Test Bank
Auditing & Assurance Services: A Systematic Approach,
By William Messier Jr, Steven Glover,
12th edition
,Table of content
Chapter 1: an introduction to assurance and financial statement auditing
chapter 2: the financial statement auditing environment
Chapter 3: audit planning, types of audit tests, and materiality
chapter 4: risk assessment
Chapter 5: evidence and documentation
Chapter 6: internal control in a financial statement audit chapter
7: auditing internal control over financial reporting
Chapter 8: audit sampling: an overview and application to tests of controls chapter
9: audit sampling: an application to substantive tests of account balances chapter 10:
auditing the revenue process
Chapter 11: auditing the purchasing process
Chapter 12: auditing the human resource management process
chapter 13: auditing the inventory management process
Chapter 14: auditing the financing/investing process: prepaid expenses, intangible assets,
and property, plant, and equipment
Chapter 15: auditing the financing/investing process: long-term liabilities, stockholders’
Equity, and income statement accounts
Chapter 16: auditing the financing/investing process: cash and investments
chapter 17: completing the audit engagement
Chapter 18: reports on audited financial statements
Chapter 19: professional conduct, independence, and quality management
chapter 20: legal liability
Chapter 21: assurance, attestation, and internal auditing services
,Auditing & assurance services: a systematic approach, 12e (messier)
Chapter 1 an introduction to assurance and financial statement auditing
1) Auditing focuses on rules, techniques, and computations required to prepare and analyze
financial information.
Answer: false
Difficulty: 1 easy
Topic: the importance for studying auditing
Learning objective: 01-01 understand why studying auditing can be valuable to you whether or
not you plan to become an auditor, and why it is different from studying accounting.
Bloom's: remember
aacsb: communication
Aicpa: bb legal; fn decision making
2) Decision makers demand reliable information that is provided by accountants.
Answer: true
Difficulty: 1 easy
Topic: the demand for auditing and assurance
Learning objective: 01-02 understand the demand for auditing and be able to explain the desired
characteristics of auditors and audit services through an analogy to a house inspector and a house
inspection service.
Bloom's: understand
aacsb: communication
Aicpa: fn decision making; bb industry
3) Information asymmetry seldom occurs.
Answer: false
Difficulty: 2 medium
Topic: the demand for auditing and assurance
Learning objective: 01-02 understand the demand for auditing and be able to explain the desired
characteristics of auditors and audit services through an analogy to a house inspector and a house
inspection service.
Bloom's: apply
Aacsb: communication
Aicpa: bb industry; fn reporting
, 4) Conflicts of interest often occur between absentee owners and managers.
Answer: true
Difficulty: 2 medium
Topic: the demand for auditing and assurance
Learning objective: 01-02 understand the demand for auditing and be able to explain the desired
characteristics of auditors and audit services through an analogy to a house inspector and a house
inspection service.
Bloom's: apply
Aacsb: communication
Aicpa: bb industry; fn reporting
5) Auditing services and attestation services are the same.
Answer: false
Difficulty: 1 easy
Topic: auditing, attest, and assurance services defined
Learning objective: 01-03 understand the relationships among auditing, attestation, and
assurance services.
Bloom's: understand
aacsb: communication
Aicpa: bb industry; fn reporting
6) Auditing is a type of attest service.
Answer: true
Difficulty: 1 easy
Topic: auditing, attest, and assurance services defined
Learning objective: 01-03 understand the relationships among auditing, attestation, and
assurance services.; 01-04 know the basic definition of a financial statement audit.
Bloom's: understand
aacsb: communication
Aicpa: bb industry; fn reporting
7) Testing all transactions that occurred during the period is cost prohibitive.
Answer: true
Difficulty: 2 medium
topic: the audit process
Learning objective: 01-06 be able to explain why on most audit engagements an auditor tests
only a sample of transactions that occurred.
Bloom's: apply
Aacsb: communication
Aicpa: fn decision making; bb critical thinking
Auditing & Assurance Services: A Systematic Approach,
By William Messier Jr, Steven Glover,
12th edition
,Table of content
Chapter 1: an introduction to assurance and financial statement auditing
chapter 2: the financial statement auditing environment
Chapter 3: audit planning, types of audit tests, and materiality
chapter 4: risk assessment
Chapter 5: evidence and documentation
Chapter 6: internal control in a financial statement audit chapter
7: auditing internal control over financial reporting
Chapter 8: audit sampling: an overview and application to tests of controls chapter
9: audit sampling: an application to substantive tests of account balances chapter 10:
auditing the revenue process
Chapter 11: auditing the purchasing process
Chapter 12: auditing the human resource management process
chapter 13: auditing the inventory management process
Chapter 14: auditing the financing/investing process: prepaid expenses, intangible assets,
and property, plant, and equipment
Chapter 15: auditing the financing/investing process: long-term liabilities, stockholders’
Equity, and income statement accounts
Chapter 16: auditing the financing/investing process: cash and investments
chapter 17: completing the audit engagement
Chapter 18: reports on audited financial statements
Chapter 19: professional conduct, independence, and quality management
chapter 20: legal liability
Chapter 21: assurance, attestation, and internal auditing services
,Auditing & assurance services: a systematic approach, 12e (messier)
Chapter 1 an introduction to assurance and financial statement auditing
1) Auditing focuses on rules, techniques, and computations required to prepare and analyze
financial information.
Answer: false
Difficulty: 1 easy
Topic: the importance for studying auditing
Learning objective: 01-01 understand why studying auditing can be valuable to you whether or
not you plan to become an auditor, and why it is different from studying accounting.
Bloom's: remember
aacsb: communication
Aicpa: bb legal; fn decision making
2) Decision makers demand reliable information that is provided by accountants.
Answer: true
Difficulty: 1 easy
Topic: the demand for auditing and assurance
Learning objective: 01-02 understand the demand for auditing and be able to explain the desired
characteristics of auditors and audit services through an analogy to a house inspector and a house
inspection service.
Bloom's: understand
aacsb: communication
Aicpa: fn decision making; bb industry
3) Information asymmetry seldom occurs.
Answer: false
Difficulty: 2 medium
Topic: the demand for auditing and assurance
Learning objective: 01-02 understand the demand for auditing and be able to explain the desired
characteristics of auditors and audit services through an analogy to a house inspector and a house
inspection service.
Bloom's: apply
Aacsb: communication
Aicpa: bb industry; fn reporting
, 4) Conflicts of interest often occur between absentee owners and managers.
Answer: true
Difficulty: 2 medium
Topic: the demand for auditing and assurance
Learning objective: 01-02 understand the demand for auditing and be able to explain the desired
characteristics of auditors and audit services through an analogy to a house inspector and a house
inspection service.
Bloom's: apply
Aacsb: communication
Aicpa: bb industry; fn reporting
5) Auditing services and attestation services are the same.
Answer: false
Difficulty: 1 easy
Topic: auditing, attest, and assurance services defined
Learning objective: 01-03 understand the relationships among auditing, attestation, and
assurance services.
Bloom's: understand
aacsb: communication
Aicpa: bb industry; fn reporting
6) Auditing is a type of attest service.
Answer: true
Difficulty: 1 easy
Topic: auditing, attest, and assurance services defined
Learning objective: 01-03 understand the relationships among auditing, attestation, and
assurance services.; 01-04 know the basic definition of a financial statement audit.
Bloom's: understand
aacsb: communication
Aicpa: bb industry; fn reporting
7) Testing all transactions that occurred during the period is cost prohibitive.
Answer: true
Difficulty: 2 medium
topic: the audit process
Learning objective: 01-06 be able to explain why on most audit engagements an auditor tests
only a sample of transactions that occurred.
Bloom's: apply
Aacsb: communication
Aicpa: fn decision making; bb critical thinking
