Auditing & Assurance Services
m m m
TEST BANK
Auditing & Assurance Services: A Systematic
Approach, 11th Edition Chapters 1 - 21
,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,mIntangiblemAsse
ts,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
Chapterm 01m
Anm Introductionm tom Assurancem andm Financialm Statementm Auditing
Truem /m Falsem Questions
1. Independencem standards m arem requiredm form auditsm ofm publicm companies,m butm notm form a
uditsmofmprivatemcompanies.
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 servicesm andm attestationm servicesm arem them same.
True False
6. Auditingmismamtypemofmattestmservice.
True False
7. Testingmallmtransactions mthatm occurredmduringm themperiodmismcostmprohibitive.
True False
Multiplem Choicem Questions
, Auditing & Assurance Services
m m m
8. Whymdomauditorsmgenerallymusemamsamplingmapproachmtomevidencemgathering?
A. Auditorsm arem expertsm andm dom notm needmtomlookmatmmuchmtomknowm whethermthemfi
nancialmstatementsmaremcorrectmormnot.
B. Auditorsm mustmbalancemthemcostmofmthemauditmwithmthem nee
dmformprecision.
C. Auditorsmmustmlimitmtheirmexposuremtomtheirmauditeemtommain
tainmindependence.
D. Themauditor'sm relationshipm withmthem auditeemismgenerallymadversarial,msomthem audito
rm willmnotmhavemaccessmtomallmofmthemfinancialminformationmofmthemcompany.
9. Whichm ofm them followingm statementsm bestm describesm am relationshipm betweenm samplem size
m andm
othermelementsmofmauditing?
A. Ifm materialitym increases, m som willm t
hemsamplemsize.
B. Ifm them desiredm levelm ofm assurancem increases,m samplem sizesm ca
nm bemsmaller.
C. Ifmmaterialitymdecreases,msamplemsizemwillmneed
mtom increase.
D. Therem ismnom relationshipm betweenmsamplem sizem andm materialitym ormthem desiredm
levelmofmassurance.
10. Whichm ofm them followingm statementsm aboutm them studym ofm auditingm ism NOTm true?
A. Them studym ofm auditingm canm bem valuablem tom futurem accountantsm andm businessm de
cisionmmakersmwhethermormnotmtheymplanmtombecomemauditors.
B. Them studym ofm auditingm focusesm onm learningm them analyticalm andm logicalm skillsm necessa
rym tomevaluatemthemrelevancemandmreliabilitymofminformation.
C. Them studym ofm auditingm focusesm onm learningm them rules,m techniques,m andm computa
tionsmrequiredmtomanalyzemfinancialmstatements.
D. Them studym ofm auditingm beginsm withm them understandingm ofm am coherentm logicalm frame
workmandmtechniquesmusefulmformgatheringmandmanalyzingmevidencemaboutmothers'm
assertions.
11. Them basicm purposem ofmamfinancialm statementm auditmismto
A. Detect
fraud.
m
B. Examinem individualm transactionsm som thatm them auditorm maym certifym a
sm tomtheirmvalidity.
C. Providem assurancem regardingm whetherm them auditee'sm financialm statementsm
aremfairlymstated.
D. Assurem them consistentm applicationm ofm correctm accounti
ngmprocedures.
m m m
TEST BANK
Auditing & Assurance Services: A Systematic
Approach, 11th Edition Chapters 1 - 21
,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,mIntangiblemAsse
ts,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
Chapterm 01m
Anm Introductionm tom Assurancem andm Financialm Statementm Auditing
Truem /m Falsem Questions
1. Independencem standards m arem requiredm form auditsm ofm publicm companies,m butm notm form a
uditsmofmprivatemcompanies.
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 servicesm andm attestationm servicesm arem them same.
True False
6. Auditingmismamtypemofmattestmservice.
True False
7. Testingmallmtransactions mthatm occurredmduringm themperiodmismcostmprohibitive.
True False
Multiplem Choicem Questions
, Auditing & Assurance Services
m m m
8. Whymdomauditorsmgenerallymusemamsamplingmapproachmtomevidencemgathering?
A. Auditorsm arem expertsm andm dom notm needmtomlookmatmmuchmtomknowm whethermthemfi
nancialmstatementsmaremcorrectmormnot.
B. Auditorsm mustmbalancemthemcostmofmthemauditmwithmthem nee
dmformprecision.
C. Auditorsmmustmlimitmtheirmexposuremtomtheirmauditeemtommain
tainmindependence.
D. Themauditor'sm relationshipm withmthem auditeemismgenerallymadversarial,msomthem audito
rm willmnotmhavemaccessmtomallmofmthemfinancialminformationmofmthemcompany.
9. Whichm ofm them followingm statementsm bestm describesm am relationshipm betweenm samplem size
m andm
othermelementsmofmauditing?
A. Ifm materialitym increases, m som willm t
hemsamplemsize.
B. Ifm them desiredm levelm ofm assurancem increases,m samplem sizesm ca
nm bemsmaller.
C. Ifmmaterialitymdecreases,msamplemsizemwillmneed
mtom increase.
D. Therem ismnom relationshipm betweenmsamplem sizem andm materialitym ormthem desiredm
levelmofmassurance.
10. Whichm ofm them followingm statementsm aboutm them studym ofm auditingm ism NOTm true?
A. Them studym ofm auditingm canm bem valuablem tom futurem accountantsm andm businessm de
cisionmmakersmwhethermormnotmtheymplanmtombecomemauditors.
B. Them studym ofm auditingm focusesm onm learningm them analyticalm andm logicalm skillsm necessa
rym tomevaluatemthemrelevancemandmreliabilitymofminformation.
C. Them studym ofm auditingm focusesm onm learningm them rules,m techniques,m andm computa
tionsmrequiredmtomanalyzemfinancialmstatements.
D. Them studym ofm auditingm beginsm withm them understandingm ofm am coherentm logicalm frame
workmandmtechniquesmusefulmformgatheringmandmanalyzingmevidencemaboutmothers'm
assertions.
11. Them basicm purposem ofmamfinancialm statementm auditmismto
A. Detect
fraud.
m
B. Examinem individualm transactionsm som thatm them auditorm maym certifym a
sm tomtheirmvalidity.
C. Providem assurancem regardingm whetherm them auditee'sm financialm statementsm
aremfairlymstated.
D. Assurem them consistentm applicationm ofm correctm accounti
ngmprocedures.
