TEST
BANK
FOR
AUDITIN
G&
ASSURA
NCE
SERVICE
S 9TH
EDITION
BY
TIMOTH
Y
LOUWER
S, JERRY
STRAWS
ER
1) The caudit cobjective cthat call ctransactions cand caccounts cthat cshould cbe cpresented cin cthe
cfinancial cstatements care cin cfact cincluded cis crelated cto cwhich cof cthe cPCAOB cassertions?
A) Existence
B) Rights cand cobligations
C) Completeness
D) Valuation
2) Cutoff ctests cdesigned cto cdetect cpurchases cmade cbefore cthe cend cof cthe cyear cthat
chave cbeen crecorded cin cthe csubsequent cyear cprovide cassurance cabout cmanagement's
cassertion cof
A) presentation cand cdisclosure.
B) completeness.
C) rights cand cobligations.
1
, D) existence.
3) During can caudit cof can centity's cstockholders' cequity caccounts, cthe cauditor cdetermines
cwhether cthere care crestrictions con cretained cearnings cresulting cfrom cloans, cagreements, cor
cstate claw. cThis caudit cprocedure cmost clikely cis cintended cto cverify cmanagement's
cassertion cof
A) existence cor coccurrence.
B) completeness.
C) valuation cor callocation.
D) presentation cand cdisclosure.
4) The cconfirmation cof can caccount cpayable cbalance cselected cfrom cthe cgeneral cledger
cprovides cprimary cevidence cregarding cwhich cmanagement cassertion?
A) Completeness
B) Valuation
C) Allocation
D) Existence
2
,5) What ctype cof cevidence cwould cprovide cthe chighest clevel cof cassurance cin can
cattestation cengagement?
A) Evidence csecured csolely cfrom cwithin cthe centity.
B) Evidence cobtained cfrom cindependent csources.
C) Evidence cobtained cindirectly.
D) Evidence cobtained cfrom cmultiple cinternal cinquiries.
6) Which cof cthe cfollowing cmanagement cassertions cis can cauditor cmost clikely ctesting cif
cthe caudit cobjective cstates cthat call cinventory con chand cis creflected cin cthe cending
cinventory cbalance?
A) The centity chas crights cto cthe cinventory.
B) Inventory cis cproperly cvalued.
C) Inventory cis cproperly cpresented cin cthe cfinancial cstatements.
D) Inventory cis ccomplete.
7) An cauditor ctraces cthe cserial cnumbers con cequipment cto ca cnonissuer's csubledger. cWhich
cof cthe cfollowing cmanagement cassertions cis csupported cby cthis ctest?
A) Valuation cand callocation
B) Completeness
C) Rights cand cobligations
D) Presentation cand cdisclosure
8) An cauditor chas csubstantial cdoubt cabout cthe centity's cability cto ccontinue cas ca cgoing
cconcern cfor ca creasonable cperiod cof ctime cbecause cof cnegative ccash cflows cand cworking
ccapital cdeficiencies. cUnder cthese ccircumstances, cthe cauditor cwould cbe cmost cconcerned
cabout cthe
A) control cenvironment cfactors cthat caffect cthe corganizational cstructure.
B) correlation cof cdetection crisk cand cinherent crisk.
C) effectiveness cof cthe centity's cinternal ccontrol cactivities.
D) possible ceffects con cthe centity's cfinancial cstatements.
9) Which cof cthe cfollowing ctypes cof caudit cevidence cprovides ctheleast cassurance cof creliability?
A) Receivable cconfirmations creceived cfrom cthe cclient's ccustomers.
B) Prenumbered creceiving creports ccompleted cby cthe cclient's cemployees.
C) Prior cmonths' cbank cstatements cobtained cfrom cthe cclient.
D) Municipal cproperty ctax cbills cprepared cin cthe cclient's cname.
3
, 10) Which cof cthe cfollowing cis ca cmanagement cassertion cregarding caccount cbalances cat cthe
cperiod cend?
A) Transactions cand cevents cthat chave cbeen crecorded chave coccurred cand cpertain
cto cthe centity.
B) Transactions cand cevents chave cbeen crecorded cin cthe cproper caccounts.
C) The centity cholds cor ccontrols cthe crights cto cassets, cand cliabilities care cobligations
cof cthe centity.
D) Amounts cand cother cdata crelated cto cthe ctransactions cand cevents chave cbeen
crecorded cappropriately.
11) A cpractitioner cis cengaged cto cexpress can copinion con cmanagement's cassertion cthat cthe
csquare cfootage cof ca cwarehouse coffered cfor csale cis c150,000 csquare cfeet. cThe
cpractitioner cshould crefer cto cwhich cof cthe cfollowing csources cfor cprofessional
cguidance?
A) Statement cof cAuditing cStandards.
B) Statements con cStandards cfor cAttestation cEngagements.
C) Statements con cStandards cfor cAccounting cand cReview cServices.
D) Statements con cStandards cfor cConsulting cServices.
12) In cauditing cthe clong-term cdebt caccount, can cauditor's cprocedures cmost clikely cwould
cfocus cprimarily con cmanagement's cassertion cof
A) existence.
B) completeness.
C) allocation.
D) rights cand cobligations.
13) An cauditor cselected citems cfor ctest ccounts cfrom cthe cclient's cwarehouse cduring cthe
cphysical cinventory cobservation. cThe cauditor cthen ctraced cthese ctest ccounts cinto cthe
cdetailed cinventory clisting cthat cultimately cagreed cto cthe cfinancial cstatements. cThis
cprocedure cmost clikely cprovided cevidence cconcerning cmanagement's cassertion cof
A) completeness.
B) valuation.
C) presentation cand cdisclosure.
D) existence.
E) rights cand cobligations.
4
BANK
FOR
AUDITIN
G&
ASSURA
NCE
SERVICE
S 9TH
EDITION
BY
TIMOTH
Y
LOUWER
S, JERRY
STRAWS
ER
1) The caudit cobjective cthat call ctransactions cand caccounts cthat cshould cbe cpresented cin cthe
cfinancial cstatements care cin cfact cincluded cis crelated cto cwhich cof cthe cPCAOB cassertions?
A) Existence
B) Rights cand cobligations
C) Completeness
D) Valuation
2) Cutoff ctests cdesigned cto cdetect cpurchases cmade cbefore cthe cend cof cthe cyear cthat
chave cbeen crecorded cin cthe csubsequent cyear cprovide cassurance cabout cmanagement's
cassertion cof
A) presentation cand cdisclosure.
B) completeness.
C) rights cand cobligations.
1
, D) existence.
3) During can caudit cof can centity's cstockholders' cequity caccounts, cthe cauditor cdetermines
cwhether cthere care crestrictions con cretained cearnings cresulting cfrom cloans, cagreements, cor
cstate claw. cThis caudit cprocedure cmost clikely cis cintended cto cverify cmanagement's
cassertion cof
A) existence cor coccurrence.
B) completeness.
C) valuation cor callocation.
D) presentation cand cdisclosure.
4) The cconfirmation cof can caccount cpayable cbalance cselected cfrom cthe cgeneral cledger
cprovides cprimary cevidence cregarding cwhich cmanagement cassertion?
A) Completeness
B) Valuation
C) Allocation
D) Existence
2
,5) What ctype cof cevidence cwould cprovide cthe chighest clevel cof cassurance cin can
cattestation cengagement?
A) Evidence csecured csolely cfrom cwithin cthe centity.
B) Evidence cobtained cfrom cindependent csources.
C) Evidence cobtained cindirectly.
D) Evidence cobtained cfrom cmultiple cinternal cinquiries.
6) Which cof cthe cfollowing cmanagement cassertions cis can cauditor cmost clikely ctesting cif
cthe caudit cobjective cstates cthat call cinventory con chand cis creflected cin cthe cending
cinventory cbalance?
A) The centity chas crights cto cthe cinventory.
B) Inventory cis cproperly cvalued.
C) Inventory cis cproperly cpresented cin cthe cfinancial cstatements.
D) Inventory cis ccomplete.
7) An cauditor ctraces cthe cserial cnumbers con cequipment cto ca cnonissuer's csubledger. cWhich
cof cthe cfollowing cmanagement cassertions cis csupported cby cthis ctest?
A) Valuation cand callocation
B) Completeness
C) Rights cand cobligations
D) Presentation cand cdisclosure
8) An cauditor chas csubstantial cdoubt cabout cthe centity's cability cto ccontinue cas ca cgoing
cconcern cfor ca creasonable cperiod cof ctime cbecause cof cnegative ccash cflows cand cworking
ccapital cdeficiencies. cUnder cthese ccircumstances, cthe cauditor cwould cbe cmost cconcerned
cabout cthe
A) control cenvironment cfactors cthat caffect cthe corganizational cstructure.
B) correlation cof cdetection crisk cand cinherent crisk.
C) effectiveness cof cthe centity's cinternal ccontrol cactivities.
D) possible ceffects con cthe centity's cfinancial cstatements.
9) Which cof cthe cfollowing ctypes cof caudit cevidence cprovides ctheleast cassurance cof creliability?
A) Receivable cconfirmations creceived cfrom cthe cclient's ccustomers.
B) Prenumbered creceiving creports ccompleted cby cthe cclient's cemployees.
C) Prior cmonths' cbank cstatements cobtained cfrom cthe cclient.
D) Municipal cproperty ctax cbills cprepared cin cthe cclient's cname.
3
, 10) Which cof cthe cfollowing cis ca cmanagement cassertion cregarding caccount cbalances cat cthe
cperiod cend?
A) Transactions cand cevents cthat chave cbeen crecorded chave coccurred cand cpertain
cto cthe centity.
B) Transactions cand cevents chave cbeen crecorded cin cthe cproper caccounts.
C) The centity cholds cor ccontrols cthe crights cto cassets, cand cliabilities care cobligations
cof cthe centity.
D) Amounts cand cother cdata crelated cto cthe ctransactions cand cevents chave cbeen
crecorded cappropriately.
11) A cpractitioner cis cengaged cto cexpress can copinion con cmanagement's cassertion cthat cthe
csquare cfootage cof ca cwarehouse coffered cfor csale cis c150,000 csquare cfeet. cThe
cpractitioner cshould crefer cto cwhich cof cthe cfollowing csources cfor cprofessional
cguidance?
A) Statement cof cAuditing cStandards.
B) Statements con cStandards cfor cAttestation cEngagements.
C) Statements con cStandards cfor cAccounting cand cReview cServices.
D) Statements con cStandards cfor cConsulting cServices.
12) In cauditing cthe clong-term cdebt caccount, can cauditor's cprocedures cmost clikely cwould
cfocus cprimarily con cmanagement's cassertion cof
A) existence.
B) completeness.
C) allocation.
D) rights cand cobligations.
13) An cauditor cselected citems cfor ctest ccounts cfrom cthe cclient's cwarehouse cduring cthe
cphysical cinventory cobservation. cThe cauditor cthen ctraced cthese ctest ccounts cinto cthe
cdetailed cinventory clisting cthat cultimately cagreed cto cthe cfinancial cstatements. cThis
cprocedure cmost clikely cprovided cevidence cconcerning cmanagement's cassertion cof
A) completeness.
B) valuation.
C) presentation cand cdisclosure.
D) existence.
E) rights cand cobligations.
4
