Auditing and Assurance Services 16th Edition by Alvin Arens Test Bank |ISBN: 9780134065823| Guide A+

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Auditing and Assurance Services

Alvin Arens

16th Edition
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, Table of Contents
Part 1 – The Auditing Profession
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1. The Demand for Audit and Other Assurance Services
2. The CPA Profession
3. Audit Reports
4. Professional Ethics
5. Legal Liability
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Part 2 – The Audit Process
6. Audit Responsibilities and Objectives
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7. Audit Evidence
8. Audit Planning and Materiality
9. Assessing the Risk of Material Misstatement
10. Assessing and Responding to Fraud Risks
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11. Internal Control and the COSO Framework
12. Assessing Control Risk and Reporting on Internal Controls
13. Overall Audit Strategy and Audit Program
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Part 3 – Application of the Audit Process to the Sales &
Collection Cycle
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14. Audit of the Sales and Collection Cycle: Tests of Controls and
Substantive Tests of Transactions
15. Audit Sampling for Tests of Controls and Substantive Tests of
Transactions
16. Completing the Tests in the Sales and Collection Cycle:
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Accounts Receivable
17. Audit Sampling for Tests of Details of Balances
Part 4 – Application of the Audit Process to Other Cycles
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18. Audit of the Acquisition and Payment Cycle: Tests of Controls,
Substantive Tests of Transactions, and Accounts Payable
19. Completing the Tests in the Acquisition and Payment Cycle:
Verification of Selected Accounts
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20. Audit of the Payroll and Personnel Cycle
21. Audit of the Inventory and Warehousing Cycle
22. Audit of the Capital Acquisition and Repayment Cycle
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23. Audit of Cash and Financial Instruments
Part 5 – Completing the Audit
24. Completing the Audit
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Part 6 – Other Assurance & Non-assurance Services
25. Other Assurance Services
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26. Internal and Governmental Financial Auditing and Operational
Auditing

, Auditing and Assurance Services, 16e (Arens/Elder/Beasley)
Chapter 1 The Demand for Audit and Other Assurance Services
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1.1 Learning Objective 1-1

1) In the auditing process
A) the types and amounts of evidence remain constant from audit to audit.
B) the criteria for evaluating information will not vary depending on the information being
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audited.
C) the audit report communicates the auditor's findings to users.
D) records are gathered by the auditor to determine whether the audited information is stated in
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accordance with SEC standards.
Answer: C
Terms: Audit process
Diff: Moderate
Objective: LO 1-1
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AACSB: Reflective thinking

2) Which of the following is considered audit evidence?
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A)
Oral statements Written Auditor
made by management Communications Observation
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Y N N

B)
Oral statements Written Auditor
made by management Communications Observation
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N Y Y

C)
Oral statements Written Auditor
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made by management Communications Observation
Y Y Y

D)
Oral statements Written Auditor
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made by management Communications Observation
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Answer: C
Terms: Audit evidence
Diff: Easy
Objective: LO 1-1
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AACSB: Reflective thinking
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, 3) Which of the following can be used as a criteria for evaluating information being audited?
A) International Financial Reporting Standards (IFRS)
B) Generally Accepted Accounting Principles (GAAP)
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C) Internal Revenue Code (IRC)
D) all of the above
Answer: D
Terms: Criteria by which an auditor evaluates information
Diff: Moderate
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Objective: LO 1-1
AACSB: Reflective thinking
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4) Evidence is paramount to audit and attestation engagements. List the four basic types of audit
evidence.
Answer: The four types of audit and attestation evidence include
1. Electronic and documentary data about transactions
2. Written and electronic communications with outsiders
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3. Observations by the auditor
4. Oral testimony of the auditee (client)
Terms: Basic types of audit evidence
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Diff: Easy
Objective: LO 1-1
AACSB: Reflective thinking
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5) The criteria by which an auditor evaluates the information under audit may vary with the
information being audited.
Answer: TRUE
Terms: Criteria by which an auditor evaluates information
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Diff: Easy
Objective: LO 1-1
AACSB: Reflective thinking
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6) One criteria used by an external auditor to evaluate published financial statements is known as
generally accepted auditing standards.
Answer: FALSE
Terms: Criteria used by external auditor to evaluate published financial statements
Diff: Easy
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Objective: LO 1-1
AACSB: Reflective thinking
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7) Auditors strive to maintain a high level of independence to keep the confidence of users
relying on their reports.
Answer: TRUE
Terms: Independence
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Diff: Easy
Objective: LO 1-1
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AACSB: Reflective thinking

8) To perform an audit, there must be information in a verifiable form and some criteria by
which the auditor can evaluate the information.