TEST iBANK iFOR i AUDITING i& ASSURANCE iSERVICES:
i A
i
SYSTEMATIC APPROACH 12TH EDITION
iv i i i BY
i
WILLIAM MESSIER, STEVEN GLOVER
iv i vi vi
Chapter 01 v Answers Included ✅
v vi
12e
v
1) Why vdo vauditors voften vuse va vsampling vapproach vto vevidence vgathering?
A) Auditors v are v experts v and v do v not v need v to v look v at v much v to v know
v whether vthe vfinancial vstatements vare vcorrect vor vnot.
B) Auditors v must v balance v the v cost v of v the v audit v with v the v need v for
v precision vand v for v some v types v of v evidence, v computer v data v analytic v approaches
v can’t v be v used.
C) Auditors v must v limit v their v exposure v to v their v auditee v to v maintain v independence.
D) The vauditor's vrelationship vwith vthe vauditee v is vgenerally vadversarial, vso vthe
v auditor v will v not v have v access v to v all v of v the v financial v information v of v the
v company.
2) Which vof vthe vfollowing vstatements vbest vdescribes va vrelationship vbetween
v sample vsize vand v other velements vof vauditing?
A) If vmateriality vincreases, vso vwill vthe vsample vsize.
B) If v the v desired v level v of v assurance v increases, v sample v sizes v can v be v smaller.
C) If vmateriality vdecreases, vsample vsize vwill vneed vto vincrease.
D) There vis vno vrelationship vbetween vsample vsize vand vmateriality vor vthe
v desired vlevel vof vassurance.
3) Which v of v the v following v statements v about v the v study v of v auditing v is v NOT v true?
A) The vstudy v of v auditing v can v be v valuable v to v future v accountants
v and vbusiness v decision v makers v whether v or v not v they v plan v to v become
v auditors.
B) The vstudy vof vauditing vfocuses von vlearning vthe vanalytical vand vlogical
vskills vnecessary vto vevaluate vthe vrelevance vand vreliability vof vinformation.
C) The vstudy vof vauditing vfocuses von vlearning vthe vrules, vtechniques,
vand vcomputations v required vto vanalyze vfinancial vstatements vfor vmaking
1
,vinvestment vrecommendations.
D) The vstudy vof vauditing vbegins vwith vthe vunderstanding vof va vcoherent
vlogical vframework vand vtechniques vuseful vfor vgathering vand vanalyzing vevidence
vabout vothers’
2
,assertions.
4) The vbasic vdefinition vof vauditing vessentially vindicates vthat, voverall, vauditing vis va vprocess vto:
3
, A) detect vfraud.
B) examine vindividual vtransactions vso v that vthe v auditor vmay vcertify vas vto vtheir
v validity.
C) objectively vobtain vand vevaluate vevidence vregarding vassertions vmade
vby vanother vparty.
D) assure v the v consistent v application v of v correct v accounting v procedures.
5) Assurance vservices vmay vimprove vall vof vthe vfollowing vexcept:
A) relevance.
B) credibility.
C) periodicity.
D) reliability.
6) Evidence vis vreliable vif vit:
A) signals v the v true v state v of v a v management v assertion.
B) applies vto vthe vperiod vbeing vaudited.
C) relates v to v the v audit v assertion v being v tested.
D) is v sufficient v to v justify v a v conclusion.
7) Which v of v the v following v best v describes v the v concept v of v audit v risk?
A) The vrisk vof vthe vauditor vbeing vsued vbecause vof vassociation vwith van vauditee.
B) The vrisk vthat vthe vauditor vwill vprovide van vinappropriate vopinion
von vfinancial vstatements vthat vare, vin vfact, vmaterially vmisstated.
C) The voverall vrisk vthat va vmaterial vmisstatement vexists vin vthe vfinancial
vstatements.
D) The v risk v that v auditors v use v audit v procedures v that v are v inappropriate.
4
i A
i
SYSTEMATIC APPROACH 12TH EDITION
iv i i i BY
i
WILLIAM MESSIER, STEVEN GLOVER
iv i vi vi
Chapter 01 v Answers Included ✅
v vi
12e
v
1) Why vdo vauditors voften vuse va vsampling vapproach vto vevidence vgathering?
A) Auditors v are v experts v and v do v not v need v to v look v at v much v to v know
v whether vthe vfinancial vstatements vare vcorrect vor vnot.
B) Auditors v must v balance v the v cost v of v the v audit v with v the v need v for
v precision vand v for v some v types v of v evidence, v computer v data v analytic v approaches
v can’t v be v used.
C) Auditors v must v limit v their v exposure v to v their v auditee v to v maintain v independence.
D) The vauditor's vrelationship vwith vthe vauditee v is vgenerally vadversarial, vso vthe
v auditor v will v not v have v access v to v all v of v the v financial v information v of v the
v company.
2) Which vof vthe vfollowing vstatements vbest vdescribes va vrelationship vbetween
v sample vsize vand v other velements vof vauditing?
A) If vmateriality vincreases, vso vwill vthe vsample vsize.
B) If v the v desired v level v of v assurance v increases, v sample v sizes v can v be v smaller.
C) If vmateriality vdecreases, vsample vsize vwill vneed vto vincrease.
D) There vis vno vrelationship vbetween vsample vsize vand vmateriality vor vthe
v desired vlevel vof vassurance.
3) Which v of v the v following v statements v about v the v study v of v auditing v is v NOT v true?
A) The vstudy v of v auditing v can v be v valuable v to v future v accountants
v and vbusiness v decision v makers v whether v or v not v they v plan v to v become
v auditors.
B) The vstudy vof vauditing vfocuses von vlearning vthe vanalytical vand vlogical
vskills vnecessary vto vevaluate vthe vrelevance vand vreliability vof vinformation.
C) The vstudy vof vauditing vfocuses von vlearning vthe vrules, vtechniques,
vand vcomputations v required vto vanalyze vfinancial vstatements vfor vmaking
1
,vinvestment vrecommendations.
D) The vstudy vof vauditing vbegins vwith vthe vunderstanding vof va vcoherent
vlogical vframework vand vtechniques vuseful vfor vgathering vand vanalyzing vevidence
vabout vothers’
2
,assertions.
4) The vbasic vdefinition vof vauditing vessentially vindicates vthat, voverall, vauditing vis va vprocess vto:
3
, A) detect vfraud.
B) examine vindividual vtransactions vso v that vthe v auditor vmay vcertify vas vto vtheir
v validity.
C) objectively vobtain vand vevaluate vevidence vregarding vassertions vmade
vby vanother vparty.
D) assure v the v consistent v application v of v correct v accounting v procedures.
5) Assurance vservices vmay vimprove vall vof vthe vfollowing vexcept:
A) relevance.
B) credibility.
C) periodicity.
D) reliability.
6) Evidence vis vreliable vif vit:
A) signals v the v true v state v of v a v management v assertion.
B) applies vto vthe vperiod vbeing vaudited.
C) relates v to v the v audit v assertion v being v tested.
D) is v sufficient v to v justify v a v conclusion.
7) Which v of v the v following v best v describes v the v concept v of v audit v risk?
A) The vrisk vof vthe vauditor vbeing vsued vbecause vof vassociation vwith van vauditee.
B) The vrisk vthat vthe vauditor vwill vprovide van vinappropriate vopinion
von vfinancial vstatements vthat vare, vin vfact, vmaterially vmisstated.
C) The voverall vrisk vthat va vmaterial vmisstatement vexists vin vthe vfinancial
vstatements.
D) The v risk v that v auditors v use v audit v procedures v that v are v inappropriate.
4
