Test Bank for Auditing and Assurance Services 16th Edition – Arens, Elder & Beasley | 2025/2026 Latest Update

[TEST BANK]
AUDITING AND
ASSURANCE
SERVICES, 16TH
EDITION BY
ARENS, ELDER,
BEAS LEY,HOGAN
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,Auditing and Assurance Services, (Arens)
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Chapter 1 The Demand for Audit and Other Assurance Services
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Learning Objective 1-1q q q q




1) The Sarbanes-Oxley Act applies to which of the following companies?
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A) All companies
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B) Privately held companies q q q q


C) Public companies q q


D) All public companies and privately held companies with assets greater than
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q q$500 million Answer: C
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Terms: Sarbanes-
Oxley Act Diff: Easy
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Objective: LO 1-1 q q


AACSB:
Reflective thinking skills qq qq qq


Topic: SOX

2) Which of the following is considered a
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udit evidence? A)
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Oral statements m
qq Written Comm qq qq Auditor Obser qq


ade by
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management
Y N N

B)
Oral statements
qq qq Written Comm qq Auditor Obser qq


made by manageme
qq qq unications vation
nt
N Y Y

C)
Oral statements m
qq qq Written Comm qq Auditor Obser qq


ade by
qq unications vation
management
Y Y Y

D)
Oral statements
qq qq Written Comm qq Auditor Obser qq


made by manageme
qq qq unications vation
nt
N N Y

Answer: C
Terms:
Audit evidence qq qq


Diff:
1

, Moderate Objec
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tive: LO 1-1
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AACSB: Reflective thinking skills
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1

, 3) Evidence is paramount to audit and attestation engagements. List the four basic
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types of audit evidence.
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Answer: The four types of audit and attestation evidence include:
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1. Electronic and documentary data about transactions
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2. Written and electronic communications with outsiders
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3. Observations by the auditor q q q q q q


4. Oral testimony of the auditee
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(client) Terms:
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Basic types of audit evidenc q q q q qq q q


e Diff:
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LO 1-1 q q


AACSB: Reflective thinking skills q q q q




4) The criteria by which an auditor evaluates the information under audit ma
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y vary with the information being audited.
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A) True
B) False qq


Answer:
A
Terms:
Criteria which an auditor evaluat qq qq q q qq


es information Diff:
qq Easy q q


Objective: LO 1-1 q q


AACSB: Reflective thinking skills q q q q




5) The criteria used by an external auditor to evaluate published financial stateme
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nts are known as generally accepted auditing standards.
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A) True
B) False qq


Answer:
B
Terms:
Criteria used by external auditor to evaluate published finaq q q q q q q q q q q q q q q q


ncial statements Diff: Easy
qq q q


Objective: LO 1-1 q q


AACSB: Reflective thinking skills q q q q




6) The Sarbanes- q q


Oxley Act establishes standards related to the audits of privately held com
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panies.
A) True
B) False qq


Answer:
B
Terms: Sarbanes-
Oxley Act Diff: Easy qq qq


Objective: LO 1-1 q q


AACSB:
2