TEST BANK
fr fr
Auditing & Assurance Services: A Systematic A
fr fr fr fr fr fr
pproach, 11th Edition Chapters 1 - 21
fr fr fr fr fr fr fr
,Chapterfr1:frAnfrIntroductionfrtofrAssurancefrandfrFinancialfrStatementfrAuditing
Chapterfr2:frThefrFinancialfrStatementfrAuditingfrEnvironment
Chapterfr3:frAuditfrPlanning,frTypesfroffrAuditfrTests,frandfrMateriality
Chapterfr4:frRiskfrAssessment
Chapterfr5:frEvidencefrandfrDocumentation
Chapterfr6:frInternalfrControlfrinfrafrFinancialfrStatementfrAudit
Chapterfr7:frAuditingfrInternalfrControlfroverfrFinancialfrReporting
Chapterfr8:frAuditfrSampling:frAnfrOverviewfrandfrApplicationfrtofrTestsfroffrControls
Chapterfr9:frAuditfrSampling:frAnfrApplicationfrtofrSubstantivefrTestsfroffrAccountfrBalances
Chapterfr10:frAuditingfrthefrRevenuefrProcess
Chapterfr11:frAuditingfrthefrPurchasingfrProcess
Chapterfr12:frAuditingfrthefrHumanfrResourcefrManagementfrProcess
Chapterfr13:frAuditingfrthefrInventoryfrManagementfrProcess
Chapterfr14:frAuditingfrthefrFinancing/InvestingfrProcess:frPrepaidfrExpenses,frIntangiblefrAssets,fr
andfrProperty,frPlant,frandfrEquipment
Chapterfr15:frAuditingfrthefrFinancing/InvestingfrProcess:frLong-
TermfrLiabilities,frStockholders’frEquity,frandfrIncomefrStatementfrAccounts
Chapterfr16:frAuditingfrthefrFinancing/InvestingfrProcess:frCashfrandfrInvestments
Chapterfr17:frCompletingfrthefrAuditfrEngagement
Chapterfr18:frReportsfronfrAuditedfrFinancialfrStatements
Chapterfr19:frProfessionalfrConduct,frIndependence,frandfrQualityfrManagement
Chapterfr20:frLegalfrLiability
Chapterfr21:frAssurance,frAttestation,frandfrInternalfrAuditingfrServices
, Chapter 01 fr fr
An Introduction to Assurance and Financial Statement Auditing
fr fr fr fr fr fr fr
Truef r /f r Falsef r Questions
1. Independencefr standards fr arefr requiredfr forfr auditsfr offr publicf r companies,f r butfr notfr forfr aud
itsfo
r ffrprivatefrcompanies.
True False
2. Decisionf r makersf r demandf r reliablef r informationf r thatf r isf r providedf r byf r accountants.
True False
3. Informationf r asymmetryf r seldomf r occurs.
True False
4. Conflictsf r offr interestfroftenfroccurf r betweenfr absenteef r ownersfr andfr managers.
True False
5. Auditingf r servicesf r andf r attestationf r servicesf r aref r thef r same.
True False
6. Auditingfrisfrafrtypefroffrattestfrservice.
True False
7. Testingfrallfrtransactionsfrthatfroccurredfrduringfrthefrperiodfrisfrcostfrprohibitive.
True False
MultiplefrChoicefr Questions
, 8. Whyfrdofrauditorsfrgenerallyfrusefrafrsamplingfrapproachfrtofrevidencefrgathering?
A. Auditorsfr arefrexpertsfr andfrdofrnotfrneedfrtofrlookfratfrmuchfrtofrknowfrwhetherfrthefrfinan
cialfsr tatementsfrarefrcorrectfrorfrnot.
B. Auditorsfr mustfrbalancefrthefrcostfroffrthefrauditfrwithfrthefrneedfrf
orfrprecision.
C. Auditorsfrmustfrlimitfrtheirfrexposurefrtofrtheirfrauditeefrtofrmainta
infir ndependence.
D. Thefrauditor'sfrrelationshipfrwithfrthefrauditeefrisfrgenerallyfradversarial,frsofrthefrauditorfrw
illfn
r otfrhavefraccess frtofrallfroffrthefrfinancial frinformation froffrthefrcompany.
9. Whichf r off r thef r followingf r statementsf r bestf r describesf r afr relationshipf r betweenf r samplef r sizef r
andfo
r therfrelements froffrauditing?
A. Iff r materialityf r increases,f r sof r willf r t
hefrsamplefrsize.
B. Iff r thef r desiredf r levelf r off r assurancef r increases,fr samplef r sizesf r canf r
befsr maller.
C. Iffrmaterialityfrdecreases,frsamplefrsizefrwillfrneedfrt
ofir ncrease.
D. Therefrisfrnofrrelationshipf r betweenfrsamplefr sizefr andfr materialityfrorfrthefr desiredfrle
velfo r ffrassurance.
10. Whichfroffr thefr followingfr statementsfr aboutfr thefr studyfroffr auditingf r isfr NOTfr true?
A. Thef r studyf r off r auditingf r canf r bef r valuablef r tof r futuref r accountants f r andf r businessf r decis
ionfrmakersfrwhetherfrorfrnotfrtheyfrplanfrtofrbecomefrauditors.
B. Thef r studyf r off r auditingf r focusesf r onf r learningf r thef r analyticalf r andf r logicalfr skillsf r necessary
f r tofrevaluatefrthefrrelevancefrandfrreliabilityfroffrinformation.
C. Thef r studyf r off r auditingf r focusesf r onfr learningf r thef r rules,f r techniques,f r andf r computati
onsfrrequiredfrtofranalyzefrfinancialfrstatements.
D. Thef r studyf r offr auditingf r beginsfr withfr thefr understandingf r offr afr coherentfr logicalfr framewo
rkfrandfrtechniquesfrusefulfrforfrgatheringfrandfranalyzingfrevidencefraboutfrothers'frassertio
ns.
11. Thefrbasicfrpurposefroffrafrfinancialfrstatementfrauditfrisfrto
A. Detectfr
fraud.
B. Examinefr individualf r transactions f r sofr thatf r thef r auditorf r mayf r certifyfr asfr
toftr heirfrvalidity.
C. Providef r assurancef r regardingf r whetherf r thef r auditee'sf r financialf r statementsf r
arefrfairlyfrstated.
D. Assuref r thef r consistentfr applicationf r offr correctfr accountin
gfrprocedures.
fr fr
Auditing & Assurance Services: A Systematic A
fr fr fr fr fr fr
pproach, 11th Edition Chapters 1 - 21
fr fr fr fr fr fr fr
,Chapterfr1:frAnfrIntroductionfrtofrAssurancefrandfrFinancialfrStatementfrAuditing
Chapterfr2:frThefrFinancialfrStatementfrAuditingfrEnvironment
Chapterfr3:frAuditfrPlanning,frTypesfroffrAuditfrTests,frandfrMateriality
Chapterfr4:frRiskfrAssessment
Chapterfr5:frEvidencefrandfrDocumentation
Chapterfr6:frInternalfrControlfrinfrafrFinancialfrStatementfrAudit
Chapterfr7:frAuditingfrInternalfrControlfroverfrFinancialfrReporting
Chapterfr8:frAuditfrSampling:frAnfrOverviewfrandfrApplicationfrtofrTestsfroffrControls
Chapterfr9:frAuditfrSampling:frAnfrApplicationfrtofrSubstantivefrTestsfroffrAccountfrBalances
Chapterfr10:frAuditingfrthefrRevenuefrProcess
Chapterfr11:frAuditingfrthefrPurchasingfrProcess
Chapterfr12:frAuditingfrthefrHumanfrResourcefrManagementfrProcess
Chapterfr13:frAuditingfrthefrInventoryfrManagementfrProcess
Chapterfr14:frAuditingfrthefrFinancing/InvestingfrProcess:frPrepaidfrExpenses,frIntangiblefrAssets,fr
andfrProperty,frPlant,frandfrEquipment
Chapterfr15:frAuditingfrthefrFinancing/InvestingfrProcess:frLong-
TermfrLiabilities,frStockholders’frEquity,frandfrIncomefrStatementfrAccounts
Chapterfr16:frAuditingfrthefrFinancing/InvestingfrProcess:frCashfrandfrInvestments
Chapterfr17:frCompletingfrthefrAuditfrEngagement
Chapterfr18:frReportsfronfrAuditedfrFinancialfrStatements
Chapterfr19:frProfessionalfrConduct,frIndependence,frandfrQualityfrManagement
Chapterfr20:frLegalfrLiability
Chapterfr21:frAssurance,frAttestation,frandfrInternalfrAuditingfrServices
, Chapter 01 fr fr
An Introduction to Assurance and Financial Statement Auditing
fr fr fr fr fr fr fr
Truef r /f r Falsef r Questions
1. Independencefr standards fr arefr requiredfr forfr auditsfr offr publicf r companies,f r butfr notfr forfr aud
itsfo
r ffrprivatefrcompanies.
True False
2. Decisionf r makersf r demandf r reliablef r informationf r thatf r isf r providedf r byf r accountants.
True False
3. Informationf r asymmetryf r seldomf r occurs.
True False
4. Conflictsf r offr interestfroftenfroccurf r betweenfr absenteef r ownersfr andfr managers.
True False
5. Auditingf r servicesf r andf r attestationf r servicesf r aref r thef r same.
True False
6. Auditingfrisfrafrtypefroffrattestfrservice.
True False
7. Testingfrallfrtransactionsfrthatfroccurredfrduringfrthefrperiodfrisfrcostfrprohibitive.
True False
MultiplefrChoicefr Questions
, 8. Whyfrdofrauditorsfrgenerallyfrusefrafrsamplingfrapproachfrtofrevidencefrgathering?
A. Auditorsfr arefrexpertsfr andfrdofrnotfrneedfrtofrlookfratfrmuchfrtofrknowfrwhetherfrthefrfinan
cialfsr tatementsfrarefrcorrectfrorfrnot.
B. Auditorsfr mustfrbalancefrthefrcostfroffrthefrauditfrwithfrthefrneedfrf
orfrprecision.
C. Auditorsfrmustfrlimitfrtheirfrexposurefrtofrtheirfrauditeefrtofrmainta
infir ndependence.
D. Thefrauditor'sfrrelationshipfrwithfrthefrauditeefrisfrgenerallyfradversarial,frsofrthefrauditorfrw
illfn
r otfrhavefraccess frtofrallfroffrthefrfinancial frinformation froffrthefrcompany.
9. Whichf r off r thef r followingf r statementsf r bestf r describesf r afr relationshipf r betweenf r samplef r sizef r
andfo
r therfrelements froffrauditing?
A. Iff r materialityf r increases,f r sof r willf r t
hefrsamplefrsize.
B. Iff r thef r desiredf r levelf r off r assurancef r increases,fr samplef r sizesf r canf r
befsr maller.
C. Iffrmaterialityfrdecreases,frsamplefrsizefrwillfrneedfrt
ofir ncrease.
D. Therefrisfrnofrrelationshipf r betweenfrsamplefr sizefr andfr materialityfrorfrthefr desiredfrle
velfo r ffrassurance.
10. Whichfroffr thefr followingfr statementsfr aboutfr thefr studyfroffr auditingf r isfr NOTfr true?
A. Thef r studyf r off r auditingf r canf r bef r valuablef r tof r futuref r accountants f r andf r businessf r decis
ionfrmakersfrwhetherfrorfrnotfrtheyfrplanfrtofrbecomefrauditors.
B. Thef r studyf r off r auditingf r focusesf r onf r learningf r thef r analyticalf r andf r logicalfr skillsf r necessary
f r tofrevaluatefrthefrrelevancefrandfrreliabilityfroffrinformation.
C. Thef r studyf r off r auditingf r focusesf r onfr learningf r thef r rules,f r techniques,f r andf r computati
onsfrrequiredfrtofranalyzefrfinancialfrstatements.
D. Thef r studyf r offr auditingf r beginsfr withfr thefr understandingf r offr afr coherentfr logicalfr framewo
rkfrandfrtechniquesfrusefulfrforfrgatheringfrandfranalyzingfrevidencefraboutfrothers'frassertio
ns.
11. Thefrbasicfrpurposefroffrafrfinancialfrstatementfrauditfrisfrto
A. Detectfr
fraud.
B. Examinefr individualf r transactions f r sofr thatf r thef r auditorf r mayf r certifyfr asfr
toftr heirfrvalidity.
C. Providef r assurancef r regardingf r whetherf r thef r auditee'sf r financialf r statementsf r
arefrfairlyfrstated.
D. Assuref r thef r consistentfr applicationf r offr correctfr accountin
gfrprocedures.
