Auditing & Assurance Services
y y y
TEST BANKy y
Auditing & Assurance Services: A Systematic
y y y y y
y Approach, 11th Edition Chapters 1 - 21
y y y y y y y
,Auditing & Assurance Services
y y y
Chapter y1: yAn yIntroduction yto yAssurance yand yFinancial yStatement yAuditing
Chapter y2: yThe yFinancial yStatement yAuditing yEnvironment
Chapter y3: yAudit yPlanning, yTypes yof yAudit yTests, yand yMateriality
Chapter y4: yRisk yAssessment
Chapter y5: yEvidence yand yDocumentation
Chapter y6: yInternal yControl yin ya yFinancial yStatement yAudit
Chapter y7: yAuditing yInternal yControl yover yFinancial yReporting
Chapter y8: yAudit ySampling: yAn yOverview yand yApplication yto yTests yof yControls
Chapter y9: yAudit ySampling: yAn yApplication yto ySubstantive yTests yof yAccount yBalances
Chapter y10: yAuditing ythe yRevenue yProcess
Chapter y11: yAuditing ythe yPurchasing yProcess
Chapter y12: yAuditing ythe yHuman yResource yManagement yProcess
Chapter y13: yAuditing ythe yInventory yManagement yProcess
Chapter y14: yAuditing ythe yFinancing/Investing yProcess: yPrepaid yExpenses, yIntangible
yAssets, yand yProperty, yPlant, yand yEquipment
Chapter y15: yAuditing ythe yFinancing/Investing yProcess: yLong-Term yLiabilities,
yStockholders’ yEquity, yand yIncome yStatement yAccounts
Chapter y16: yAuditing ythe yFinancing/Investing yProcess: yCash yand yInvestments
Chapter y17: yCompleting ythe yAudit yEngagement
Chapter y18: yReports yon yAudited yFinancial yStatements
Chapter y19: yProfessional yConduct, yIndependence, yand yQuality yManagement
Chapter y20: yLegal yLiability
Chapter y21: yAssurance, yAttestation, yand yInternal yAuditing yServices
,Auditing & Assurance Services
y y y
Chapter y 01y
An y Introduction y to y Assurance y and y Financial y Statement
y Auditing
True y / y False y Questions
1. Independence y standards y are y required yfor y audits y of ypublic y companies, y but y not yfor
y auditsyof yprivate ycompanies.
True False
2. Decision y makers y demand y reliable y information y that y is y provided y by y accountants.
True False
3. Information y asymmetry y seldom y occurs.
True False
4. Conflicts y of y interest y often y occur y between y absentee y owners y and ymanagers.
True False
5. Auditing y services y and y attestation y services y are y the y same.
True False
6. Auditing yis ya ytype yof yattest yservice.
True False
7. Testing yall ytransactions ythat yoccurred yduring ythe yperiod yis ycost yprohibitive.
True False
Multiple y Choice y Questions
, Auditing & Assurance Services
y y y
8. Why ydo yauditors ygenerally yuse ya ysampling yapproach yto yevidence ygathering?
A. Auditors y are yexperts y and ydo ynot yneed yto ylook yat ymuch yto yknow ywhether ythe
yfinancialy statements yare ycorrect yor ynot.
B. Auditors ymust ybalance ythe ycost yof ythe yaudit ywith ythe
yneed yforyprecision.
C. Auditors ymust ylimit ytheir yexposure yto ytheir yauditee yto
ymaintainy independence.
D. The yauditor's yrelationship ywith ythe yauditee yis ygenerally yadversarial, yso ythe yauditor
y willynot yhave yaccess yto yall yof ythe yfinancial yinformation yof ythe ycompany.
9. Which y of y the y following y statements y best y describes y a y relationship y between y sample
y size y andyother yelements yof yauditing?
A. If y materiality y increases, y so y will
y theysample ysize.
B. If y the y desired y level y of y assurance y increases, y sample y sizes
y can y bey smaller.
C. If ymateriality ydecreases, ysample ysize ywill yneed
ytoy increase.
D. There yis yno yrelationship y between ysample ysize yand ymateriality yor ythe ydesired
ylevelyof yassurance.
10. Which y of y the y following ystatements y about y the y study y of y auditing y is yNOT ytrue?
A. The y study y of y auditing y can y be y valuable y to y future y accountants y and y business
y decisionym akers ywhether yor ynot ythey yplan yto ybecome yauditors.
B. The y study y of y auditing y focuses y on y learning y the y analytical y and y logical y skills
y necessary y toy
evaluate ythe yrelevance yand yreliability yof yinformation.
C. The y study y of y auditing y focuses y on y learning y the y rules, y techniques, y and
y computations y required yto yanalyze yfinancial ystatements.
D. The y study y of y auditing y begins y with y the y understanding y of y a ycoherent y logical
y framework yand ytechniques yuseful yfor ygathering yand yanalyzing yevidence yabout
yothers' yassertions.
11. The ybasic ypurpose yof ya yfinancial ystatement yaudit yis yto
A. Detect
fraud.
y
B. Examine y individual y transactions y so y that y the y auditor y may y certify
y as y toy
their yvalidity.
C. Provide y assurance y regarding y whether y the y auditee's y financial y statements
y areyfairly ystated.
D. Assure y the y consistent y application y of y correct
y accountingyprocedures.
y y y
TEST BANKy y
Auditing & Assurance Services: A Systematic
y y y y y
y Approach, 11th Edition Chapters 1 - 21
y y y y y y y
,Auditing & Assurance Services
y y y
Chapter y1: yAn yIntroduction yto yAssurance yand yFinancial yStatement yAuditing
Chapter y2: yThe yFinancial yStatement yAuditing yEnvironment
Chapter y3: yAudit yPlanning, yTypes yof yAudit yTests, yand yMateriality
Chapter y4: yRisk yAssessment
Chapter y5: yEvidence yand yDocumentation
Chapter y6: yInternal yControl yin ya yFinancial yStatement yAudit
Chapter y7: yAuditing yInternal yControl yover yFinancial yReporting
Chapter y8: yAudit ySampling: yAn yOverview yand yApplication yto yTests yof yControls
Chapter y9: yAudit ySampling: yAn yApplication yto ySubstantive yTests yof yAccount yBalances
Chapter y10: yAuditing ythe yRevenue yProcess
Chapter y11: yAuditing ythe yPurchasing yProcess
Chapter y12: yAuditing ythe yHuman yResource yManagement yProcess
Chapter y13: yAuditing ythe yInventory yManagement yProcess
Chapter y14: yAuditing ythe yFinancing/Investing yProcess: yPrepaid yExpenses, yIntangible
yAssets, yand yProperty, yPlant, yand yEquipment
Chapter y15: yAuditing ythe yFinancing/Investing yProcess: yLong-Term yLiabilities,
yStockholders’ yEquity, yand yIncome yStatement yAccounts
Chapter y16: yAuditing ythe yFinancing/Investing yProcess: yCash yand yInvestments
Chapter y17: yCompleting ythe yAudit yEngagement
Chapter y18: yReports yon yAudited yFinancial yStatements
Chapter y19: yProfessional yConduct, yIndependence, yand yQuality yManagement
Chapter y20: yLegal yLiability
Chapter y21: yAssurance, yAttestation, yand yInternal yAuditing yServices
,Auditing & Assurance Services
y y y
Chapter y 01y
An y Introduction y to y Assurance y and y Financial y Statement
y Auditing
True y / y False y Questions
1. Independence y standards y are y required yfor y audits y of ypublic y companies, y but y not yfor
y auditsyof yprivate ycompanies.
True False
2. Decision y makers y demand y reliable y information y that y is y provided y by y accountants.
True False
3. Information y asymmetry y seldom y occurs.
True False
4. Conflicts y of y interest y often y occur y between y absentee y owners y and ymanagers.
True False
5. Auditing y services y and y attestation y services y are y the y same.
True False
6. Auditing yis ya ytype yof yattest yservice.
True False
7. Testing yall ytransactions ythat yoccurred yduring ythe yperiod yis ycost yprohibitive.
True False
Multiple y Choice y Questions
, Auditing & Assurance Services
y y y
8. Why ydo yauditors ygenerally yuse ya ysampling yapproach yto yevidence ygathering?
A. Auditors y are yexperts y and ydo ynot yneed yto ylook yat ymuch yto yknow ywhether ythe
yfinancialy statements yare ycorrect yor ynot.
B. Auditors ymust ybalance ythe ycost yof ythe yaudit ywith ythe
yneed yforyprecision.
C. Auditors ymust ylimit ytheir yexposure yto ytheir yauditee yto
ymaintainy independence.
D. The yauditor's yrelationship ywith ythe yauditee yis ygenerally yadversarial, yso ythe yauditor
y willynot yhave yaccess yto yall yof ythe yfinancial yinformation yof ythe ycompany.
9. Which y of y the y following y statements y best y describes y a y relationship y between y sample
y size y andyother yelements yof yauditing?
A. If y materiality y increases, y so y will
y theysample ysize.
B. If y the y desired y level y of y assurance y increases, y sample y sizes
y can y bey smaller.
C. If ymateriality ydecreases, ysample ysize ywill yneed
ytoy increase.
D. There yis yno yrelationship y between ysample ysize yand ymateriality yor ythe ydesired
ylevelyof yassurance.
10. Which y of y the y following ystatements y about y the y study y of y auditing y is yNOT ytrue?
A. The y study y of y auditing y can y be y valuable y to y future y accountants y and y business
y decisionym akers ywhether yor ynot ythey yplan yto ybecome yauditors.
B. The y study y of y auditing y focuses y on y learning y the y analytical y and y logical y skills
y necessary y toy
evaluate ythe yrelevance yand yreliability yof yinformation.
C. The y study y of y auditing y focuses y on y learning y the y rules, y techniques, y and
y computations y required yto yanalyze yfinancial ystatements.
D. The y study y of y auditing y begins y with y the y understanding y of y a ycoherent y logical
y framework yand ytechniques yuseful yfor ygathering yand yanalyzing yevidence yabout
yothers' yassertions.
11. The ybasic ypurpose yof ya yfinancial ystatement yaudit yis yto
A. Detect
fraud.
y
B. Examine y individual y transactions y so y that y the y auditor y may y certify
y as y toy
their yvalidity.
C. Provide y assurance y regarding y whether y the y auditee's y financial y statements
y areyfairly ystated.
D. Assure y the y consistent y application y of y correct
y accountingyprocedures.
