Auditing & Assurance Services
M M M
TEST BANK
M M
Auditing & Assurance Services: A Systematic
M M M M M M
Approach, 11th Edition Chapters 1 - 21
M M M M M M M
,Auditing & Assurance Services
M M M
ChapterM1:MAnMIntroductionMtoMAssuranceMandMFinancialMStatementMAuditing
ChapterM2:MTheMFinancialMStatementMAuditingMEnvironment
ChapterM3:MAuditMPlanning,MTypesMofMAuditMTests,MandMMateriality
ChapterM4:MRiskMAssessment
ChapterM5:MEvidenceMandMDocumentation
ChapterM6:MInternalMControlMinMaMFinancialMStatementMAudit
ChapterM7:MAuditingMInternalMControlMoverMFinancialMReporting
ChapterM8:MAuditMSampling:MAnMOverviewMandMApplicationMtoMTestsMofMControls
ChapterM9:MAuditMSampling:MAnMApplicationMtoMSubstantiveMTestsMofMAccountMBalances
ChapterM10:MAuditingMtheMRevenueMProcess
ChapterM11:MAuditingMtheMPurchasingMProcess
ChapterM12:MAuditingMtheMHumanMResourceMManagementMProcess
ChapterM13:MAuditingMtheMInventoryMManagementMProcess
ChapterM14:MAuditingMtheMFinancing/InvestingMProcess:MPrepaidMExpenses,MIntangibleMAssets
,MandMProperty,MPlant,MandMEquipment
ChapterM15:MAuditingMtheMFinancing/InvestingMProcess:MLong-
TermMLiabilities,MStockholders’MEquity,MandMIncomeMStatementMAccounts
ChapterM16:MAuditingMtheMFinancing/InvestingMProcess:MCashMandMInvestments
ChapterM17:MCompletingMtheMAuditMEngagement
ChapterM18:MReportsMonMAuditedMFinancialMStatements
ChapterM19:MProfessionalMConduct,MIndependence,MandMQualityMManagement
ChapterM20:MLegalMLiability
ChapterM21:MAssurance,MAttestation,MandMInternalMAuditingMServices
,Auditing & Assurance Services
M M M
Chapter 01 M M
An Introduction to Assurance and Financial Statement Auditing
M M M M M M M
TrueM /M FalseM Questions
1. IndependenceM standards M areM requiredM forM auditsM ofM publicM companies,M butM notM forM audi
tsMofMprivateMcompanies.
True False
2. DecisionM makersM demandM reliableM informationM thatM isM providedM byM accountants.
True False
3. InformationM asymmetry M seldomM occurs.
True False
4. ConflictsM ofM interestM oftenM occurM betweenM absenteeM ownersM andM managers.
True False
5. AuditingM services M andM attestationM services M areM theM same.
True False
6. AuditingMisMaMtypeMofMattestMservice.
True False
7. TestingMallMtransactions MthatMoccurredMduringM theMperiodMisMcostMprohibitive.
True False
MultipleMChoiceM Questions
, Auditing & Assurance Services
M M M
8. WhyMdoMauditorsMgenerallyMuseMaMsampling MapproachMtoMevidence Mgathering?
A. AuditorsM areMexpertsM andMdoMnot MneedMtoMlookMatMmuchMtoMknowMwhetherMtheMfinanci
alMstatements MareMcorrectMorMnot.
B. AuditorsM mustMbalanceMtheMcostMofMtheMauditMwithMtheMneed Mf
orMprecision.
C. AuditorsMmustMlimitMtheirMexposureMtoMtheirMauditeeMtoMmaintai
nMindependence.
D. TheMauditor's MrelationshipMwithMtheMauditeeMisMgenerally Madversarial,MsoMtheMauditorMwi
llMnotMhaveMaccessMtoMallMofMtheMfinancialMinformationMofMtheMcompany.
9. WhichM ofM theM followingM statementsM bestM describes M aM relationshipM betweenM sampleM sizeM an
dMotherMelements MofMauditing?
A. IfM materialityM increases,M soM willM th
eMsampleMsize.
B. IfM theM desiredM levelM ofM assuranceM increases,M sampleM sizesM canM b
eMsmaller.
C. IfMmateriality Mdecreases,MsampleMsizeMwillMneedMt
oMincrease.
D. ThereMisMnoMrelationshipM betweenMsampleMsizeM andM materiality MorMtheM desiredMlev
elMofMassurance.
10. WhichM ofM theM followingMstatements M aboutM theM studyM ofM auditingM isM NOTM true?
A. TheM studyM ofM auditingM canM beM valuableM toM futureM accountants M andM businessM decisio
nMmakersMwhetherMorMnot MtheyMplanMtoMbecomeMauditors.
B. TheM studyM ofM auditingM focusesM onM learningM theM analyticalM andM logicalM skillsM necessary M t
oMevaluateMtheMrelevanceMandMreliability MofMinformation.
C. TheM studyM ofM auditingM focusesM onM learningM theM rules,M techniques,M andM computation
sMrequiredMtoManalyzeMfinancialMstatements.
D. TheM studyM ofM auditingM beginsM withM theM understandingM ofM aM coherentM logicalM framewor
kMandMtechniquesMusefulMforMgatheringMandManalyzingMevidence MaboutMothers'Massertio
ns.
11. TheMbasicMpurposeMofMaMfinancialMstatementMauditMisMto
A. Detect
fraud.
M
B. ExamineM individual M transactions M soM thatM theM auditorM mayM certifyM asM t
oMtheirMvalidity.
C. ProvideM assuranceM regardingM whetherM theM auditee's M financial M statementsM ar
eMfairlyMstated.
D. AssureM theM consistent M applicationM ofM correctM accountin
gMprocedures.
M M M
TEST BANK
M M
Auditing & Assurance Services: A Systematic
M M M M M M
Approach, 11th Edition Chapters 1 - 21
M M M M M M M
,Auditing & Assurance Services
M M M
ChapterM1:MAnMIntroductionMtoMAssuranceMandMFinancialMStatementMAuditing
ChapterM2:MTheMFinancialMStatementMAuditingMEnvironment
ChapterM3:MAuditMPlanning,MTypesMofMAuditMTests,MandMMateriality
ChapterM4:MRiskMAssessment
ChapterM5:MEvidenceMandMDocumentation
ChapterM6:MInternalMControlMinMaMFinancialMStatementMAudit
ChapterM7:MAuditingMInternalMControlMoverMFinancialMReporting
ChapterM8:MAuditMSampling:MAnMOverviewMandMApplicationMtoMTestsMofMControls
ChapterM9:MAuditMSampling:MAnMApplicationMtoMSubstantiveMTestsMofMAccountMBalances
ChapterM10:MAuditingMtheMRevenueMProcess
ChapterM11:MAuditingMtheMPurchasingMProcess
ChapterM12:MAuditingMtheMHumanMResourceMManagementMProcess
ChapterM13:MAuditingMtheMInventoryMManagementMProcess
ChapterM14:MAuditingMtheMFinancing/InvestingMProcess:MPrepaidMExpenses,MIntangibleMAssets
,MandMProperty,MPlant,MandMEquipment
ChapterM15:MAuditingMtheMFinancing/InvestingMProcess:MLong-
TermMLiabilities,MStockholders’MEquity,MandMIncomeMStatementMAccounts
ChapterM16:MAuditingMtheMFinancing/InvestingMProcess:MCashMandMInvestments
ChapterM17:MCompletingMtheMAuditMEngagement
ChapterM18:MReportsMonMAuditedMFinancialMStatements
ChapterM19:MProfessionalMConduct,MIndependence,MandMQualityMManagement
ChapterM20:MLegalMLiability
ChapterM21:MAssurance,MAttestation,MandMInternalMAuditingMServices
,Auditing & Assurance Services
M M M
Chapter 01 M M
An Introduction to Assurance and Financial Statement Auditing
M M M M M M M
TrueM /M FalseM Questions
1. IndependenceM standards M areM requiredM forM auditsM ofM publicM companies,M butM notM forM audi
tsMofMprivateMcompanies.
True False
2. DecisionM makersM demandM reliableM informationM thatM isM providedM byM accountants.
True False
3. InformationM asymmetry M seldomM occurs.
True False
4. ConflictsM ofM interestM oftenM occurM betweenM absenteeM ownersM andM managers.
True False
5. AuditingM services M andM attestationM services M areM theM same.
True False
6. AuditingMisMaMtypeMofMattestMservice.
True False
7. TestingMallMtransactions MthatMoccurredMduringM theMperiodMisMcostMprohibitive.
True False
MultipleMChoiceM Questions
, Auditing & Assurance Services
M M M
8. WhyMdoMauditorsMgenerallyMuseMaMsampling MapproachMtoMevidence Mgathering?
A. AuditorsM areMexpertsM andMdoMnot MneedMtoMlookMatMmuchMtoMknowMwhetherMtheMfinanci
alMstatements MareMcorrectMorMnot.
B. AuditorsM mustMbalanceMtheMcostMofMtheMauditMwithMtheMneed Mf
orMprecision.
C. AuditorsMmustMlimitMtheirMexposureMtoMtheirMauditeeMtoMmaintai
nMindependence.
D. TheMauditor's MrelationshipMwithMtheMauditeeMisMgenerally Madversarial,MsoMtheMauditorMwi
llMnotMhaveMaccessMtoMallMofMtheMfinancialMinformationMofMtheMcompany.
9. WhichM ofM theM followingM statementsM bestM describes M aM relationshipM betweenM sampleM sizeM an
dMotherMelements MofMauditing?
A. IfM materialityM increases,M soM willM th
eMsampleMsize.
B. IfM theM desiredM levelM ofM assuranceM increases,M sampleM sizesM canM b
eMsmaller.
C. IfMmateriality Mdecreases,MsampleMsizeMwillMneedMt
oMincrease.
D. ThereMisMnoMrelationshipM betweenMsampleMsizeM andM materiality MorMtheM desiredMlev
elMofMassurance.
10. WhichM ofM theM followingMstatements M aboutM theM studyM ofM auditingM isM NOTM true?
A. TheM studyM ofM auditingM canM beM valuableM toM futureM accountants M andM businessM decisio
nMmakersMwhetherMorMnot MtheyMplanMtoMbecomeMauditors.
B. TheM studyM ofM auditingM focusesM onM learningM theM analyticalM andM logicalM skillsM necessary M t
oMevaluateMtheMrelevanceMandMreliability MofMinformation.
C. TheM studyM ofM auditingM focusesM onM learningM theM rules,M techniques,M andM computation
sMrequiredMtoManalyzeMfinancialMstatements.
D. TheM studyM ofM auditingM beginsM withM theM understandingM ofM aM coherentM logicalM framewor
kMandMtechniquesMusefulMforMgatheringMandManalyzingMevidence MaboutMothers'Massertio
ns.
11. TheMbasicMpurposeMofMaMfinancialMstatementMauditMisMto
A. Detect
fraud.
M
B. ExamineM individual M transactions M soM thatM theM auditorM mayM certifyM asM t
oMtheirMvalidity.
C. ProvideM assuranceM regardingM whetherM theM auditee's M financial M statementsM ar
eMfairlyMstated.
D. AssureM theM consistent M applicationM ofM correctM accountin
gMprocedures.
