Test Bank for Auditing and Assurance services an integrated approach 17th edition by Alvin A. Arens, Randal J. Elder, Mark S. Beasley, Chris E. Hogan

Auditing and Assurance Services, 17e (Arens/Elder/Beasley)
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Chapter 1 The Demand for Audit and Other Assurance
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Services
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Learning Objective 1-1
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1

,2

,1) The Sarbanes-Oxley Act applies to which of the following companies?
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A) All companies srsr



B) Privately held companies srsr srsr



C) Public companies srsr



D) All public companies and privately held companies with assets greater than $500
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million Answer: C
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Terms: Sarbanes-Oxley srsr



Act Diff: Easy
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Objective: LO 1-1 s r s r srsr



AACSB: Reflective thinking skills srsr srsr srsr



Topic: SOX
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2) Which of the following is considered audit
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evidence? A)
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Oral statements Written
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made by management Communications
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Y N N

B)
Oral statements srsr Written Auditor
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srsrmanagement n
N Y Y

C)
Oral statements srsr Written Auditor
made by management
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Y Y Y

D)
Oral statements srsr Written Auditor
made by management
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N N Y

Answer: C s r s r



Terms: Audit evidence srsr srsr



Diff: Moderate
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Objective: LO 1-1
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AACSB: Reflective thinking skills s r s r srsr srsr




3

, 3) Evidence is paramount to audit and attestation engagements. List the four basic types of
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audit evidence.
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Answer: The four types of audit and attestation evidence include:
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1. Electronic and documentary data about transactions srsr srsr srsr srsr srsr



2. Written and electronic communications with outsiders
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3. Observations by the auditor srsr srsr srsr



4. Oral testimony of the auditee (client)
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Terms: Basic types of audit
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evidence Diff: Easy
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Objective: LO 1-1 s r s r srsr



AACSB: Reflective thinking skills s r s r srsr srsr




4) The criteria by which an auditor evaluates the information under audit may vary with
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the information being audited.
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A) True
B) False
Answer:
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A
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Terms: Criteria which an auditor evaluates information
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Diff: Easy
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Objective: LO 1-1 s r s r srsr



AACSB: Reflective thinking skills s r s r srsr srsr




5) The criteria used by an external auditor to evaluate published financial statements are
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known as generally accepted auditing standards.
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A) True
B) False
Answer:
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B
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Terms: Criteria used by external auditor to evaluate published financial
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statements Diff: Easy
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Objective: LO 1-1 s r s r srsr



AACSB: Reflective thinking skills s r s r srsr srsr




6) The Sarbanes-Oxley Act establishes standards related to the audits of privately
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held companies.
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A) True
B) False
Answer:
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B
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Terms: Sarbanes-Oxley srsr



Act Diff: Easy
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Objective: LO 1-1 s r s r srsr



AACSB: Reflective thinking skills srsr srsr srsr



Topic: SOX
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4