TESTBANK g
For Auditing & Assurance Services: A
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Systematic Approach, 12th Edition
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Chapters 1 - 21 Complete
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, CONTENTS
Chapter 1: An Introduction to Assurance and Financial Statement Auditing
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Chapter 2: The Financial Statement Auditing Environment
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Chapter 3: Audit Planning, Types ofAudit Tests, and Materiality
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Chapter 4: Risk Assessment
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Chapter 5: Evidence and Documentation
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Chapter 6: Internal Control in a Financial Statement Audit Chapter
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7: Auditing Internal Control over Financial Reporting
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Chapter 8: Audit Sampling: An Overview and Application to Tests of Controls Chapter 9:
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Audit Sampling: An Application to Substantive Tests of Account Balances Chapter 10:
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Auditing the Revenue Process
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Chapter 11: Auditing the Purchasing Process
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Chapter 12: Auditing the Human Resource Management Process
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Chapter 13: Auditing the Inventory Management Process
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Chapter 14: Auditing the Financing/Investing Process: Prepaid Expenses, Intangible Assets, and
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Property, Plant, and Equipment
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Chapter 15: Auditing the Financing/Investing Process: Long-TermLiabilities, Stockholders’ Equity,
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and Income Statement Accounts
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Chapter 16: Auditing the Financing/Investing Process: Cash and Investments
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Chapter 17: Completing the Audit Engagement
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Chapter 18: Reports on Audited Financial Statements
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Chapter 19: Professional Conduct, Independence, and Quality Management
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Chapter 20: Legal Liability
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Chapter 21: Assurance, Attestation, and Internal Auditing Services
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,Auditing & Assurance Services: A Systematic Approach, 12e (Messier)
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Chapter 1 An Introduction to Assurance and Financial Statement Auditing
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1) Auditing focuses onrules, techniques, and computations required to prepare and analyze
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financial information.
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ANSWER: FALSE g
Difficulty: 1 Easy g g
Topic: The Importance for Studying Auditing
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Learning Objective: 01-01 Understand why studying auditing can be valuable to you whether or not
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you plan to become an auditor, and why it is different from studying accounting.
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Bloom's: Remember g
AACSB: Communication
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AICPA: BB Legal; FN Decision Making
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2) Decision makers demand reliable information that is provided by accountants.
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ANSWER: TRUE g
Difficulty: 1 Easy g g
Topic: The Demand for Auditing and Assurance
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Learning Objective: 01-02 Understand the demand for auditing and be able to explain the desired
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characteristics ofauditors and audit services through an analogyto a house inspector and a house
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inspection service.
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Bloom's: Understand g
AACSB: Communication
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AICPA: FN Decision Making; BB Industry
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3) Information asymmetry seldom occurs. g g g
ANSWER: FALSE g
Difficulty: 2 Medium g g
Topic: The Demand for Auditing and Assurance
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Learning Objective: 01-02 Understand the demand for auditing and be able to explain the desired
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characteristics ofauditors and audit services through an analogyto a house inspector and a house
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inspection service.
g g
Bloom's: Apply g
AACSB: Communication g
AICPA: BB Industry; FN Reporting
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, 4) Conflicts of interest often occur between absentee owners and managers.
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ANSWER: TRUE g
Difficulty: 2 Medium g g
Topic: The Demand for Auditing and Assurance
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Learning Objective: 01-02 Understand the demand for auditing and be able to explain the desired
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characteristics ofauditors and audit services through an analogyto a house inspector and a house
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inspection service.
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Bloom's: Apply g
AACSB: Communication g
AICPA: BB Industry; FN Reporting
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5) Auditing services and attestation services are the same.
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ANSWER: FALSE g
Difficulty: 1 Easy g g
Topic: Auditing, Attest, and Assurance Services Defined
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Learning Objective: 01-03 Understand the relationships among auditing, attestation, and assurance
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services.
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Bloom's: Understand g
AACSB: Communication
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AICPA: BB Industry; FN Reporting
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6) Auditing is a type of attest service. g g g g g g
ANSWER: TRUE g
Difficulty: 1 Easy g g
Topic: Auditing, Attest, and Assurance Services Defined
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Learning Objective: 01-03 Understand the relationships among auditing, attestation, and assurance
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services.; 01-04 Know the basic definition of a financial statement audit.
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Bloom's: Understand g
AACSB: Communication
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AICPA: BB Industry; FN Reporting
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7) Testing all transactions that occurred during the period is cost prohibitive.
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ANSWER: TRUE g
Difficulty: 2 Medium g g
Topic: TheAuditProcess
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Learning Objective: 01-06 Be able to explain whyon most audit engagements an auditor tests only a
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sample of transactions that occurred.
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Bloom's: Apply g
AACSB: Communication g
AICPA: FN Decision Making; BB Critical Thinking
g g g g g g
For Auditing & Assurance Services: A
g g g g g g g
Systematic Approach, 12th Edition
g g g g g
Chapters 1 - 21 Complete
g g g g
, CONTENTS
Chapter 1: An Introduction to Assurance and Financial Statement Auditing
g g g g g g g g g
Chapter 2: The Financial Statement Auditing Environment
g g g g g g g
Chapter 3: Audit Planning, Types ofAudit Tests, and Materiality
g g g g g g g g g
Chapter 4: Risk Assessment
g g g g
Chapter 5: Evidence and Documentation
g g g g
Chapter 6: Internal Control in a Financial Statement Audit Chapter
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7: Auditing Internal Control over Financial Reporting
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Chapter 8: Audit Sampling: An Overview and Application to Tests of Controls Chapter 9:
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Audit Sampling: An Application to Substantive Tests of Account Balances Chapter 10:
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Auditing the Revenue Process
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Chapter 11: Auditing the Purchasing Process
g g g g g
Chapter 12: Auditing the Human Resource Management Process
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Chapter 13: Auditing the Inventory Management Process
g g g g g g g
Chapter 14: Auditing the Financing/Investing Process: Prepaid Expenses, Intangible Assets, and
g g g g g g g g g g
Property, Plant, and Equipment
g g g g
Chapter 15: Auditing the Financing/Investing Process: Long-TermLiabilities, Stockholders’ Equity,
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and Income Statement Accounts
g g g g
Chapter 16: Auditing the Financing/Investing Process: Cash and Investments
g g g g g g g g
Chapter 17: Completing the Audit Engagement
g g g g g g
Chapter 18: Reports on Audited Financial Statements
g g g g g g
Chapter 19: Professional Conduct, Independence, and Quality Management
g g g g g g g
Chapter 20: Legal Liability
g g g g
Chapter 21: Assurance, Attestation, and Internal Auditing Services
g g g g g g g
,Auditing & Assurance Services: A Systematic Approach, 12e (Messier)
g g g g g g g g
Chapter 1 An Introduction to Assurance and Financial Statement Auditing
g g g g g g g g g
1) Auditing focuses onrules, techniques, and computations required to prepare and analyze
g g g g g g g g g g g
financial information.
g g
ANSWER: FALSE g
Difficulty: 1 Easy g g
Topic: The Importance for Studying Auditing
g g g g g
Learning Objective: 01-01 Understand why studying auditing can be valuable to you whether or not
g g g g g g g g g g g g g g
you plan to become an auditor, and why it is different from studying accounting.
g g g g g g g g g g g g g g
Bloom's: Remember g
AACSB: Communication
g g
AICPA: BB Legal; FN Decision Making
g g g g g
2) Decision makers demand reliable information that is provided by accountants.
g g g g g g g g g
ANSWER: TRUE g
Difficulty: 1 Easy g g
Topic: The Demand for Auditing and Assurance
g g g g g g
Learning Objective: 01-02 Understand the demand for auditing and be able to explain the desired
g g g g g g g g g g g g g g
characteristics ofauditors and audit services through an analogyto a house inspector and a house
g g g g g g g g g g g g g g g g
inspection service.
g g
Bloom's: Understand g
AACSB: Communication
g g
AICPA: FN Decision Making; BB Industry
g g g g g
3) Information asymmetry seldom occurs. g g g
ANSWER: FALSE g
Difficulty: 2 Medium g g
Topic: The Demand for Auditing and Assurance
g g g g g g
Learning Objective: 01-02 Understand the demand for auditing and be able to explain the desired
g g g g g g g g g g g g g g
characteristics ofauditors and audit services through an analogyto a house inspector and a house
g g g g g g g g g g g g g g g g
inspection service.
g g
Bloom's: Apply g
AACSB: Communication g
AICPA: BB Industry; FN Reporting
g g g g
, 4) Conflicts of interest often occur between absentee owners and managers.
g g g g g g g g g
ANSWER: TRUE g
Difficulty: 2 Medium g g
Topic: The Demand for Auditing and Assurance
g g g g g g
Learning Objective: 01-02 Understand the demand for auditing and be able to explain the desired
g g g g g g g g g g g g g g
characteristics ofauditors and audit services through an analogyto a house inspector and a house
g g g g g g g g g g g g g g g g
inspection service.
g g
Bloom's: Apply g
AACSB: Communication g
AICPA: BB Industry; FN Reporting
g g g g
5) Auditing services and attestation services are the same.
g g g g g g g
ANSWER: FALSE g
Difficulty: 1 Easy g g
Topic: Auditing, Attest, and Assurance Services Defined
g g g g g g
Learning Objective: 01-03 Understand the relationships among auditing, attestation, and assurance
g g g g g g g g g g
services.
g
Bloom's: Understand g
AACSB: Communication
g g
AICPA: BB Industry; FN Reporting
g g g g
6) Auditing is a type of attest service. g g g g g g
ANSWER: TRUE g
Difficulty: 1 Easy g g
Topic: Auditing, Attest, and Assurance Services Defined
g g g g g g
Learning Objective: 01-03 Understand the relationships among auditing, attestation, and assurance
g g g g g g g g g g
services.; 01-04 Know the basic definition of a financial statement audit.
g g g g g g g g g g g
Bloom's: Understand g
AACSB: Communication
g g
AICPA: BB Industry; FN Reporting
g g g g
7) Testing all transactions that occurred during the period is cost prohibitive.
g g g g g g g g g g
ANSWER: TRUE g
Difficulty: 2 Medium g g
Topic: TheAuditProcess
g g g g
Learning Objective: 01-06 Be able to explain whyon most audit engagements an auditor tests only a
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sample of transactions that occurred.
g g g g g
Bloom's: Apply g
AACSB: Communication g
AICPA: FN Decision Making; BB Critical Thinking
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