Auditing & Assurance Services
j j j
TEST BANK j j
Auditing & Assurance Services: A Systematic
j j j j j
j Approach, 11th Edition Chapters 1 - 21
j j j j j j j
,Auditing & Assurance Services
j j j
Chapter j1: jAn jIntroduction jto jAssurance jand jFinancial jStatement jAuditing
Chapter j2: jThe jFinancial jStatement jAuditing jEnvironment
Chapter j3: jAudit jPlanning, jTypes jof jAudit jTests, jand jMateriality
Chapter j4: jRisk jAssessment
Chapter j5: jEvidence jand jDocumentation
Chapter j6: jInternal jControl jin ja jFinancial jStatement jAudit
Chapter j7: jAuditing jInternal jControl jover jFinancial jReporting
Chapter j8: jAudit jSampling: jAn jOverview jand jApplication jto jTests jof jControls
Chapter j9: jAudit jSampling: jAn jApplication jto jSubstantive jTests jof jAccount jBalances
Chapter j10: jAuditing jthe jRevenue jProcess
Chapter j11: jAuditing jthe jPurchasing jProcess
Chapter j12: jAuditing jthe jHuman jResource jManagement jProcess
Chapter j13: jAuditing jthe jInventory jManagement jProcess
Chapter j14: jAuditing jthe jFinancing/Investing jProcess: jPrepaid jExpenses, jIntangible jAssets,
jand jProperty, jPlant, jand jEquipment
Chapter j15: jAuditing jthe jFinancing/Investing jProcess: jLong-Term jLiabilities, jStockholders’
jEquity, jand jIncome jStatement jAccounts
Chapter j16: jAuditing jthe jFinancing/Investing jProcess: jCash jand jInvestments
Chapter j17: jCompleting jthe jAudit jEngagement
Chapter j18: jReports jon jAudited jFinancial jStatements
Chapter j19: jProfessional jConduct, jIndependence, jand jQuality jManagement
Chapter j20: jLegal jLiability
Chapter j21: jAssurance, jAttestation, jand jInternal jAuditing jServices
,Auditing & Assurance Services
j j j
Chapter 01 j j
An Introduction to Assurance and Financial Statement Auditing
j j j j j j j
True j / j False j Questions
1. Independence j standards j are j required j for j audits j of j public j companies, j but j not j for
j auditsjof jprivate jcompanies.
True False
2. Decision j makers j demand j reliable j information j that j is j provided j by j accountants.
True False
3. Information j asymmetry j seldom j occurs.
True False
4. Conflicts j of j interest j often j occur j between j absentee j owners j and j managers.
True False
5. Auditing j services j and j attestation j services j are j the j same.
True False
6. Auditing jis ja jtype jof jattest jservice.
True False
7. Testing jall jtransactions jthat joccurred jduring jthe jperiod jis jcost jprohibitive.
True False
Multiple jChoice j Questions
, Auditing & Assurance Services
j j j
8. Why jdo jauditors jgenerally juse ja jsampling japproach jto jevidence jgathering?
A. Auditors j are jexperts j and jdo jnot jneed jto jlook jat jmuch jto jknow jwhether jthe
j financial jstatements jare jcorrect jor jnot.
B. Auditors j must jbalance jthe jcost jof jthe jaudit jwith jthe jneed
jforjprecision.
C. Auditors jmust jlimit jtheir jexposure jto jtheir jauditee jto
jmaintainji ndependence.
D. The jauditor's jrelationship jwith jthe jauditee jis jgenerally jadversarial, jso jthe jauditor
j willjnot jhave jaccess jto jall jof jthe jfinancial jinformation jof jthe jcompany.
9. Which j of j the j following j statements j best j describes j a j relationship j between j sample j size
j andjother jelements jof jauditing?
A. If j materiality j increases, j so j will
j thejs ample j size.
B. If j the j desired j level j of j assurance j increases, j sample j sizes j can
j bejs maller.
C. If jmateriality jdecreases, jsample jsize jwill jneed
jtoji ncrease.
D. There jis jno jrelationship j between jsample jsize j and j materiality jor jthe j desired
jleveljof jassurance.
10. Which j of jthe j following jstatements j about j the j study j of j auditing j is jNOT jtrue?
A. The j study j of j auditing j can j be j valuable j to j future j accountants j and j business
j decisionjm akers jwhether jor jnot jthey jplan jto jbecome jauditors.
B. The j study j of j auditing j focuses j on j learning j the j analytical j and j logical j skills j necessary
j tojevaluate jthe jrelevance jand jreliability jof jinformation.
C. The j study j of j auditing j focuses j on j learning j the j rules, j techniques, j and
j computations jrequired jto janalyze jfinancial jstatements.
D. The j study j of j auditing j begins j with jthe j understanding j of j a jcoherent j logical
j framework jand jtechniques juseful jfor jgathering jand janalyzing jevidence jabout jothers'
jassertions.
11. The jbasic jpurpose jof ja jfinancial jstatement jaudit jis jto
A. Detectj
fraud.
B. Examine j individual j transactions j so j that j the j auditor j may j certify j as
j tojt heir jvalidity.
C. Provide j assurance j regarding j whether j the j auditee's j financial j statements
j arejfairly jstated.
D. Assure j the j consistent j application j of j correct
j accountingjprocedures.
j j j
TEST BANK j j
Auditing & Assurance Services: A Systematic
j j j j j
j Approach, 11th Edition Chapters 1 - 21
j j j j j j j
,Auditing & Assurance Services
j j j
Chapter j1: jAn jIntroduction jto jAssurance jand jFinancial jStatement jAuditing
Chapter j2: jThe jFinancial jStatement jAuditing jEnvironment
Chapter j3: jAudit jPlanning, jTypes jof jAudit jTests, jand jMateriality
Chapter j4: jRisk jAssessment
Chapter j5: jEvidence jand jDocumentation
Chapter j6: jInternal jControl jin ja jFinancial jStatement jAudit
Chapter j7: jAuditing jInternal jControl jover jFinancial jReporting
Chapter j8: jAudit jSampling: jAn jOverview jand jApplication jto jTests jof jControls
Chapter j9: jAudit jSampling: jAn jApplication jto jSubstantive jTests jof jAccount jBalances
Chapter j10: jAuditing jthe jRevenue jProcess
Chapter j11: jAuditing jthe jPurchasing jProcess
Chapter j12: jAuditing jthe jHuman jResource jManagement jProcess
Chapter j13: jAuditing jthe jInventory jManagement jProcess
Chapter j14: jAuditing jthe jFinancing/Investing jProcess: jPrepaid jExpenses, jIntangible jAssets,
jand jProperty, jPlant, jand jEquipment
Chapter j15: jAuditing jthe jFinancing/Investing jProcess: jLong-Term jLiabilities, jStockholders’
jEquity, jand jIncome jStatement jAccounts
Chapter j16: jAuditing jthe jFinancing/Investing jProcess: jCash jand jInvestments
Chapter j17: jCompleting jthe jAudit jEngagement
Chapter j18: jReports jon jAudited jFinancial jStatements
Chapter j19: jProfessional jConduct, jIndependence, jand jQuality jManagement
Chapter j20: jLegal jLiability
Chapter j21: jAssurance, jAttestation, jand jInternal jAuditing jServices
,Auditing & Assurance Services
j j j
Chapter 01 j j
An Introduction to Assurance and Financial Statement Auditing
j j j j j j j
True j / j False j Questions
1. Independence j standards j are j required j for j audits j of j public j companies, j but j not j for
j auditsjof jprivate jcompanies.
True False
2. Decision j makers j demand j reliable j information j that j is j provided j by j accountants.
True False
3. Information j asymmetry j seldom j occurs.
True False
4. Conflicts j of j interest j often j occur j between j absentee j owners j and j managers.
True False
5. Auditing j services j and j attestation j services j are j the j same.
True False
6. Auditing jis ja jtype jof jattest jservice.
True False
7. Testing jall jtransactions jthat joccurred jduring jthe jperiod jis jcost jprohibitive.
True False
Multiple jChoice j Questions
, Auditing & Assurance Services
j j j
8. Why jdo jauditors jgenerally juse ja jsampling japproach jto jevidence jgathering?
A. Auditors j are jexperts j and jdo jnot jneed jto jlook jat jmuch jto jknow jwhether jthe
j financial jstatements jare jcorrect jor jnot.
B. Auditors j must jbalance jthe jcost jof jthe jaudit jwith jthe jneed
jforjprecision.
C. Auditors jmust jlimit jtheir jexposure jto jtheir jauditee jto
jmaintainji ndependence.
D. The jauditor's jrelationship jwith jthe jauditee jis jgenerally jadversarial, jso jthe jauditor
j willjnot jhave jaccess jto jall jof jthe jfinancial jinformation jof jthe jcompany.
9. Which j of j the j following j statements j best j describes j a j relationship j between j sample j size
j andjother jelements jof jauditing?
A. If j materiality j increases, j so j will
j thejs ample j size.
B. If j the j desired j level j of j assurance j increases, j sample j sizes j can
j bejs maller.
C. If jmateriality jdecreases, jsample jsize jwill jneed
jtoji ncrease.
D. There jis jno jrelationship j between jsample jsize j and j materiality jor jthe j desired
jleveljof jassurance.
10. Which j of jthe j following jstatements j about j the j study j of j auditing j is jNOT jtrue?
A. The j study j of j auditing j can j be j valuable j to j future j accountants j and j business
j decisionjm akers jwhether jor jnot jthey jplan jto jbecome jauditors.
B. The j study j of j auditing j focuses j on j learning j the j analytical j and j logical j skills j necessary
j tojevaluate jthe jrelevance jand jreliability jof jinformation.
C. The j study j of j auditing j focuses j on j learning j the j rules, j techniques, j and
j computations jrequired jto janalyze jfinancial jstatements.
D. The j study j of j auditing j begins j with jthe j understanding j of j a jcoherent j logical
j framework jand jtechniques juseful jfor jgathering jand janalyzing jevidence jabout jothers'
jassertions.
11. The jbasic jpurpose jof ja jfinancial jstatement jaudit jis jto
A. Detectj
fraud.
B. Examine j individual j transactions j so j that j the j auditor j may j certify j as
j tojt heir jvalidity.
C. Provide j assurance j regarding j whether j the j auditee's j financial j statements
j arejfairly jstated.
D. Assure j the j consistent j application j of j correct
j accountingjprocedures.
