[TEST BANK] AUDITING AND ASSURANCE SERVICES, 16TH EDITION BY ARENS, ELDER, BEASLEY, HOGAN.

[TEST BANK]
AUDITING AND
ASSURANCE
SERVICES, 16TH
EDITION BY
ARENS, ELDER,
BEAS LEY,HOGAN
q

,Auditing and Assurance Services, (Arens)
Chapter 1 The Demand for Audit and Other Assurance Services

Learning Objective 1-1

1) The Sarbanes-Oxley Act applies to which of the following companies?
A) All companies
B) Privately held companies
C) Public companies
D) All public companies and privately held companies with assets greater than
$500 million Answer: C
Terms: Sarbanes-
Oxley Act Diff: Easy
Objective: LO 1-1
AACSB:
Reflective thinking skills
Topic: SOX

2) Which of the following is considered a
udit evidence? A)
Oral statements m Written Comm Auditor Obser
ade by unications vation
management
Y N N

B)
Oral statements Written Comm Auditor Obser
made by manageme unications vation
nt
N Y Y

C)
Oral statements m Written Comm Auditor Obser
ade by unications vation
management
Y Y Y

D)
Oral statements Written Comm Auditor Obser
made by manageme unications vation
nt
N N Y

Answer: C
Terms:
Audit evidence
Diff:
1

, Moderate Objec
tive: LO 1-1
AACSB: Reflective thinking skills




1

, 3) Evidence; is; paramount; to; audit; and; attestation; engagements.; List; the; four; basic;typ
es;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
3. Observations; by; ; the; ; auditor
4. Oral; testimony;of;the; auditee;(
client); Terms:
Basic; types; of;audit; evidenc;
e; Diff: Easy;Objective:
LO; 1-1
AACSB: Reflective; ; thinking; skills

4) The; criteria; by; which; an; auditor; evaluates; the; information; under; audit; ma; y;
vary; with; the; information; being; audited.
A) True
B) False;
Answer:
;A
Terms:
Criteria; which; an; auditor; evaluat;e
s;information; Diff: Easy
Objective: LO; ; 1-1
AACSB: Reflective; ; thinking; skills

5) The; criteria; used; by; an; external; auditor; to; evaluate; published; financial; stateme;nts
; are; known; as; generally; accepted; auditing; standards.
A) True
B) False;
Answer:
;B
Terms:
Criteria; used; by; external; auditor; to; evaluate; published; fina;nc
ial;statements; Diff: Easy
Objective: LO; ; 1-1
AACSB: Reflective; ; thinking; skills

6) The; Sarbanes-
Oxley; Act; establishes; standards; related; to; the; audits; of; privately; held; com;pani
es.
A) True
B) False;
Answer:
B
Terms: Sarbanes-
Oxley;Act;Diff:; Easy;
Objective: LO; 1-
1;AACSB:
2