uditing and Assurance Services, 7th Edition – Test Bank by Timothy Louwers

,Auditingb&bAssurancebServices,b7eb(Louwers)bC
hapterb1b AuditingbandbAssurancebServices

1) Thebauditbobjectivebthatballbtransactionsbandbaccountsbthatbshouldbbebpresentedbinbthebfinancialbs
tatementsbarebinbfactbincludedbisbrelatedbtobwhichbofbthebPCAOBbassertions?
A) Existence.
B) Rightsbandbobligations.
C) Completeness.
D) Valuation.bAn
swer:b CbDifficult
y:b1bEasy
Topic:b Management'sbFinancialbStatementbAssertions
LearningbObjective:b 01-
03bDescribebandbdefinebthebassertionsbthatbmanagementbmakesbaboutbthebrecognition,bmeasurement
,bpresentation,bandbdisclosurebofbthebfinancialbstatementsbandbexplainbwhybauditorsbusebthembasbtheb
focalbpointbofbthebaudit.
Blooms:b Remember
AACSB:b AnalyticalbThinkingbAcces
sibility:b KeyboardbNavigation

2) Cutoffbtestsbdesignedbtobdetectbpurchasesbmadebbeforebthebendbofbthebyearbthatbhavebbeenbr
ecordedbinbthebsubsequentbyearbprovidebassurancebaboutbmanagement'sbassertionbof:
A) presentationbandbdisclosure.
B) completeness.
C) rightsbandbobligations.
D) existence.bAnswer
:b BbDifficulty:b2bMed
ium
Topic:b Management'sbFinancialbStatementbAssertions
LearningbObjective:b 01-
03bDescribebandbdefinebthebassertionsbthatbmanagementbmakesbaboutbthebrecognition,bmeasurement
,bpresentation,bandbdisclosurebofbthebfinancialbstatementsbandbexplainbwhybauditorsbusebthembasbtheb
focalbpointbofbthebaudit.
Blooms:b Remember
AACSB:b AnalyticalbThinkingbAcces
sibility:b KeyboardbNavigation




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,3) Duringbanbauditbofbanbentity'sbstockholders'bequitybaccounts,bthebauditorbdeterminesbwhetherbt
herebarebrestrictionsbonbretainedbearningsbresultingbfrombloans,bagreements,borbstateblaw.bThisbau
ditbprocedurebmostblikelybisbintendedbtobverifybmanagement'sbassertionbof:
A) existenceborboccurrence.
B) completeness.
C) valuationborballocation.
D) presentationbandbdisclosure.b
Answer:b D
Difficulty:b2bMedium
Topic:b Management'sbFinancialbStatementbAssertions
LearningbObjective:b 01-
03bDescribebandbdefinebthebassertionsbthatbmanagementbmakesbaboutbthebrecognition,bmeasurement
,bpresentation,bandbdisclosurebofbthebfinancialbstatementsbandbexplainbwhybauditorsbusebthembasbtheb
focalbpointbofbthebaudit.
Blooms:b Remember
AACSB:b AnalyticalbThinkingbAcces
sibility:b KeyboardbNavigation

4) Thebconfirmationbofbanbaccountbpayablebbalancebselectedbfrombthebgeneralbledgerbprovidesb
primarybevidencebregardingbwhichbmanagementbassertion?
A) Completeness.
B) Valuation.
C) Allocation.
D) Existence.bAnswe
r:b DbDifficulty:b2bMe
dium
Topic:b Management'sbFinancialbStatementbAssertions
LearningbObjective:b 01-
03bDescribebandbdefinebthebassertionsbthatbmanagementbmakesbaboutbthebrecognition,bmeasurement
,bpresentation,bandbdisclosurebofbthebfinancialbstatementsbandbexplainbwhybauditorsbusebthembasbtheb
focalbpointbofbthebaudit.
Blooms:b Remember
AACSB:b AnalyticalbThinkingbAcces
sibility:b KeyboardbNavigation

5) Whatbtypebofbevidencebwouldbprovidebthebhighestblevelbofbassurancebinbanbattestationbe
ngagement?
A) Evidencebsecuredbsolelybfrombwithinbthebentity.
B) Evidencebobtainedbfrombindependentbsources.
C) Evidencebobtainedbindirectly.
D) Evidencebobtainedbfrombmultiplebinternalbinquiries.b
Answer:b B
Difficulty:b3bHard
Topic:b Auditing,bAttestation,bandbAssurancebServices
LearningbObjective:b 01-
02bDefinebandbcontrastbfinancialbstatementbauditing,battestation,bandbassurancebservices.
Blooms:b Remember
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, AACSB:b AnalyticalbThinkingbAcces
sibility:b KeyboardbNavigation




3
Copyright © 2018 McGraw-Hill