TEST BANK
For Auditing and Assurance Services, 9th Edition By
Timothy Louwers, Penelope Bagley, Verified Chapter's 1
- 12, Complete Newest Version Updated A+
,Table Of Contents
Part One
The Contemporary Auditing Environment
1. Auditing And Assurance Services
2. Professional Standards
Part Two
The Financial Statement Audit
3. Engagement Planning;
4. Management Fraud And Audit Risk
5. Risk Assessment: Internal Control Evaluation
6. Employee Fraud And The Audit Of Cash
7. Revenue And Collection Cycle
8. Acquisition And Expenditure Cycle;
9. Production Cycle;
10. Finance And Investment Cycle
11. Completing The Audit
12. Reports On Audited Financial Statement
,Auditing & Assurance Services, 9e (Louwers)
Chapter 1 Auditing and Assurance Services
1) The audit objective that all transactions and accounts that should be presented in the financial
statements are in fact included is related to which of the PCAOB assertions?
A) Existence.
B) Rights and obligations.
C) Completeness.
D) Valuation.
Answer: C
Difficulty: 1 Easy
Topic: Management's Financial Statement Assertions
Learning Objective: 01-03 Describe and define the assertions that management makes about the
recognition, measurement, presentation, and disclosure of the financial statements and explain
why auditors use them as the focal point of the audit.
Blooms: Remember
AACSB: Analytical Thinking
Accessibility: Keyboard Navigation
2) Cutoff tests designed to detect purchases made before the end of the year that have been
recorded in the subsequent year provide assurance about management's assertion of:
A) presentation and disclosure.
B) completeness.
C) rights and obligations.
D) existence.
Answer: B
Difficulty: 2 Medium
Topic: Management's Financial Statement Assertions
Learning Objective: 01-03 Describe and define the assertions that management makes about the
recognition, measurement, presentation, and disclosure of the financial statements and explain
why auditors use them as the focal point of the audit.
Blooms: Remember
AACSB: Analytical Thinking
Accessibility: Keyboard Navigation
1
Copyright © 2018 McGraw-Hill
, 3) During an audit of an entity's stockholders' equity accounts, the auditor determines whether
there are restrictions on retained earnings resulting from loans, agreements, or state law. This
audit procedure most likely is intended to verify management's assertion of:
A) existence or occurrence.
B) completeness.
C) valuation or allocation.
D) presentation and disclosure.
Answer: D
Difficulty: 2 Medium
Topic: Management's Financial Statement Assertions
Learning Objective: 01-03 Describe and define the assertions that management makes about the
recognition, measurement, presentation, and disclosure of the financial statements and explain
why auditors use them as the focal point of the audit.
Blooms: Remember
AACSB: Analytical Thinking
Accessibility: Keyboard Navigation
4) The confirmation of an account payable balance selected from the general ledger provides
primary evidence regarding which management assertion?
A) Completeness.
B) Valuation.
C) Allocation.
D) Existence.
Answer: D
Difficulty: 2 Medium
Topic: Management's Financial Statement Assertions
Learning Objective: 01-03 Describe and define the assertions that management makes about the
recognition, measurement, presentation, and disclosure of the financial statements and explain
why auditors use them as the focal point of the audit.
Blooms: Remember
AACSB: Analytical Thinking
Accessibility: Keyboard Navigation
5) What type of evidence would provide the highest level of assurance in an attestation
engagement?
A) Evidence secured solely from within the entity.
B) Evidence obtained from independent sources.
C) Evidence obtained indirectly.
D) Evidence obtained from multiple internal inquiries.
Answer: B
Difficulty: 3 Hard
Topic: Auditing, Attestation, and Assurance Services
Learning Objective: 01-02 Define and contrast financial statement auditing, attestation, and
assurance services.
Blooms: Remember
AACSB: Analytical Thinking
Accessibility: Keyboard Navigation
2
Copyright © 2018 McGraw-Hill
For Auditing and Assurance Services, 9th Edition By
Timothy Louwers, Penelope Bagley, Verified Chapter's 1
- 12, Complete Newest Version Updated A+
,Table Of Contents
Part One
The Contemporary Auditing Environment
1. Auditing And Assurance Services
2. Professional Standards
Part Two
The Financial Statement Audit
3. Engagement Planning;
4. Management Fraud And Audit Risk
5. Risk Assessment: Internal Control Evaluation
6. Employee Fraud And The Audit Of Cash
7. Revenue And Collection Cycle
8. Acquisition And Expenditure Cycle;
9. Production Cycle;
10. Finance And Investment Cycle
11. Completing The Audit
12. Reports On Audited Financial Statement
,Auditing & Assurance Services, 9e (Louwers)
Chapter 1 Auditing and Assurance Services
1) The audit objective that all transactions and accounts that should be presented in the financial
statements are in fact included is related to which of the PCAOB assertions?
A) Existence.
B) Rights and obligations.
C) Completeness.
D) Valuation.
Answer: C
Difficulty: 1 Easy
Topic: Management's Financial Statement Assertions
Learning Objective: 01-03 Describe and define the assertions that management makes about the
recognition, measurement, presentation, and disclosure of the financial statements and explain
why auditors use them as the focal point of the audit.
Blooms: Remember
AACSB: Analytical Thinking
Accessibility: Keyboard Navigation
2) Cutoff tests designed to detect purchases made before the end of the year that have been
recorded in the subsequent year provide assurance about management's assertion of:
A) presentation and disclosure.
B) completeness.
C) rights and obligations.
D) existence.
Answer: B
Difficulty: 2 Medium
Topic: Management's Financial Statement Assertions
Learning Objective: 01-03 Describe and define the assertions that management makes about the
recognition, measurement, presentation, and disclosure of the financial statements and explain
why auditors use them as the focal point of the audit.
Blooms: Remember
AACSB: Analytical Thinking
Accessibility: Keyboard Navigation
1
Copyright © 2018 McGraw-Hill
, 3) During an audit of an entity's stockholders' equity accounts, the auditor determines whether
there are restrictions on retained earnings resulting from loans, agreements, or state law. This
audit procedure most likely is intended to verify management's assertion of:
A) existence or occurrence.
B) completeness.
C) valuation or allocation.
D) presentation and disclosure.
Answer: D
Difficulty: 2 Medium
Topic: Management's Financial Statement Assertions
Learning Objective: 01-03 Describe and define the assertions that management makes about the
recognition, measurement, presentation, and disclosure of the financial statements and explain
why auditors use them as the focal point of the audit.
Blooms: Remember
AACSB: Analytical Thinking
Accessibility: Keyboard Navigation
4) The confirmation of an account payable balance selected from the general ledger provides
primary evidence regarding which management assertion?
A) Completeness.
B) Valuation.
C) Allocation.
D) Existence.
Answer: D
Difficulty: 2 Medium
Topic: Management's Financial Statement Assertions
Learning Objective: 01-03 Describe and define the assertions that management makes about the
recognition, measurement, presentation, and disclosure of the financial statements and explain
why auditors use them as the focal point of the audit.
Blooms: Remember
AACSB: Analytical Thinking
Accessibility: Keyboard Navigation
5) What type of evidence would provide the highest level of assurance in an attestation
engagement?
A) Evidence secured solely from within the entity.
B) Evidence obtained from independent sources.
C) Evidence obtained indirectly.
D) Evidence obtained from multiple internal inquiries.
Answer: B
Difficulty: 3 Hard
Topic: Auditing, Attestation, and Assurance Services
Learning Objective: 01-02 Define and contrast financial statement auditing, attestation, and
assurance services.
Blooms: Remember
AACSB: Analytical Thinking
Accessibility: Keyboard Navigation
2
Copyright © 2018 McGraw-Hill
