Test Bank for Auditing: A Practical Approach with Data Analytics, 2nd Edition by Raymond N. Johnson, Laura D. Wiley, Robyn Moroney | Latest 2025/2026 Update

TEST BANK Auditing: A Practical Approach with Data Analytics
2nd Edition by Laura Davis Wiley, Johnson and Moroney
All Chapters 1-16

, TABLE OF CONTENTS

Chapter 1 Introduction and Overview of Audit and Assurance

Chapter 2 Professionalism and Professional Responsibilities

Chapter 3 Risk Assessment Part I: Audit Risk and Audit Strategy

Chapter 4 Risk Assessment Part II: Understanding the Client

Chapter 5 Audit Evidence

Chapter 6 Gaining an Understanding of the Client's System of Internal Control

Chapter 7 Risk Response: Performing Tests of Controls


Chapter 8 Audit Data Analytics


Chapter 9 Risk Response: Performing Substantive Procedures

Chapter 10 Risk Response: Audit Sampling for Substantive Procedures

Chapter11 Auditing the Revenue Process

Chapter 12 Auditing the Purchasing and Payroll Processes

Chapter 13 Auditing Cash, Inventory and Related Income Statement Accounts

Chapter 14 Auditing Investing and Financing Activities

Chapter 15 Completing the Audit


Chapter 16 Reporting on the Audit

,Questions Type: True or False
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Chapter 1 Introduction and Overview of Audit and Assurance
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1. GAAP and IFRS are examples of applicable financial reporting framework.
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A. True
B. False
Answer: A, Taxonomy: Knowledge, Difficulty: Easy, AICPA FC: Reporting, AACSB: Communication, Learning
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V Objective: LO1.1, Solution: The applicable financial reporting framework refers to the set of standards used
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in preparing the historical financial statements, such as GAAP, IFRS or a Federal Income Tax Basis of
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Accounting.
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2. Review of financial forecasts falls under attestation services.
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A. True
B. False
Answer: A, Taxonomy: Knowledge, Difficulty: Easy, AICPA FC: Measurement Analysis and Interpretation,
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VAACSB: Ethics, Learning Objective: LO1.1, Solution: Attestation services (under the umbrella of assurance
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Vservices) include review of historical financial statements, review of financial forecasts, and examination of
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V internal control. V




3. Within a U.S. context, the applicable financial reporting framework is typically Generally Accepted
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VAccounting Principles (GAAP). V V




A. True
B. False
Answer: A, Taxonomy: Knowledge, Difficulty: Easy, AICPA FC: Measurement Analysis and Interpretation,
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VAACSB: Ethics, Learning Objective: LO1.2, Solution: Within a U.S. context, the applicable financial reporting
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Vframework is typically generally accepted accounting principles (GAAP).
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4. Private companies, or non-issuers, are not required by the U.S. government to have an annual
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Vfinancial statement audit V V




A. True
B. False
Answer: A, Taxonomy: Knowledge, Difficulty: Easy, AICPA FC: Reporting, AACSB: Analytic, Learning Objective:
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VLO1.2, Solution: Private companies, or non-issuers, are not required by the
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U.S. government to have an annual financial statement audit, but often other interested users, such as a bank
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or lender, may request that a private company provide audited financial statements.
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, 5. One of the reasons there is a demand for financial statement audits is that users of
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financial statements often lack accounting and legal knowledge to fully understand
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complex accounting and disclosure choices.
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A. True
B. False
Answer: A, Taxonomy: Comprehension, Difficulty: Easy, AICPA PC: Communication, AACSB: Analytic,
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Learning Objective: LO1.3, Solution: Complexity: Financial statements are complex, the amounts are often
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affected by significant estimates, and the disclosures often require significant knowledge and experience to
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evaluate. Most financial statement users do not have the accounting and legal knowledge to assess the
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reasonableness of complex accounting and disclosure choices being made by the company.
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6. In financial accounting, the balance sheet is a statement of financial position
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A. True
B. False
Answer: A, Taxonomy: Knowledge, Difficulty: Easy, AICPA PC: Communication, AACSB: Analytic, Learning
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VObjective: LO1.3, Solution: In financial accounting, the financial statements include the balance sheet
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(statement of financial position), income statement (statement of comprehensive income), statement of
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cash flows, statement of changes in equity and accompanying notes.
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7. Business valuation falls within the purview of non-assurance services.
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A. True
B. False
Answer: A, Taxonomy: Knowledge, Difficulty: Easy, AICPA FC: Measurement Analysis and Interpretation,
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VAACSB: Analytic, Learning Objective: LO1.4, Solution: Many of these accounting firms provide non-assurance
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(or non-audit) services as well as assurance services. These non- assurance services include management
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Vconsulting, business valuation, mergers and acquisitions, insolvency, tax and accounting services.
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