TEST BANK For Louwers, Auditing and Assurance Services
9th Edition, by Louwers, Bagley| All Chapters 1-12
Covered|100% Complete A+ Study Guide Latest Version
2026
FULL TEST BANK!!!
1|Page
, 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
2|Page
, 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
3|Page
, 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
4|Page
9th Edition, by Louwers, Bagley| All Chapters 1-12
Covered|100% Complete A+ Study Guide Latest Version
2026
FULL TEST BANK!!!
1|Page
, 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
2|Page
, 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
3|Page
, 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
4|Page
