AUDITING AND ASSURANCE SERVICES A
SYSTEMATIC APPROACH 12TH EDITION
WILLIAM MESSIER TEST BANK
CERTIFICATION REVIEW SET 2026
ANSWERS GUARANTEED PASS
⫸ 2) For financial statement audits, auditors need to understand controls
that are relevant to the audit in order to
A) identify and assess the risks of material misstatements.
B) perform preliminary analytical procedures.
C) detect fraud.
D) assess inherent risk. Answer: A
⫸ 3) Narratives, flowcharts, and internal control questionnaires are
three common methods of
A) testing the internal controls.
B) documenting the auditor's understanding of internal controls.
C) designing the audit manual and procedures.
D) documenting the auditor's understanding of a client's organizational
structure. Answer: B
⫸ 4) When dealing with the documentation of internal control,
,A) in a narrative, most questions simply require a "yes" or "no"
response.
B) questionnaires offer useful checklists to remind the auditor of the
many different types of internal controls that should exist.
C) questionnaires and flowcharts should not be used together.
D) flowcharts fail to show the segregation of duties in the company.
Answer: B
⫸ 5) Which type of evidence is not used by the auditor to obtain an
understanding of the design and implementation of internal control?
A) inquiry
B) observation
C) confirmation
D) inspection Answer: C
⫸ 20) Name four types of evidence which the auditor uses to obtain an
understanding of the design and implementation of controls. Answer:
Inspection; inquiries of client personnel; observation of employees
performing control processes; and reperformance by tracing one or a few
transactions through the accounting system from the start to the finish.
⫸ 21) Name three types of documents which auditors commonly use to
obtain and to document their understanding in the audit working paper
of the design of internal controls. Answer: Narratives; flowcharts; and
internal control questionnaires
, ⫸ 22) A proper narrative of an accounting system and the related
controls should include which four characteristics? Answer: The origin
of every document and record in the system; the processing that takes
place; the disposition of every document and record in the system; and
an indication of the controls relevant to the control risk (including
separation of duties; authorizations and approvals, and internal
verification performed by the client.
⫸ When making a preliminary assessment of control risk, the starting
point for most auditors is
A) IT assessment controls.
B) assessment of entity level controls.
C) transaction-related controls.
D) fraud controls. Answer: B
⫸ 2) You are performing the audit of internal control for Clifton
Company. Which of the following would represent a material weakness
in internal control?
A) The company's audit committee has experienced an unusual turnover
of members.
B) The company's CFO was indicted for embezzling from the company.
C) Bank reconciliations are done monthly.
D) The CEO retired after twenty years of service to the company.
Answer: B
SYSTEMATIC APPROACH 12TH EDITION
WILLIAM MESSIER TEST BANK
CERTIFICATION REVIEW SET 2026
ANSWERS GUARANTEED PASS
⫸ 2) For financial statement audits, auditors need to understand controls
that are relevant to the audit in order to
A) identify and assess the risks of material misstatements.
B) perform preliminary analytical procedures.
C) detect fraud.
D) assess inherent risk. Answer: A
⫸ 3) Narratives, flowcharts, and internal control questionnaires are
three common methods of
A) testing the internal controls.
B) documenting the auditor's understanding of internal controls.
C) designing the audit manual and procedures.
D) documenting the auditor's understanding of a client's organizational
structure. Answer: B
⫸ 4) When dealing with the documentation of internal control,
,A) in a narrative, most questions simply require a "yes" or "no"
response.
B) questionnaires offer useful checklists to remind the auditor of the
many different types of internal controls that should exist.
C) questionnaires and flowcharts should not be used together.
D) flowcharts fail to show the segregation of duties in the company.
Answer: B
⫸ 5) Which type of evidence is not used by the auditor to obtain an
understanding of the design and implementation of internal control?
A) inquiry
B) observation
C) confirmation
D) inspection Answer: C
⫸ 20) Name four types of evidence which the auditor uses to obtain an
understanding of the design and implementation of controls. Answer:
Inspection; inquiries of client personnel; observation of employees
performing control processes; and reperformance by tracing one or a few
transactions through the accounting system from the start to the finish.
⫸ 21) Name three types of documents which auditors commonly use to
obtain and to document their understanding in the audit working paper
of the design of internal controls. Answer: Narratives; flowcharts; and
internal control questionnaires
, ⫸ 22) A proper narrative of an accounting system and the related
controls should include which four characteristics? Answer: The origin
of every document and record in the system; the processing that takes
place; the disposition of every document and record in the system; and
an indication of the controls relevant to the control risk (including
separation of duties; authorizations and approvals, and internal
verification performed by the client.
⫸ When making a preliminary assessment of control risk, the starting
point for most auditors is
A) IT assessment controls.
B) assessment of entity level controls.
C) transaction-related controls.
D) fraud controls. Answer: B
⫸ 2) You are performing the audit of internal control for Clifton
Company. Which of the following would represent a material weakness
in internal control?
A) The company's audit committee has experienced an unusual turnover
of members.
B) The company's CFO was indicted for embezzling from the company.
C) Bank reconciliations are done monthly.
D) The CEO retired after twenty years of service to the company.
Answer: B
