Auditing & Assurance Services
k k k
TEST BANK k
Auditing & Assurance Services: A Systematic Appro
k k k k k k
ach, 11th Edition Chapters 1 - 21
k k k k k k k
,Auditing & Assurance Services
k k k
Chapterk1:kAnkIntroductionktokAssurancekandkFinancialkStatementkAuditing
Chapterk2:kThekFinancialkStatementkAuditingkEnvironment
Chapterk3:kAuditkPlanning,kTypeskofkAuditkTests,kandkMateriality
Chapterk4:kRiskkAssessment
Chapterk5:kEvidencekandkDocumentation
Chapterk6:kInternalkControlkinkakFinancialkStatementkAudit
Chapterk7:kAuditingkInternalkControlkoverkFinancialkReporting
Chapterk8:kAuditkSampling:kAnkOverviewkandkApplicationktokTestskofkControls
Chapterk9:kAuditkSampling:kAnkApplicationktokSubstantivekTestskofkAccountkBalances
Chapterk10:kAuditingkthekRevenuekProcess
Chapterk11:kAuditingkthekPurchasingkProcess
Chapterk12:kAuditingkthekHumankResourcekManagementkProcess
Chapterk13:kAuditingkthekInventorykManagementkProcess
Chapterk14:kAuditingkthekFinancing/InvestingkProcess:kPrepaidkExpenses,kIntangiblekAssets,ka
ndkProperty,kPlant,kandkEquipment
Chapterk15:kAuditingkthekFinancing/InvestingkProcess:kLong-
TermkLiabilities,kStockholders’kEquity,kandkIncomekStatementkAccounts
Chapterk16:kAuditingkthekFinancing/InvestingkProcess:kCashkandkInvestments
Chapterk17:kCompletingkthekAuditkEngagement
Chapterk18:kReportskonkAuditedkFinancialkStatements
Chapterk19:kProfessionalkConduct,kIndependence,kandkQualitykManagement
Chapterk20:kLegalkLiability
Chapterk21:kAssurance,kAttestation,kandkInternalkAuditingkServices
,Auditing & Assurance Services
k k k
Chapter 01 k k
An Introduction to Assurance and Financial Statement Auditing
k k k k k k k
Truek /k Falsek Questions
1. Independencek standards k arek requiredk fork auditsk ofk publick companies,k butk notk fork auditsko
fkprivatekcompanies.
True False
2. Decisionk makersk demand k reliablek informationk thatk isk providedk byk accountants.
True False
3. Informationk asymmetryk seldomk occurs.
True False
4. Conflictsk ofk interestkoftenkoccurk betweenk absenteek ownersk andk managers.
True False
5. Auditingk servicesk andk attestationk servicesk arek thek same.
True False
6. Auditingkiskaktypekofkattestkservice.
True False
7. Testingkallktransactions kthatkoccurredkduringkthekperiodkiskcostkprohibitive.
True False
MultiplekChoicek Questions
, Auditing & Assurance Services
k k k
8. Whykdokauditorskgenerallykusekaksamplingkapproachktokevidencekgathering?
A. Auditorsk arekexperts k andkdoknotkneedktoklookkatkmuchktokknowkwhetherkthekfinancialkst
atementskarekcorrectkorknot.
B. Auditorsk mustkbalancekthekcostkofkthekauditkwithkthekneedkforkp
recision.
C. Auditorskmustklimitktheirkexposurektoktheirkauditeektokmaintainki
ndependence.
D. Thekauditor's krelationshipkwithkthekauditeekiskgenerallykadversarial,ksokthekauditorkwillkn
otkhavekaccessktokallkofkthekfinancialkinformationkofkthekcompany.
9. Whichk ofk thek followingk statements k bestk describesk ak relationshipk betweenk samplek sizek andko
therkelementskofkauditing?
A. Ifk materialityk increases, k sok willk thek
sampleksize.
B. Ifk thek desiredk levelk ofk assurancek increases,k samplek sizesk cank beks
maller.
C. Ifkmaterialitykdecreases,ksampleksizekwillkneedktoki
ncrease.
D. Therekisknokrelationshipk betweenksampleksizek andk materialitykorkthek desiredklevelko
fkassurance.
10. Whichk ofkthek followingk statements k aboutk thek studyk ofk auditingk isk NOTk true?
A. Thek studyk ofk auditingk cank bek valuablek tok futurek accountants k andk businessk decisionk
makerskwhetherkorknotktheykplanktokbecomekauditors.
B. Thek studyk ofk auditingk focusesk onk learningk thek analyticalk andk logicalk skills k necessaryk toke
valuatekthekrelevancekandkreliabilitykofkinformation.
C. Thek studyk ofk auditingk focusesk onk learningk thek rules,k techniques,k andk computationskr
equiredktokanalyzekfinancialkstatements.
D. Thek studyk ofk auditingk beginsk withk thek understanding k ofk ak coherentk logicalk frameworkka
ndktechniqueskusefulkforkgatheringkandkanalyzingkevidencekaboutkothers'kassertions.
11. Thekbasickpurposekofkakfinancialkstatementkauditk iskto
A. Detectk
fraud.
B. Examinek individualk transactions k sok thatk thek auditork mayk certifyk ask tokt
heirkvalidity.
C. Providek assurancek regardingk whetherk thek auditee's k financialk statements k arekf
airlykstated.
D. Assurek thek consistent k applicationk ofk correctk accountingk
procedures.
k k k
TEST BANK k
Auditing & Assurance Services: A Systematic Appro
k k k k k k
ach, 11th Edition Chapters 1 - 21
k k k k k k k
,Auditing & Assurance Services
k k k
Chapterk1:kAnkIntroductionktokAssurancekandkFinancialkStatementkAuditing
Chapterk2:kThekFinancialkStatementkAuditingkEnvironment
Chapterk3:kAuditkPlanning,kTypeskofkAuditkTests,kandkMateriality
Chapterk4:kRiskkAssessment
Chapterk5:kEvidencekandkDocumentation
Chapterk6:kInternalkControlkinkakFinancialkStatementkAudit
Chapterk7:kAuditingkInternalkControlkoverkFinancialkReporting
Chapterk8:kAuditkSampling:kAnkOverviewkandkApplicationktokTestskofkControls
Chapterk9:kAuditkSampling:kAnkApplicationktokSubstantivekTestskofkAccountkBalances
Chapterk10:kAuditingkthekRevenuekProcess
Chapterk11:kAuditingkthekPurchasingkProcess
Chapterk12:kAuditingkthekHumankResourcekManagementkProcess
Chapterk13:kAuditingkthekInventorykManagementkProcess
Chapterk14:kAuditingkthekFinancing/InvestingkProcess:kPrepaidkExpenses,kIntangiblekAssets,ka
ndkProperty,kPlant,kandkEquipment
Chapterk15:kAuditingkthekFinancing/InvestingkProcess:kLong-
TermkLiabilities,kStockholders’kEquity,kandkIncomekStatementkAccounts
Chapterk16:kAuditingkthekFinancing/InvestingkProcess:kCashkandkInvestments
Chapterk17:kCompletingkthekAuditkEngagement
Chapterk18:kReportskonkAuditedkFinancialkStatements
Chapterk19:kProfessionalkConduct,kIndependence,kandkQualitykManagement
Chapterk20:kLegalkLiability
Chapterk21:kAssurance,kAttestation,kandkInternalkAuditingkServices
,Auditing & Assurance Services
k k k
Chapter 01 k k
An Introduction to Assurance and Financial Statement Auditing
k k k k k k k
Truek /k Falsek Questions
1. Independencek standards k arek requiredk fork auditsk ofk publick companies,k butk notk fork auditsko
fkprivatekcompanies.
True False
2. Decisionk makersk demand k reliablek informationk thatk isk providedk byk accountants.
True False
3. Informationk asymmetryk seldomk occurs.
True False
4. Conflictsk ofk interestkoftenkoccurk betweenk absenteek ownersk andk managers.
True False
5. Auditingk servicesk andk attestationk servicesk arek thek same.
True False
6. Auditingkiskaktypekofkattestkservice.
True False
7. Testingkallktransactions kthatkoccurredkduringkthekperiodkiskcostkprohibitive.
True False
MultiplekChoicek Questions
, Auditing & Assurance Services
k k k
8. Whykdokauditorskgenerallykusekaksamplingkapproachktokevidencekgathering?
A. Auditorsk arekexperts k andkdoknotkneedktoklookkatkmuchktokknowkwhetherkthekfinancialkst
atementskarekcorrectkorknot.
B. Auditorsk mustkbalancekthekcostkofkthekauditkwithkthekneedkforkp
recision.
C. Auditorskmustklimitktheirkexposurektoktheirkauditeektokmaintainki
ndependence.
D. Thekauditor's krelationshipkwithkthekauditeekiskgenerallykadversarial,ksokthekauditorkwillkn
otkhavekaccessktokallkofkthekfinancialkinformationkofkthekcompany.
9. Whichk ofk thek followingk statements k bestk describesk ak relationshipk betweenk samplek sizek andko
therkelementskofkauditing?
A. Ifk materialityk increases, k sok willk thek
sampleksize.
B. Ifk thek desiredk levelk ofk assurancek increases,k samplek sizesk cank beks
maller.
C. Ifkmaterialitykdecreases,ksampleksizekwillkneedktoki
ncrease.
D. Therekisknokrelationshipk betweenksampleksizek andk materialitykorkthek desiredklevelko
fkassurance.
10. Whichk ofkthek followingk statements k aboutk thek studyk ofk auditingk isk NOTk true?
A. Thek studyk ofk auditingk cank bek valuablek tok futurek accountants k andk businessk decisionk
makerskwhetherkorknotktheykplanktokbecomekauditors.
B. Thek studyk ofk auditingk focusesk onk learningk thek analyticalk andk logicalk skills k necessaryk toke
valuatekthekrelevancekandkreliabilitykofkinformation.
C. Thek studyk ofk auditingk focusesk onk learningk thek rules,k techniques,k andk computationskr
equiredktokanalyzekfinancialkstatements.
D. Thek studyk ofk auditingk beginsk withk thek understanding k ofk ak coherentk logicalk frameworkka
ndktechniqueskusefulkforkgatheringkandkanalyzingkevidencekaboutkothers'kassertions.
11. Thekbasickpurposekofkakfinancialkstatementkauditk iskto
A. Detectk
fraud.
B. Examinek individualk transactions k sok thatk thek auditork mayk certifyk ask tokt
heirkvalidity.
C. Providek assurancek regardingk whetherk thek auditee's k financialk statements k arekf
airlykstated.
D. Assurek thek consistent k applicationk ofk correctk accountingk
procedures.
