Auditing & Assurance Services
cf cf cf
TEST BANK cf
Auditing & Assurance Services: A Systematic A
cf cf cf cf cf cf
pproach, 11th Edition Chapters 1 - 21
cf cf cf cf cf cf cf
,Auditing & Assurance Services
cf cf cf
Chaptercf1:cfAncfIntroductioncftocfAssurancecfandcfFinancialcfStatementcfAuditing
Chaptercf2:cfThecfFinancialcfStatementcfAuditingcfEnvironment
Chaptercf3:cfAuditcfPlanning,cfTypescfofcfAuditcfTests,cfandcfMateriality
Chaptercf4:cfRiskcfAssessment
Chaptercf5:cfEvidencecfandcfDocumentation
Chaptercf6:cfInternalcfControlcfincfacfFinancialcfStatementcfAudit
Chaptercf7:cfAuditingcfInternalcfControlcfovercfFinancialcfReporting
Chaptercf8:cfAuditcfSampling:cfAncfOverviewcfandcfApplicationcftocfTestscfofcfControls
Chaptercf9:cfAuditcfSampling:cfAncfApplicationcftocfSubstantivecfTestscfofcfAccountcfBalances
Chaptercf10:cfAuditingcfthecfRevenuecfProcess
Chaptercf11:cfAuditingcfthecfPurchasingcfProcess
Chaptercf12:cfAuditingcfthecfHumancfResourcecfManagementcfProcess
Chaptercf13:cfAuditingcfthecfInventorycfManagementcfProcess
Chaptercf14:cfAuditingcfthecfFinancing/InvestingcfProcess:cfPrepaidcfExpenses,cfIntangiblecfAssets,c
fandcfProperty,cfPlant,cfandcfEquipment
Chaptercf15:cfAuditingcfthecfFinancing/InvestingcfProcess:cfLong-
TermcfLiabilities,cfStockholders’cfEquity,cfandcfIncomecfStatementcfAccounts
Chaptercf16:cfAuditingcfthecfFinancing/InvestingcfProcess:cfCashcfandcfInvestments
Chaptercf17:cfCompletingcfthecfAuditcfEngagement
Chaptercf18:cfReportscfoncfAuditedcfFinancialcfStatements
Chaptercf19:cfProfessionalcfConduct,cfIndependence,cfandcfQualitycfManagement
Chaptercf20:cfLegalcfLiability
Chaptercf21:cfAssurance,cfAttestation,cfandcfInternalcfAuditingcfServices
,Auditing & Assurance Services
cf cf cf
Chapter 01 cf c
f
An Introduction to Assurance and Financial Statement Auditing
cf cf cf cf cf cf cf
Truec f /c f Falsec f Questions
1. Independencecf standards cf arecf requiredcf forcf auditscf ofcf publiccf companies,cf butcf notcf forcf a
uditsco
f fcfprivatecf companies.
True False
2. Decisioncf makerscf demandcf reliablecf informationcf thatc f iscf providedcf bycf accountants.
True False
3. Informationc f asymmetryc f seldomc f occurs.
True False
4. Conflictscf ofcf interestcf oftencf occurcf betweencf absenteecf ownerscf andcf managers.
True False
5. Auditingc f servicesc f andc f attestationc f servicesc f arec f thecf same.
True False
6. Auditingcfiscfacftypecfofcfattestcfservice.
True False
7. Testingcfallcftransactions cfthatcfoccurredcfduringcf thecf periodcfiscfcostcfprohibitive.
True False
MultiplecfChoicecf Questions
, Auditing & Assurance Services
cf cf cf
8. Whycfdocfauditorscfgenerallycfusecfacfsamplingcfapproachcftocfevidencecfgathering?
A. Auditorscf arecf experts cf andcf docf notcf needcftocflookcf atcf muchcf tocf knowcf whethercfthecf fina
ncialcsf tatementscfarecfcorrectcforcfnot.
B. Auditorscf mustcfbalancecfthecf costcfofcfthecfauditcfwithcfthecf needc
fforcfprecision.
C. Auditorscfmustcflimitcftheircfexposurecftocftheircfauditeecftocfmaint
aincif ndependence.
D. Thecfauditor'scfrelationshipcfwithcfthecf auditeecfiscfgenerallycfadversarial,cfsocfthecf auditorcf
willcfnotcfhavecfaccesscftocfallcfofcfthecffinancialcfinformationcfofcfthecfcompany.
9. Whichcf ofcf thecf followingc f statements cf bestcf describes cf acf relationshipcf betweencf samplecf sizec
f andc
o
f thercfelements cfofcfauditing?
A. Ifc f materialityc f increases, c f soc f willc f t
hecfsamplecfsize.
B. Ifcf thecf desiredcf levelcf ofcf assurancec f increases,cf samplec f sizescf can
cf bec sf maller.
C. Ifcfmaterialitycfdecreases,cfsamplecfsizecfwillcfneedcf
tocif ncrease.
D. Therecf iscf nocf relationshipcf betweencfsamplecf sizecf andcf materialitycforcfthecf desiredcfl
evelco f fcfassurance.
10. Whichcf ofcf thecf followingcf statements cf aboutcf thecf studycf ofcf auditingcf iscf NOTcf true?
A. Thecf studyc f ofcf auditingc f canc f bec f valuablec f tocf futurec f accountants c f andc f businesscf dec
isioncfmakerscfwhethercforcfnotcftheycfplancftocfbecomecfauditors.
B. Thecf studycf ofcf auditingcf focusesc f oncf learningcf thec f analyticalcf andcf logicalcf skillscf necessa
rycf tocfevaluatecfthecfrelevancecfandcfreliabilitycfofcfinformation.
C. Thecf studycf ofcf auditingcf focusescf oncf learningcf thecf rules,cf techniques,cf andcf computat
ionscfrequiredcftocfanalyzecffinancialcfstatements.
D. Thecf studycf ofcf auditingcf beginscf withcf thecf understandingcf ofcf acf coherentcf logicalcf framew
orkcfandcftechniquescfusefulcfforcfgatheringcfandcfanalyzingcfevidencecfaboutcfothers'cfasser
tions.
11. Thecf basiccfpurposecf ofcf acffinancialcf statementcf auditcfiscfto
A. Detectcf
fraud.
B. Examinecf individualcf transactions cf socf thatcf thecf auditorcf maycf certifycf a
scf toctf heircfvalidity.
C. Providec f assurancec f regardingc f whetherc f thec f auditee's c f financialc f statements c f
arecffairlycfstated.
D. Assurecf thecf consistentcf applicationcf ofcf correctcf accounti
ngcfprocedures.
cf cf cf
TEST BANK cf
Auditing & Assurance Services: A Systematic A
cf cf cf cf cf cf
pproach, 11th Edition Chapters 1 - 21
cf cf cf cf cf cf cf
,Auditing & Assurance Services
cf cf cf
Chaptercf1:cfAncfIntroductioncftocfAssurancecfandcfFinancialcfStatementcfAuditing
Chaptercf2:cfThecfFinancialcfStatementcfAuditingcfEnvironment
Chaptercf3:cfAuditcfPlanning,cfTypescfofcfAuditcfTests,cfandcfMateriality
Chaptercf4:cfRiskcfAssessment
Chaptercf5:cfEvidencecfandcfDocumentation
Chaptercf6:cfInternalcfControlcfincfacfFinancialcfStatementcfAudit
Chaptercf7:cfAuditingcfInternalcfControlcfovercfFinancialcfReporting
Chaptercf8:cfAuditcfSampling:cfAncfOverviewcfandcfApplicationcftocfTestscfofcfControls
Chaptercf9:cfAuditcfSampling:cfAncfApplicationcftocfSubstantivecfTestscfofcfAccountcfBalances
Chaptercf10:cfAuditingcfthecfRevenuecfProcess
Chaptercf11:cfAuditingcfthecfPurchasingcfProcess
Chaptercf12:cfAuditingcfthecfHumancfResourcecfManagementcfProcess
Chaptercf13:cfAuditingcfthecfInventorycfManagementcfProcess
Chaptercf14:cfAuditingcfthecfFinancing/InvestingcfProcess:cfPrepaidcfExpenses,cfIntangiblecfAssets,c
fandcfProperty,cfPlant,cfandcfEquipment
Chaptercf15:cfAuditingcfthecfFinancing/InvestingcfProcess:cfLong-
TermcfLiabilities,cfStockholders’cfEquity,cfandcfIncomecfStatementcfAccounts
Chaptercf16:cfAuditingcfthecfFinancing/InvestingcfProcess:cfCashcfandcfInvestments
Chaptercf17:cfCompletingcfthecfAuditcfEngagement
Chaptercf18:cfReportscfoncfAuditedcfFinancialcfStatements
Chaptercf19:cfProfessionalcfConduct,cfIndependence,cfandcfQualitycfManagement
Chaptercf20:cfLegalcfLiability
Chaptercf21:cfAssurance,cfAttestation,cfandcfInternalcfAuditingcfServices
,Auditing & Assurance Services
cf cf cf
Chapter 01 cf c
f
An Introduction to Assurance and Financial Statement Auditing
cf cf cf cf cf cf cf
Truec f /c f Falsec f Questions
1. Independencecf standards cf arecf requiredcf forcf auditscf ofcf publiccf companies,cf butcf notcf forcf a
uditsco
f fcfprivatecf companies.
True False
2. Decisioncf makerscf demandcf reliablecf informationcf thatc f iscf providedcf bycf accountants.
True False
3. Informationc f asymmetryc f seldomc f occurs.
True False
4. Conflictscf ofcf interestcf oftencf occurcf betweencf absenteecf ownerscf andcf managers.
True False
5. Auditingc f servicesc f andc f attestationc f servicesc f arec f thecf same.
True False
6. Auditingcfiscfacftypecfofcfattestcfservice.
True False
7. Testingcfallcftransactions cfthatcfoccurredcfduringcf thecf periodcfiscfcostcfprohibitive.
True False
MultiplecfChoicecf Questions
, Auditing & Assurance Services
cf cf cf
8. Whycfdocfauditorscfgenerallycfusecfacfsamplingcfapproachcftocfevidencecfgathering?
A. Auditorscf arecf experts cf andcf docf notcf needcftocflookcf atcf muchcf tocf knowcf whethercfthecf fina
ncialcsf tatementscfarecfcorrectcforcfnot.
B. Auditorscf mustcfbalancecfthecf costcfofcfthecfauditcfwithcfthecf needc
fforcfprecision.
C. Auditorscfmustcflimitcftheircfexposurecftocftheircfauditeecftocfmaint
aincif ndependence.
D. Thecfauditor'scfrelationshipcfwithcfthecf auditeecfiscfgenerallycfadversarial,cfsocfthecf auditorcf
willcfnotcfhavecfaccesscftocfallcfofcfthecffinancialcfinformationcfofcfthecfcompany.
9. Whichcf ofcf thecf followingc f statements cf bestcf describes cf acf relationshipcf betweencf samplecf sizec
f andc
o
f thercfelements cfofcfauditing?
A. Ifc f materialityc f increases, c f soc f willc f t
hecfsamplecfsize.
B. Ifcf thecf desiredcf levelcf ofcf assurancec f increases,cf samplec f sizescf can
cf bec sf maller.
C. Ifcfmaterialitycfdecreases,cfsamplecfsizecfwillcfneedcf
tocif ncrease.
D. Therecf iscf nocf relationshipcf betweencfsamplecf sizecf andcf materialitycforcfthecf desiredcfl
evelco f fcfassurance.
10. Whichcf ofcf thecf followingcf statements cf aboutcf thecf studycf ofcf auditingcf iscf NOTcf true?
A. Thecf studyc f ofcf auditingc f canc f bec f valuablec f tocf futurec f accountants c f andc f businesscf dec
isioncfmakerscfwhethercforcfnotcftheycfplancftocfbecomecfauditors.
B. Thecf studycf ofcf auditingcf focusesc f oncf learningcf thec f analyticalcf andcf logicalcf skillscf necessa
rycf tocfevaluatecfthecfrelevancecfandcfreliabilitycfofcfinformation.
C. Thecf studycf ofcf auditingcf focusescf oncf learningcf thecf rules,cf techniques,cf andcf computat
ionscfrequiredcftocfanalyzecffinancialcfstatements.
D. Thecf studycf ofcf auditingcf beginscf withcf thecf understandingcf ofcf acf coherentcf logicalcf framew
orkcfandcftechniquescfusefulcfforcfgatheringcfandcfanalyzingcfevidencecfaboutcfothers'cfasser
tions.
11. Thecf basiccfpurposecf ofcf acffinancialcf statementcf auditcfiscfto
A. Detectcf
fraud.
B. Examinecf individualcf transactions cf socf thatcf thecf auditorcf maycf certifycf a
scf toctf heircfvalidity.
C. Providec f assurancec f regardingc f whetherc f thec f auditee's c f financialc f statements c f
arecffairlycfstated.
D. Assurecf thecf consistentcf applicationcf ofcf correctcf accounti
ngcfprocedures.
