Test Bank Auditing _ Assurance Services_ A Systematic Approach 12th Edition – Messier Chapters 1–21 Practice Questions _ Verified Answers .pdf

Test Bank
Auditing & Assurance Services: A Systematic
Approach 12th Edition – Messier Chapters 1–21
Practice Questions & Verified Answers

🧾 Audit Fundamentals
1. The primary objective of an audit is to:

A. Detect all fraud​
B. Prepare financial statements​
C. Express an opinion on financial statements​
D. Guarantee accuracy

Answer: C




2. Audit risk is:

A. Zero in all audits​
B. Risk of issuing incorrect opinion​
C. Risk of bankruptcy​
D. Risk of fraud only

Answer: B




3. Reasonable assurance means:

,A. Absolute certainty​
B. High but not absolute assurance​
C. No risk exists​
D. Full error detection

Answer: B




4. Financial statement assertions are made by:

A. Auditor​
B. Management​
C. Shareholders​
D. Government

Answer: B




5. The auditor is responsible for:

A. Preparing statements​
B. Detecting all fraud​
C. Expressing audit opinion​
D. Managing company books

Answer: C




6. Inherent risk is:

A. Risk after controls​
B. Susceptibility to misstatement before controls​
C. Sampling risk​
D. Detection risk only

Answer: B




7. Control risk is:

A. Risk controls will fail​
B. Risk auditor fails​

, C. Risk of fraud​
D. Business risk

Answer: A




8. Detection risk is:

A. Risk auditor does not detect misstatement​
B. Risk fraud occurs​
C. Risk controls fail​
D. Risk of bankruptcy

Answer: A




9. Audit risk model includes:

A. AR = IR + CR + DR​
B. AR = IR × CR × DR​
C. AR = CR ÷ IR​
D. AR = DR – CR

Answer: B




10. Materiality is:

A. Any error​
B. Misstatement affecting decisions​
C. Fraud only​
D. Accounting rule

Answer: B




11. Auditor independence means:

A. Working for client​
B. Being unbiased​
C. Preparing books​
D. Management control