Auditing & Assurance Services
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TESTBANK d d
Auditing & Assurance Services: ASystematic
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d Approach, 11th Edition Chapters 1 - 21
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,Auditing & Assurance Services d d d
Chapter 1: An Introduction to Assurance and Financial Statement Auditing
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Chapter 2: The Financial Statement Auditing Environment
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Chapter 3: Audit Planning, Types of Audit Tests, and Materiality
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Chapter 4: Risk Assessment
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Chapter 5: Evidence and Documentation
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Chapter 6: Internal Control in a Financial Statement Audit
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Chapter 7: Auditing Internal Control over Financial Reporting
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Chapter 8: Audit Sampling: An Overview and Application to Tests of Controls
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Chapter 9: Audit Sampling: An Application to Substantive Tests of Account Balances
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Chapter 10: Auditing the Revenue Process
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Chapter 11: Auditing the Purchasing Process
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Chapter 12: Auditing the Human Resource Management Process
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Chapter 13: Auditing the Inventory Management Process
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Chapter 14: Auditing the Financing/Investing Process: Prepaid Expenses, Intangible Assets, and
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Property, Plant, and Equipment
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Chapter 15: Auditing the Financing/Investing Process: Long-Term Liabilities, Stockholders’
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Equity, and Income Statement Accounts
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Chapter 16: Auditing the Financing/Investing Process: Cash and Investments
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Chapter 17: Completing the Audit Engagement
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Chapter 18: Reports on Audited Financial Statements
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Chapter 19: Professional Conduct, Independence, and Quality Management
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Chapter 20: Legal Liability
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Chapter 21: Assurance, Attestation, and Internal Auditing Services
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,Auditing & Assurance Services d d d
Chapter 01
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An Introduction to Assurance and Financial Statement Auditing
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True / False Questions
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1. Independence standards are required for audits of public companies, but not for auditsof
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private companies.
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True False
2. Decision makers demand reliable information that is provided by accountants.
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True False
3. Information asymmetry seldom occurs. d d d
True False
4. Conflicts of interest often occur between absentee owners and managers.
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True False
5. Auditing services and attestation services are the same.
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True False
6. Auditing is a type of attest service.
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True False
7. Testing all transactions that occurred during the period is cost prohibitive.
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True False
Multiple Choice Questions
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, Auditing & Assurance Services d d d
8. Why doauditorsgenerallyuseasamplingapproach toevidencegathering?
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A. Auditors are experts and do not need to look at much to know whether the financial
d d d d d d d d d d d d d d d
statements are correct or not.
d d d d d
B. Auditors must balance the cost of the audit with the need for d d d d d d d d d d d
precision.
d
C. Auditors must limit their exposure to their auditee to maintain d d d d d d d d d
independence.
d
D. The auditor's relationship with the auditee is generally adversarial, so the auditor willnot
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have access to all of the financial information of the company.
d d d d d d d d d d d
9. Which of the following statements best describes a relationship between sample size and
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other elements of auditing?
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A. If materiality increases, so will the
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sample size.
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B. If the desired level of assurance increases, sample sizes can be
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smaller.
d
C. If materiality decreases, sample size will need to
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increase.
d
D. There is no relationship between sample size and materiality or the desired levelof
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assurance.
d
10. Which of the following statements about the study of auditing is NOT true?
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A. The study of auditing can be valuable to future accountants and business decision
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makers whether or not they plan to become auditors.
d d d d d d d d d
B. The study of auditing focuses on learning the analytical and logical skills necessary to
d d d d d d d d d d d d d
evaluate the relevance and reliability of information.
d d d d d d d
C. The study of auditing focuses on learning the rules, techniques, and computations
d d d d d d d d d d d
required to analyze financial statements.
d d d d d
D. The study of auditing begins with the understanding of a coherent logical framework and
d d d d d d d d d d d d d
techniquesusefulforgatheringandanalyzingevidenceaboutothers'assertions.
d d d d d d d d d d
11. The basic purpose of a financial statement audit is to
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A. Detect
fraud.
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B. Examine individual transactions so that the auditor may certify as to d d d d d d d d d d
their validity.
d d
C. Provide assurance regarding whether the auditee's financial statements are
d d d d d d d d
fairly stated.
d d
D. Assure the consistent application of correct accounting
d d d d d d
procedures.
d
d d d
TESTBANK d d
Auditing & Assurance Services: ASystematic
d d d d d
d Approach, 11th Edition Chapters 1 - 21
d d d d d d d
,Auditing & Assurance Services d d d
Chapter 1: An Introduction to Assurance and Financial Statement Auditing
d d d d d d d d d
Chapter 2: The Financial Statement Auditing Environment
d d d d d d
Chapter 3: Audit Planning, Types of Audit Tests, and Materiality
d d d d d d d d d
Chapter 4: Risk Assessment
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Chapter 5: Evidence and Documentation
d d d d
Chapter 6: Internal Control in a Financial Statement Audit
d d d d d d d d
Chapter 7: Auditing Internal Control over Financial Reporting
d d d d d d d
Chapter 8: Audit Sampling: An Overview and Application to Tests of Controls
d d d d d d d d d d d
Chapter 9: Audit Sampling: An Application to Substantive Tests of Account Balances
d d d d d d d d d d d
Chapter 10: Auditing the Revenue Process
d d d d d
Chapter 11: Auditing the Purchasing Process
d d d d d
Chapter 12: Auditing the Human Resource Management Process
d d d d d d d
Chapter 13: Auditing the Inventory Management Process
d d d d d d
Chapter 14: Auditing the Financing/Investing Process: Prepaid Expenses, Intangible Assets, and
d d d d d d d d d d
Property, Plant, and Equipment
d d d d
Chapter 15: Auditing the Financing/Investing Process: Long-Term Liabilities, Stockholders’
d d d d d d d d
Equity, and Income Statement Accounts
d d d d d
Chapter 16: Auditing the Financing/Investing Process: Cash and Investments
d d d d d d d d
Chapter 17: Completing the Audit Engagement
d d d d d
Chapter 18: Reports on Audited Financial Statements
d d d d d d
Chapter 19: Professional Conduct, Independence, and Quality Management
d d d d d d d
Chapter 20: Legal Liability
d d d
Chapter 21: Assurance, Attestation, and Internal Auditing Services
d d d d d d d
,Auditing & Assurance Services d d d
Chapter 01
d d
An Introduction to Assurance and Financial Statement Auditing
d d d d d d d
True / False Questions
d d d
1. Independence standards are required for audits of public companies, but not for auditsof
d d d d d d d d d d d d d
private companies.
d d
True False
2. Decision makers demand reliable information that is provided by accountants.
d d d d d d d d d
True False
3. Information asymmetry seldom occurs. d d d
True False
4. Conflicts of interest often occur between absentee owners and managers.
d d d d d d d d d
True False
5. Auditing services and attestation services are the same.
d d d d d d d
True False
6. Auditing is a type of attest service.
d d d d d d
True False
7. Testing all transactions that occurred during the period is cost prohibitive.
d d d d d d d d d d
True False
Multiple Choice Questions
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, Auditing & Assurance Services d d d
8. Why doauditorsgenerallyuseasamplingapproach toevidencegathering?
d d d d d d d d d d
A. Auditors are experts and do not need to look at much to know whether the financial
d d d d d d d d d d d d d d d
statements are correct or not.
d d d d d
B. Auditors must balance the cost of the audit with the need for d d d d d d d d d d d
precision.
d
C. Auditors must limit their exposure to their auditee to maintain d d d d d d d d d
independence.
d
D. The auditor's relationship with the auditee is generally adversarial, so the auditor willnot
d d d d d d d d d d d d d
have access to all of the financial information of the company.
d d d d d d d d d d d
9. Which of the following statements best describes a relationship between sample size and
d d d d d d d d d d d d
other elements of auditing?
d d d d
A. If materiality increases, so will the
d d d d d
sample size.
d d
B. If the desired level of assurance increases, sample sizes can be
d d d d d d d d d d
smaller.
d
C. If materiality decreases, sample size will need to
d d d d d d d
increase.
d
D. There is no relationship between sample size and materiality or the desired levelof
d d d d d d d d d d d d d
assurance.
d
10. Which of the following statements about the study of auditing is NOT true?
d d d d d d d d d d d d
A. The study of auditing can be valuable to future accountants and business decision
d d d d d d d d d d d d
makers whether or not they plan to become auditors.
d d d d d d d d d
B. The study of auditing focuses on learning the analytical and logical skills necessary to
d d d d d d d d d d d d d
evaluate the relevance and reliability of information.
d d d d d d d
C. The study of auditing focuses on learning the rules, techniques, and computations
d d d d d d d d d d d
required to analyze financial statements.
d d d d d
D. The study of auditing begins with the understanding of a coherent logical framework and
d d d d d d d d d d d d d
techniquesusefulforgatheringandanalyzingevidenceaboutothers'assertions.
d d d d d d d d d d
11. The basic purpose of a financial statement audit is to
d d d d d d d d d
A. Detect
fraud.
d
B. Examine individual transactions so that the auditor may certify as to d d d d d d d d d d
their validity.
d d
C. Provide assurance regarding whether the auditee's financial statements are
d d d d d d d d
fairly stated.
d d
D. Assure the consistent application of correct accounting
d d d d d d
procedures.
d
