Auditing and assurance services, Louwers - Exam Preparation Test Bank (Downloadable Doc)

Auditing & Assurance Services, 7e (Louwers)
Module A Other Public Accounting Services

1) The AICPA Assurance Services Executive Committee identified five megatrends that
can affect public accounting firms' business. Which of the following is not one of the
megatrends they identified?
A) Information technology.
B) The shift from the industrial age to the knowledge age.
C) Globalization.
D) Merging of corporations creating fewer audit opportunities.
Answer: D
Difficulty: 2 Medium
Topic: Assurance Services
Learning Objective: A-05 Explain and provide examples of assurance services
engagements.
Blooms: Remember
AACSB: Analytical Thinking
Accessibility: Keyboard Navigation

2) Assurance services are defined as independent professional services that:
A) establish criteria for effective measurement of business activity.
B) improve the quality of information, or its context, for decision makers.
C) attest to the adequacy of controls over business operations.
D) develop efficient and effective accounting systems to ensure compliance with
accounting standards and policy.
Answer: B
Difficulty: 1 Easy
Topic: Assurance Services
Learning Objective: A-05 Explain and provide examples of assurance services
engagements.
Blooms: Remember
AACSB: Analytical Thinking
Accessibility: Keyboard Navigation

3) Many individuals are apprehensive about using the Internet to purchase items. This
apprehension mainly arises from users' concerns about:
A) the reliability of computer technology.
B) the time delays in Internet purchases.
C) a lack of security for information transmitted over the Internet.
D) the lack of CPA involvement in Internet company financial information.
Answer: C
Difficulty: 2 Medium
Topic: Assurance Services
Learning Objective: A-05 Explain and provide examples of assurance services
engagements.
Blooms: Remember

,AACSB: Analytical Thinking
Accessibility: Keyboard Navigation

,4) The phrase "Trust services" refers to:
A) WebTrust and SysTrust Services.
B) XBRL and SysTrust Services.
C) WebTrust and XBRL Services.
D) all AICPA designated assurance services.
Answer: A
Difficulty: 2 Medium
Topic: Assurance Services
Learning Objective: A-05 Explain and provide examples of assurance services
engagements.
Blooms: Remember
AACSB: Analytical Thinking
Accessibility: Keyboard Navigation

5) Which of the following is not a principle of Trust Service engagements?
A) Security from unauthorized use.
B) Availability of the system, products, or services.
C) Proficiency in preparing transactions.
D) Confidentiality of information.
Answer: C
Difficulty: 2 Medium
Topic: Assurance Services
Learning Objective: A-05 Explain and provide examples of assurance services
engagements.
Blooms: Apply
AACSB: Analytical Thinking
Accessibility: Keyboard Navigation

6) What is the appropriate name for an assurance service provided by a CPA regarding a
client's commercial Internet site with reference to the principles of privacy, security,
processing integrity, availability, and confidentiality?
A) WebTrust.
B) SysTrust.
C) XBRL.
D) WebSecure.
Answer: A
Difficulty: 2 Medium
Topic: Assurance Services
Learning Objective: A-05 Explain and provide examples of assurance services
engagements.
Blooms: Apply
AACSB: Analytical Thinking
Accessibility: Keyboard Navigation

, 7) Extensible Business Reporting Language (XBRL) provides a computer readable
identifying tag for each individual item of data. The advantages of XBRL include all of
the following except:
A) increases the speed of handling of financial data.
B) reduces the chance of error.
C) improves the full disclosure of financial information.
D) permits automatic checking of information.
Answer: C
Difficulty: 2 Medium
Topic: Assurance Services
Learning Objective: A-05 Explain and provide examples of assurance services
engagements.
Blooms: Apply
AACSB: Analytical Thinking
Accessibility: Keyboard Navigation

8) Enhanced Business Reporting (EBR) focuses on improving business reporting by
developing a voluntary framework for presentation and disclosure of value drivers and
non-financial measures of performance. The advantages of EBR include all of the
following except:
A) more efficient and effective regulatory process.
B) reduced financing costs for companies.
C) better allocation of capital by investors.
D) better footnote disclosure in the companies' SEC filings.
Answer: D
Difficulty: 1 Easy
Topic: Assurance Services
Learning Objective: A-05 Explain and provide examples of assurance services
engagements.
Blooms: Apply
AACSB: Analytical Thinking
Accessibility: Keyboard Navigation

9) Attestation engagements include:
A) only examinations.
B) examinations and assurance services.
C) examinations, reviews, and agreed-upon procedures.
D) examinations, reviews, compilations, agreed-upon procedures, and assurance services.
Answer: C
Difficulty: 2 Medium
Topic: Attestation Engagements
Learning Objective: A-01 Explain and provide examples of attestation engagements.
Blooms: Apply
AACSB: Analytical Thinking
Accessibility: Keyboard Navigation