q Q
Topic: Management's Financial Statement Assertions
Q Q Q Q
Learning Objective: 01- Q Q
03 Describe and define the assertions that management makes about the recognition, measureme
Q Q Q Q Q Q Q Q Q Q Q Q
nt, presentation, and disclosure of the financial statements and explain why auditors use them as
Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q
the focal point of the audit.
Q Q Q Q Q
Blooms: Remember Q
AACSB: Analytical Thinking Acce
Q Q Q
ssibility: Keyboard Navigation
Q Q
2) Cutoff tests designed to detect purchases made before the end of the year that have been
Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q
recorded in the subsequent year provide assurance about management's assertion of:
Q Q Q Q Q Q Q Q Q Q
A) presentation and disclosure. Q Q
B) completeness.
C) rights and obligations. Q Q
D) existence. Answer Q
: B Difficulty: 2 Med
Q Q Q Q
ium
Topic: Management's Financial Statement Assertions
Q Q Q Q
Learning Objective: 01- Q Q
03 Describe and define the assertions that management makes about the recognition, measureme
Q Q Q Q Q Q Q Q Q Q Q Q
nt, presentation, and disclosure of the financial statements and explain why auditors use them as
Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q
the focal point of the audit.
Q Q Q Q Q
Blooms: Remember Q
AACSB: Analytical Thinking Acce
Q Q Q
ssibility: Keyboard Navigation
Q Q
2
Copyright © 2018 McGraw-Hill
Q Q Q
, 3) During an audit of an entity's stockholders' equity accounts, the auditor determines whether
Q Q Q Q Q Q Q Q Q Q Q Q Q
there are restrictions on retained earnings resulting from loans, agreements, or state law. This
Q Q Q Q Q Q Q Q Q Q Q Q Q Q
audit procedure most likely is intended to verify management's assertion of:
Q Q Q Q Q Q Q Q Q Q
A) existence or occurrence. Q Q
B) completeness.
C) valuation or allocation. Q Q
D) presentation and disclosure. Q Q
QAnswer: D Q
Difficulty: 2 Medium Q Q
Topic: Management's Financial Statement Assertions
Q Q Q Q
Learning Objective: 01- Q Q
03 Describe and define the assertions that management makes about the recognition, measureme
Q Q Q Q Q Q Q Q Q Q Q Q
nt, presentation, and disclosure of the financial statements and explain why auditors use them as
Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q
the focal point of the audit.
Q Q Q Q Q
Blooms: Remember Q
AACSB: Analytical Thinking Acce
Q Q Q
ssibility: Keyboard Navigation
Q Q
4) The confirmation of an account payable balance selected from the general ledger provides
Q Q Q Q Q Q Q Q Q Q Q Q Q
primary evidence regarding which management assertion?
Q Q Q Q Q
A) Completeness.
B) Valuation.
C) Allocation.
D) Existence. Answe Q
r: D Difficulty: 2 Me
Q Q Q Q
dium
Topic: Management's Financial Statement Assertions
Q Q Q Q
Learning Objective: 01- Q Q
03 Describe and define the assertions that management makes about the recognition, measureme
Q Q Q Q Q Q Q Q Q Q Q Q
nt, presentation, and disclosure of the financial statements and explain why auditors use them as
Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q
the focal point of the audit.
Q Q Q Q Q
Blooms: Remember Q
AACSB: Analytical Thinking Acce
Q Q Q
ssibility: Keyboard Navigation
Q Q
5) What type of evidence would provide the highest level of assurance in an attestation
Q Q Q Q Q Q Q Q Q Q Q Q Q Q
engagement?
A) Evidence secured solely from within the entity.
Q Q Q Q Q Q
B) Evidence obtained from independent sources.
Q Q Q Q
C) Evidence obtained indirectly. Q Q
D) Evidence obtained from multiple internal inquiries.
Q Q Q Q Q
QAnswer: B Q
Difficulty: 3 Hard Q Q
Topic: Auditing, Attestation, and Assurance Services
Q Q Q Q Q
Learning Objective: 01- Q Q
02 Define and contrast financial statement auditing, attestation, and assurance services.
Q Q Q Q Q Q Q Q Q Q
Blooms: Remember Q
3
Copyright © 2018 McGraw-HillQ Q Q
