TEST BANK For Auditing & Assurance Services:
A Systematic Approach, 12th Edition
Chapters 1 - 21 Complete
,Chapter591:59An59Introduction59to59Assurance59and59Financial59Statement59Auditing
Chapter592:59The59Financial59Statement59Auditing59Environment
Chapter593:59Audit59Planning,59Types59of59Audit59Tests,59and59Materiality
Chapter594:59Risk59Assessment
Chapter595:59Evidence59and59Documentation
Chapter596:59Internal59Control59in59a59Financial59Statement59Audit
Chapter597:59Auditing59Internal59Control59over59Financial59Reporting
Chapter598:59Audit59Sampling:59An59Overview59and59Application59to59Tests59of59Controls
Chapter599:59Audit59Sampling:59An59Application59to59Substantive59Tests59of59Account59Balan
ces
Chapter5910:59Auditing59the59Revenue59Process
Chapter5911:59Auditing59the59Purchasing59Process
Chapter5912:59Auditing59the59Human59Resource59Management59Process
Chapter5913:59Auditing59the59Inventory59Management59Process
Chapter5914:59Auditing59the59Financing/Investing59Process:59Prepaid59Expenses,59Intangible
59Assets,59and59Property,59Plant,59and59Equipment
Chapter5915:59Auditing59the59Financing/Investing59Process:59Long-
Term59Liabilities,59Stockholders’59Equity,59and59Income59Statement59Accounts
Chapter5916:59Auditing59the59Financing/Investing59Process:59Cash59and59Investments
Chapter5917:59Completing59the59Audit59Engagement
Chapter5918:59Reports59on59Audited59Financial59Statements
Chapter5919:59Professional59Conduct,59Independence,59and59Quality59Management
Chapter5920:59Legal59Liability
Chapter5921:59Assurance,59Attestation,59and59Internal59Auditing59Services
,Auditing59&59Assurance59Services:59A59Systematic59Approach,5912e59(Messier)
59Chapter5915 9 An59Introduction59to59Assurance59and59Financial59Statement
59Auditing
1) Auditing59focuses59on59rules,59techniques,59and59computations59required59to59prepare59a
nd59analyze59financial59information.
ANSWER:5 9 FALSE59Di
fficulty:59159Easy
Topic:5 9 The59Importance59for59Studying59Auditing
Learning59Objective:5 9 01-
0159Understand59why59studying59auditing59can59be59valuable59to59you59whether59or59not59you59pl
an59to59become59an59auditor,59and59why59it59is59different59from59studying59accounting.
Bloom's:5 9 Remember59A
ACSB:5 9 Communication
AICPA:5 9 BB59Legal;59FN59Decision59Making
2) Decision59makers59demand59reliable59information59that59is59provided59by59accountants.
ANSWER:5 9 TRUE59Diff
iculty:59159Easy
Topic:5 9 The59Demand59for59Auditing59and59Assurance
Learning59Objective:5 9 01-
0259Understand59the59demand59for59auditing59and59be59able59to59explain59the59desired59character
istics59of59auditors59and59audit59services59through59an59analogy59to59a59house59inspector59and59a59
house59inspection59service.
Bloom's:5 9 Understand59
AACSB:5 9 Communicatio
n
AICPA:5 9 FN59Decision59Making;59BB59Industry
3) Information59asymmetry59seldom59occurs.
ANSWER:5 9 FALSE59Di
fficulty:59259Medium
Topic:5 9 The59Demand59for59Auditing59and59Assurance
Learning59Objective:5 9 01-
0259Understand59the59demand59for59auditing59and59be59able59to59explain59the59desired59character
istics59of59auditors59and59audit59services59through59an59analogy59to59a59house59inspector59and59a59
house59inspection59service.
Bloom's:5 9 Apply
AACSB:5 9 Communication
AICPA:5 9 BB59Industry;59FN59Reporting
, 4) Conflicts59of59interest59often59occur59between59absentee59owners59and59managers.
ANSWER:5 9 TRUE59Diff
iculty:59259Medium
Topic:5 9 The59Demand59for59Auditing59and59Assurance
Learning59Objective:5 9 01-
0259Understand59the59demand59for59auditing59and59be59able59to59explain59the59desired59character
istics59of59auditors59and59audit59services59through59an59analogy59to59a59house59inspector59and59a59
house59inspection59service.
Bloom's:5 9 Apply
AACSB:5 9 Communication
AICPA:5 9 BB59Industry;59FN59Reporting
5) Auditing59services59and59attestation59services59are59the59same.
ANSWER:5 9 FALSE59Di
fficulty:59159Easy
Topic:5 9 Auditing,59Attest,59and59Assurance59Services59Defined
Learning59Objective:5 9 01-
0359Understand59the59relationships59among59auditing,59attestation,59and59assurance59services.
Bloom's:5 9 Understand59
AACSB:5 9 Communicatio
n
AICPA:5 9 BB59Industry;59FN59Reporting
6) Auditing59is59a59type59of59attest59service.
ANSWER:5 9 TRUE59Diff
iculty:59159Easy
Topic:5 9 Auditing,59Attest,59and59Assurance59Services59Defined
Learning59Objective:5 9 01-
0359Understand59the59relationships59among59auditing,59attestation,59and59assurance59services.;590
1-0459Know59the59basic59definition59of59a59financial59statement59audit.
Bloom's:5 9 Understand59
AACSB:5 9 Communicatio
n
AICPA:5 9 BB59Industry;59FN59Reporting
7) Testing59all59transactions59that59occurred59during59the59period59is59cost59prohibitive.
ANSWER:5 9 TRUE59Diff
iculty:59259Medium59Topi
c:5 9 The59Audit59Process
Learning59Objective:5 9 01-
0659Be59able59to59explain59why59on59most59audit59engagements59an59auditor59tests59only59a59sam
ple59of59transactions59that59occurred.
A Systematic Approach, 12th Edition
Chapters 1 - 21 Complete
,Chapter591:59An59Introduction59to59Assurance59and59Financial59Statement59Auditing
Chapter592:59The59Financial59Statement59Auditing59Environment
Chapter593:59Audit59Planning,59Types59of59Audit59Tests,59and59Materiality
Chapter594:59Risk59Assessment
Chapter595:59Evidence59and59Documentation
Chapter596:59Internal59Control59in59a59Financial59Statement59Audit
Chapter597:59Auditing59Internal59Control59over59Financial59Reporting
Chapter598:59Audit59Sampling:59An59Overview59and59Application59to59Tests59of59Controls
Chapter599:59Audit59Sampling:59An59Application59to59Substantive59Tests59of59Account59Balan
ces
Chapter5910:59Auditing59the59Revenue59Process
Chapter5911:59Auditing59the59Purchasing59Process
Chapter5912:59Auditing59the59Human59Resource59Management59Process
Chapter5913:59Auditing59the59Inventory59Management59Process
Chapter5914:59Auditing59the59Financing/Investing59Process:59Prepaid59Expenses,59Intangible
59Assets,59and59Property,59Plant,59and59Equipment
Chapter5915:59Auditing59the59Financing/Investing59Process:59Long-
Term59Liabilities,59Stockholders’59Equity,59and59Income59Statement59Accounts
Chapter5916:59Auditing59the59Financing/Investing59Process:59Cash59and59Investments
Chapter5917:59Completing59the59Audit59Engagement
Chapter5918:59Reports59on59Audited59Financial59Statements
Chapter5919:59Professional59Conduct,59Independence,59and59Quality59Management
Chapter5920:59Legal59Liability
Chapter5921:59Assurance,59Attestation,59and59Internal59Auditing59Services
,Auditing59&59Assurance59Services:59A59Systematic59Approach,5912e59(Messier)
59Chapter5915 9 An59Introduction59to59Assurance59and59Financial59Statement
59Auditing
1) Auditing59focuses59on59rules,59techniques,59and59computations59required59to59prepare59a
nd59analyze59financial59information.
ANSWER:5 9 FALSE59Di
fficulty:59159Easy
Topic:5 9 The59Importance59for59Studying59Auditing
Learning59Objective:5 9 01-
0159Understand59why59studying59auditing59can59be59valuable59to59you59whether59or59not59you59pl
an59to59become59an59auditor,59and59why59it59is59different59from59studying59accounting.
Bloom's:5 9 Remember59A
ACSB:5 9 Communication
AICPA:5 9 BB59Legal;59FN59Decision59Making
2) Decision59makers59demand59reliable59information59that59is59provided59by59accountants.
ANSWER:5 9 TRUE59Diff
iculty:59159Easy
Topic:5 9 The59Demand59for59Auditing59and59Assurance
Learning59Objective:5 9 01-
0259Understand59the59demand59for59auditing59and59be59able59to59explain59the59desired59character
istics59of59auditors59and59audit59services59through59an59analogy59to59a59house59inspector59and59a59
house59inspection59service.
Bloom's:5 9 Understand59
AACSB:5 9 Communicatio
n
AICPA:5 9 FN59Decision59Making;59BB59Industry
3) Information59asymmetry59seldom59occurs.
ANSWER:5 9 FALSE59Di
fficulty:59259Medium
Topic:5 9 The59Demand59for59Auditing59and59Assurance
Learning59Objective:5 9 01-
0259Understand59the59demand59for59auditing59and59be59able59to59explain59the59desired59character
istics59of59auditors59and59audit59services59through59an59analogy59to59a59house59inspector59and59a59
house59inspection59service.
Bloom's:5 9 Apply
AACSB:5 9 Communication
AICPA:5 9 BB59Industry;59FN59Reporting
, 4) Conflicts59of59interest59often59occur59between59absentee59owners59and59managers.
ANSWER:5 9 TRUE59Diff
iculty:59259Medium
Topic:5 9 The59Demand59for59Auditing59and59Assurance
Learning59Objective:5 9 01-
0259Understand59the59demand59for59auditing59and59be59able59to59explain59the59desired59character
istics59of59auditors59and59audit59services59through59an59analogy59to59a59house59inspector59and59a59
house59inspection59service.
Bloom's:5 9 Apply
AACSB:5 9 Communication
AICPA:5 9 BB59Industry;59FN59Reporting
5) Auditing59services59and59attestation59services59are59the59same.
ANSWER:5 9 FALSE59Di
fficulty:59159Easy
Topic:5 9 Auditing,59Attest,59and59Assurance59Services59Defined
Learning59Objective:5 9 01-
0359Understand59the59relationships59among59auditing,59attestation,59and59assurance59services.
Bloom's:5 9 Understand59
AACSB:5 9 Communicatio
n
AICPA:5 9 BB59Industry;59FN59Reporting
6) Auditing59is59a59type59of59attest59service.
ANSWER:5 9 TRUE59Diff
iculty:59159Easy
Topic:5 9 Auditing,59Attest,59and59Assurance59Services59Defined
Learning59Objective:5 9 01-
0359Understand59the59relationships59among59auditing,59attestation,59and59assurance59services.;590
1-0459Know59the59basic59definition59of59a59financial59statement59audit.
Bloom's:5 9 Understand59
AACSB:5 9 Communicatio
n
AICPA:5 9 BB59Industry;59FN59Reporting
7) Testing59all59transactions59that59occurred59during59the59period59is59cost59prohibitive.
ANSWER:5 9 TRUE59Diff
iculty:59259Medium59Topi
c:5 9 The59Audit59Process
Learning59Objective:5 9 01-
0659Be59able59to59explain59why59on59most59audit59engagements59an59auditor59tests59only59a59sam
ple59of59transactions59that59occurred.
