Test Bank – Auditing and Assurance Services (16th Edition)Alvin A. Arens | A+ Rated Study Resource | Full Chapter Coverage

[TESTS, 16TN
ss

,1

,Auditing and Assurance Services,
ss (Arens) ss ss



Chapter 1 The Demand for Audit and Other Assurance Services
ss s s s s ss ss ss ss ss ss ss




Learning Objective 1-1 ss ss




1) The Sarbanes-Oxley Act applies to which of the following companies?
ss ss ss ss ss ss ss ss ss



A) All companies
ss



B) Privately held companies ss ss



C) Public companies ss



D) All public companies and privately held companies with assets greater than $500 million
ss ss ss ss ss ss ss ss ss ss ss ss



Answer: C
ss s s



Terms: Sarbanes-Oxley Act
s s ss



Diff: Easy
ss s s



Objective: LO 1-1 s s ss



AACSB: Reflective thinking skillss s ss ss



Topic: SOX
ss s s




2) Which of the following is considered audit evidence?
ss ss ss ss ss ss ss



A)
ss



Oral statements ss Written Auditor
made by management
ss ss Communications
ss Observation ss ss



Y N N

B)
Oral statements
ss Written Auditor
ss made by management
ss ss ss Communications Observation
ss



N Y Y

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



Y Y Y

D)
Oral statements
ss Written Auditor
ss made by management
ss ss ss Communications Observation
ss



N N Y

Answer: C s s



Terms: Audit evidences s ss



Diff: Moderate
ss s s



Objective: LO 1-1
ss s s ss



AACSB: Reflective thinking skillss s ss ss




1

, 3) Evidence is paramount to audit and attestation engagements. List the four basic types of audit
ss ss ss ss ss ss ss ss ss ss ss ss ss ss



evidence.
ss



Answer: The four types of audit and attestation evidence include:
s s ss ss ss ss ss ss ss ss



1. Electronic and documentary data about transactions
ss ss ss ss ss



2. Written and electronic communications with outsiders
ss ss ss ss ss



3. Observations by the auditor ss ss ss



4. Oral testimony of the auditee (client)
ss ss ss ss ss



Terms: Basic types of audit evidence
ss s s ss ss ss ss



Diff: Easy
ss s s



Objective: LO 1-1 s s ss



AACSB: Reflective thinking skills
s s ss ss




4) The criteria by which an auditor evaluates the information under audit may vary with the
ss ss ss ss ss ss ss ss ss ss ss ss ss ss



information being audited.
ss ss ss



A) True
B) False
Answer:
ss



A
s s



Terms: Criteria which an auditor evaluates information
s s ss ss ss ss ss



Diff: Easy
ss s s



Objective: LO 1-1 s s ss



AACSB: Reflective thinking skills
s s ss ss




5) The criteria used by an external auditor to evaluate published financial statements are known
ss ss ss ss ss ss ss ss ss ss ss ss ss



as generally accepted auditing standards.
ss ss ss ss ss



A) True
B) False
Answer:
ss



B
ss



Terms: Criteria used by external auditor to evaluate published financial statements
s s ss ss ss ss ss ss ss ss ss



Diff: Easy
ss s s



Objective: LO 1-1 s s ss



AACSB: Reflective thinking skills
s s ss ss




6) The Sarbanes-Oxley Act establishes standards related to the audits of privately held
ss ss ss ss ss ss ss ss ss ss ss



companies.
ss



A) True
B) False
Answer:
ss



B
ss



Terms: Sarbanes-Oxley Act
s s ss



Diff: Easy
ss s s



Objective: LO 1-1 s s ss



AACSB: Reflective thinking skills
s s ss ss



Topic: SOX
ss s s




2