TEST BANK For Auditing & Assurance Services:
A Systematic Approach, 12th Edition
Chapters 1 - 21 Complete
,Chapterxc1:xcAnxcIntroductionxctoxcAssurancexcandxcFinancialxcStatementxcAuditing
Chapterxc2:xcThexcFinancialxcStatementxcAuditingxcEnvironment
Chapterxc3:xcAuditxcPlanning,xcTypesxcofxcAuditxcTests,xcandxcMateriality
Chapterxc4:xcRiskxcAssessment
Chapterxc5:xcEvidencexcandxcDocumentation
Chapterxc6:xcInternalxcControlxcinxcaxcFinancialxcStatementxcAudit
Chapterxc7:xcAuditingxcInternalxcControlxcoverxcFinancialxcReporting
Chapterxc8:xcAuditxcSampling:xcAnxcOverviewxcandxcApplicationxctoxcTestsxcofxcControls
Chapterxc9:xcAuditxcSampling:xcAnxcApplicationxctoxcSubstantivexcTestsxcofxcAccountxcBalances
Chapterxc10:xcAuditingxcthexcRevenuexcProcess
Chapterxc11:xcAuditingxcthexcPurchasingxcProcess
Chapterxc12:xcAuditingxcthexcHumanxcResourcexcManagementxcProcess
Chapterxc13:xcAuditingxcthexcInventoryxcManagementxcProcess
Chapterxc14:xcAuditingxcthexcFinancing/InvestingxcProcess:xcPrepaidxcExpenses,xcIntangiblexcAsse
ts,xcandxcProperty,xcPlant,xcandxcEquipment
Chapterxc15:xcAuditingxcthexcFinancing/InvestingxcProcess:xcLong-
TermxcLiabilities,xcStockholders’xcEquity,xcandxcIncomexcStatementxcAccounts
Chapterxc16:xcAuditingxcthexcFinancing/InvestingxcProcess:xcCashxcandxcInvestments
Chapterxc17:xcCompletingxcthexcAuditxcEngagement
Chapterxc18:xcReportsxconxcAuditedxcFinancialxcStatements
Chapterxc19:xcProfessionalxcConduct,xcIndependence,xcandxcQualityxcManagement
Chapterxc20:xcLegalxcLiability
Chapterxc21:xcAssurance,xcAttestation,xcandxcInternalxcAuditingxcServices
,Auditingxc&xcAssurancexcServices:xcAxcSystematicxcApproach,xc12exc(Messier)xcC
hapterxc1x c AnxcIntroductionxctoxcAssurancexcandxcFinancialxcStatementxcAudit
ing
1) Auditingxcfocusesxconxcrules,xctechniques,xcandxccomputationsxcrequiredxctoxcpreparexcandxcan
alyzexcfinancialxcinformation.
ANSWER:x c FALSExcDiff
iculty:xc1xcEasy
Topic:x c ThexcImportancexcforxcStudyingxcAuditing
LearningxcObjective:x c 01-
01xcUnderstandxcwhyxcstudyingxcauditingxccanxcbexcvaluablexctoxcyouxcwhetherxcorxcnotxcyouxcplanxctoxc
becomexcanxcauditor,xcandxcwhyxcitxcisxcdifferentxcfromxcstudyingxcaccounting.
Bloom's:x c RememberxcA
ACSB:x c Communication
AICPA:x c BBxcLegal;xcFNxcDecisionxcMaking
2) Decisionxcmakersxcdemandxcreliablexcinformationxcthatxcisxcprovidedxcbyxcaccountants.
ANSWER:x c TRUExcDiffi
culty:xc1xcEasy
Topic:x c ThexcDemandxcforxcAuditingxcandxcAssurance
LearningxcObjective:x c 01-
02xcUnderstandxcthexcdemandxcforxcauditingxcandxcbexcablexctoxcexplainxcthexcdesiredxccharacteristicsxc
ofxcauditorsxcandxcauditxcservicesxcthroughxcanxcanalogyxctoxcaxchousexcinspectorxcandxcaxchousexcinspec
tionxcservice.
Bloom's:x c UnderstandxcA
ACSB:x c Communication
AICPA:x c FNxcDecisionxcMaking;xcBBxcIndustry
3) Informationxcasymmetryxcseldomxcoccurs.
ANSWER:x c FALSExcDiff
iculty:xc2xcMedium
Topic:x c ThexcDemandxcforxcAuditingxcandxcAssurance
LearningxcObjective:x c 01-
02xcUnderstandxcthexcdemandxcforxcauditingxcandxcbexcablexctoxcexplainxcthexcdesiredxccharacteristicsxc
ofxcauditorsxcandxcauditxcservicesxcthroughxcanxcanalogyxctoxcaxchousexcinspectorxcandxcaxchousexcinspec
tionxcservice.
Bloom's:x c Apply
AACSB:x c Communication
AICPA:x c BBxcIndustry;xcFNxcReporting
, 4) Conflictsxcofxcinterestxcoftenxcoccurxcbetweenxcabsenteexcownersxcandxcmanagers.
ANSWER:x c TRUExcDiffi
culty:xc2xcMedium
Topic:x c ThexcDemandxcforxcAuditingxcandxcAssurance
LearningxcObjective:x c 01-
02xcUnderstandxcthexcdemandxcforxcauditingxcandxcbexcablexctoxcexplainxcthexcdesiredxccharacteristicsxc
ofxcauditorsxcandxcauditxcservicesxcthroughxcanxcanalogyxctoxcaxchousexcinspectorxcandxcaxchousexcinspec
tionxcservice.
Bloom's:x c Apply
AACSB:x c Communication
AICPA:x c BBxcIndustry;xcFNxcReporting
5) Auditingxcservicesxcandxcattestationxcservicesxcarexcthexcsame.
ANSWER:x c FALSExcDiff
iculty:xc1xcEasy
Topic:x c Auditing,xcAttest,xcandxcAssurancexcServicesxcDefined
LearningxcObjective:x c 01-
03xcUnderstandxcthexcrelationshipsxcamongxcauditing,xcattestation,xcandxcassurancexcservices.
Bloom's:x c UnderstandxcA
ACSB:x c Communication
AICPA:x c BBxcIndustry;xcFNxcReporting
6) Auditingxcisxcaxctypexcofxcattestxcservice.
ANSWER:x c TRUExcDiffi
culty:xc1xcEasy
Topic:x c Auditing,xcAttest,xcandxcAssurancexcServicesxcDefined
LearningxcObjective:x c 01-
03xcUnderstandxcthexcrelationshipsxcamongxcauditing,xcattestation,xcandxcassurancexcservices.;xc01-
04xcKnowxcthexcbasicxcdefinitionxcofxcaxcfinancialxcstatementxcaudit.
Bloom's:x c UnderstandxcA
ACSB:x c Communication
AICPA:x c BBxcIndustry;xcFNxcReporting
7) Testingxcallxctransactionsxcthatxcoccurredxcduringxcthexcperiodxcisxccostxcprohibitive.
ANSWER:x c TRUExcDiffi
culty:xc2xcMediumxcTopic:
x c ThexcAuditxcProcess
LearningxcObjective:x c 01-
06xcBexcablexctoxcexplainxcwhyxconxcmostxcauditxcengagementsxcanxcauditorxctestsxconlyxcaxcsamplexcofxc
transactionsxcthatxcoccurred.
Bloom's:x c Apply
AACSB:x c Communication
A Systematic Approach, 12th Edition
Chapters 1 - 21 Complete
,Chapterxc1:xcAnxcIntroductionxctoxcAssurancexcandxcFinancialxcStatementxcAuditing
Chapterxc2:xcThexcFinancialxcStatementxcAuditingxcEnvironment
Chapterxc3:xcAuditxcPlanning,xcTypesxcofxcAuditxcTests,xcandxcMateriality
Chapterxc4:xcRiskxcAssessment
Chapterxc5:xcEvidencexcandxcDocumentation
Chapterxc6:xcInternalxcControlxcinxcaxcFinancialxcStatementxcAudit
Chapterxc7:xcAuditingxcInternalxcControlxcoverxcFinancialxcReporting
Chapterxc8:xcAuditxcSampling:xcAnxcOverviewxcandxcApplicationxctoxcTestsxcofxcControls
Chapterxc9:xcAuditxcSampling:xcAnxcApplicationxctoxcSubstantivexcTestsxcofxcAccountxcBalances
Chapterxc10:xcAuditingxcthexcRevenuexcProcess
Chapterxc11:xcAuditingxcthexcPurchasingxcProcess
Chapterxc12:xcAuditingxcthexcHumanxcResourcexcManagementxcProcess
Chapterxc13:xcAuditingxcthexcInventoryxcManagementxcProcess
Chapterxc14:xcAuditingxcthexcFinancing/InvestingxcProcess:xcPrepaidxcExpenses,xcIntangiblexcAsse
ts,xcandxcProperty,xcPlant,xcandxcEquipment
Chapterxc15:xcAuditingxcthexcFinancing/InvestingxcProcess:xcLong-
TermxcLiabilities,xcStockholders’xcEquity,xcandxcIncomexcStatementxcAccounts
Chapterxc16:xcAuditingxcthexcFinancing/InvestingxcProcess:xcCashxcandxcInvestments
Chapterxc17:xcCompletingxcthexcAuditxcEngagement
Chapterxc18:xcReportsxconxcAuditedxcFinancialxcStatements
Chapterxc19:xcProfessionalxcConduct,xcIndependence,xcandxcQualityxcManagement
Chapterxc20:xcLegalxcLiability
Chapterxc21:xcAssurance,xcAttestation,xcandxcInternalxcAuditingxcServices
,Auditingxc&xcAssurancexcServices:xcAxcSystematicxcApproach,xc12exc(Messier)xcC
hapterxc1x c AnxcIntroductionxctoxcAssurancexcandxcFinancialxcStatementxcAudit
ing
1) Auditingxcfocusesxconxcrules,xctechniques,xcandxccomputationsxcrequiredxctoxcpreparexcandxcan
alyzexcfinancialxcinformation.
ANSWER:x c FALSExcDiff
iculty:xc1xcEasy
Topic:x c ThexcImportancexcforxcStudyingxcAuditing
LearningxcObjective:x c 01-
01xcUnderstandxcwhyxcstudyingxcauditingxccanxcbexcvaluablexctoxcyouxcwhetherxcorxcnotxcyouxcplanxctoxc
becomexcanxcauditor,xcandxcwhyxcitxcisxcdifferentxcfromxcstudyingxcaccounting.
Bloom's:x c RememberxcA
ACSB:x c Communication
AICPA:x c BBxcLegal;xcFNxcDecisionxcMaking
2) Decisionxcmakersxcdemandxcreliablexcinformationxcthatxcisxcprovidedxcbyxcaccountants.
ANSWER:x c TRUExcDiffi
culty:xc1xcEasy
Topic:x c ThexcDemandxcforxcAuditingxcandxcAssurance
LearningxcObjective:x c 01-
02xcUnderstandxcthexcdemandxcforxcauditingxcandxcbexcablexctoxcexplainxcthexcdesiredxccharacteristicsxc
ofxcauditorsxcandxcauditxcservicesxcthroughxcanxcanalogyxctoxcaxchousexcinspectorxcandxcaxchousexcinspec
tionxcservice.
Bloom's:x c UnderstandxcA
ACSB:x c Communication
AICPA:x c FNxcDecisionxcMaking;xcBBxcIndustry
3) Informationxcasymmetryxcseldomxcoccurs.
ANSWER:x c FALSExcDiff
iculty:xc2xcMedium
Topic:x c ThexcDemandxcforxcAuditingxcandxcAssurance
LearningxcObjective:x c 01-
02xcUnderstandxcthexcdemandxcforxcauditingxcandxcbexcablexctoxcexplainxcthexcdesiredxccharacteristicsxc
ofxcauditorsxcandxcauditxcservicesxcthroughxcanxcanalogyxctoxcaxchousexcinspectorxcandxcaxchousexcinspec
tionxcservice.
Bloom's:x c Apply
AACSB:x c Communication
AICPA:x c BBxcIndustry;xcFNxcReporting
, 4) Conflictsxcofxcinterestxcoftenxcoccurxcbetweenxcabsenteexcownersxcandxcmanagers.
ANSWER:x c TRUExcDiffi
culty:xc2xcMedium
Topic:x c ThexcDemandxcforxcAuditingxcandxcAssurance
LearningxcObjective:x c 01-
02xcUnderstandxcthexcdemandxcforxcauditingxcandxcbexcablexctoxcexplainxcthexcdesiredxccharacteristicsxc
ofxcauditorsxcandxcauditxcservicesxcthroughxcanxcanalogyxctoxcaxchousexcinspectorxcandxcaxchousexcinspec
tionxcservice.
Bloom's:x c Apply
AACSB:x c Communication
AICPA:x c BBxcIndustry;xcFNxcReporting
5) Auditingxcservicesxcandxcattestationxcservicesxcarexcthexcsame.
ANSWER:x c FALSExcDiff
iculty:xc1xcEasy
Topic:x c Auditing,xcAttest,xcandxcAssurancexcServicesxcDefined
LearningxcObjective:x c 01-
03xcUnderstandxcthexcrelationshipsxcamongxcauditing,xcattestation,xcandxcassurancexcservices.
Bloom's:x c UnderstandxcA
ACSB:x c Communication
AICPA:x c BBxcIndustry;xcFNxcReporting
6) Auditingxcisxcaxctypexcofxcattestxcservice.
ANSWER:x c TRUExcDiffi
culty:xc1xcEasy
Topic:x c Auditing,xcAttest,xcandxcAssurancexcServicesxcDefined
LearningxcObjective:x c 01-
03xcUnderstandxcthexcrelationshipsxcamongxcauditing,xcattestation,xcandxcassurancexcservices.;xc01-
04xcKnowxcthexcbasicxcdefinitionxcofxcaxcfinancialxcstatementxcaudit.
Bloom's:x c UnderstandxcA
ACSB:x c Communication
AICPA:x c BBxcIndustry;xcFNxcReporting
7) Testingxcallxctransactionsxcthatxcoccurredxcduringxcthexcperiodxcisxccostxcprohibitive.
ANSWER:x c TRUExcDiffi
culty:xc2xcMediumxcTopic:
x c ThexcAuditxcProcess
LearningxcObjective:x c 01-
06xcBexcablexctoxcexplainxcwhyxconxcmostxcauditxcengagementsxcanxcauditorxctestsxconlyxcaxcsamplexcofxc
transactionsxcthatxcoccurred.
Bloom's:x c Apply
AACSB:x c Communication
