Complete Verified Test Bank for Auditing & Assurance Services (12th Edition, Messier & Glover) – Chapters 1–21

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Test Bank for Auditing Assurance Services A Systematic Approach
12th Edition

By William Messier Jr Steven Glover

All Chapters (1 – 21) | Q&A Verified | Grade A+

ISBN 9781264100675




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TABLE OF CONTENTS
Chapter 1 An Introduction to Assurance and Financial Statement Auditing ................ 3
Chapter 2 The Financial Statement Auditing Environment ........................................ 26
Chapter 3 Audit Planning, Types of Audit Tests, and Materiality ............................... 55
Chapter 4 Risk Assessment ......................................................................................... 85
Chapter 5 Evidence and Documentation.................................................................... 111
Chapter 6 Internal Control in a Financial Statement Audit....................................... 151
Chapter 7 Auditing Internal Control over Financial Reporting ................................ 192
Chapter 8 Audit Sampling: An Overview and Application to Tests of Controls ......... 219
Chapter 9 Audit Sampling: An Application to Substantive Tests of Account Balances
.................................................................................................................................. 248
Chapter 10 Auditing the Revenue Process ................................................................ 271
Chapter 11 Auditing the Purchasing Process ............................................................ 312
Chapter 12 Auditing the Human Resource Management Process ............................ 352
Chapter 13 Auditing the Inventory Management Process ........................................ 380
Chapter 14 Auditing the Financing/Investing Process: Prepaid Expenses, Intangible
Assets, and Property, Plant, and Equipment ............................................................. 410
Chapter 15 Auditing the Financing/Investing Process: Long-Term Liabilities,
Stockholders' Equity, and Income Statement Accounts ............................................ 440
Chapter 16 Auditing the Financing/Investing Process: Cash and Investments ........ 467
Chapter 17 Completing the Audit Engagement ......................................................... 496
Chapter 18 Reports on Audited Financial Statements .............................................. 533
Chapter 19 Professional Conduct, Independence, and Quality Control .................... 567
Chapter 20 Legal Liability ......................................................................................... 597
Chapter 21 Assurance, Attestation, and Internal Auditing Services ......................... 625




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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.
CORRECT 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.
CORRECT 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.
CORRECT 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


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4) Conflicts of interest often occur between absentee owners and managers.
CORRECT 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.
CORRECT 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.


CORRECT 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.
CORRECT 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.

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