Auditing & Assurance Services
h h h
TEST BANK
Auditing & Assurance Services: A Systematic
Approach, 11th Edition Chapters 1 - 21
,Auditing & Assurance Services
h h h
Chapterh1:hAnhIntroductionhtohAssurancehandhFinancialhStatementhAuditing
Chapterh2:hThehFinancialhStatementhAuditinghEnvironment
Chapterh3:hAudithPlanning,hTypeshofhAudithTests,handhMateriality
Chapterh4:hRiskhAssessment
Chapterh5:hEvidencehandhDocumentation
Chapterh6:hInternalhControlhinhahFinancialhStatementhAudit
Chapterh7:hAuditinghInternalhControlhoverhFinancialhReporting
Chapterh8:hAudithSampling:hAnhOverviewhandhApplicationhtohTestshofhControls
Chapterh9:hAudithSampling:hAnhApplicationhtohSubstantivehTestshofhAccounthBalances
Chapterh10:hAuditinghthehRevenuehProcess
Chapterh11:hAuditinghthehPurchasinghProcess
Chapterh12:hAuditinghthehHumanhResourcehManagementhProcess
Chapterh13:hAuditinghthehInventoryhManagementhProcess
Chapterh14:hAuditinghthehFinancing/InvestinghProcess:hPrepaidhExpenses,hIntangiblehAssets,h
andhProperty,hPlant,handhEquipment
Chapterh15:hAuditinghthehFinancing/InvestinghProcess:hLong-
TermhLiabilities,hStockholders’hEquity,handhIncomehStatementhAccounts
Chapterh16:hAuditinghthehFinancing/InvestinghProcess:hCashhandhInvestments
Chapterh17:hCompletinghthehAudithEngagement
Chapterh18:hReportshonhAuditedhFinancialhStatements
Chapterh19:hProfessionalhConduct,hIndependence,handhQualityhManagement
Chapterh20:hLegalhLiability
Chapterh21:hAssurance,hAttestation,handhInternalhAuditinghServices
,Auditing & Assurance Services
h h h
Chapterh 01h
Anh Introductionh toh Assuranceh andh Financialh Statementh Auditing
Trueh /h Falseh Questions
1. Independenceh standards h areh requiredhforh auditsh ofh publich companies,h buth noth forh audit
shofhprivatehcompanies.
True False
2. Decisionh makersh demandh reliableh informationh thath ish providedh byh accountants.
True False
3. Informationh asymmetryh seldomh occurs.
True False
4. Conflictsh ofh interesth oftenh occurh betweenh absenteeh ownersh andh managers.
True False
5. Auditingh servicesh andh attestationh servicesh areh theh same.
True False
6. Auditinghishahtypehofhattesthservice.
True False
7. Testinghallhtransactionshthathoccurredhduringhthehperiodhishcosthprohibitive.
True False
Multipleh Choiceh Questions
, Auditing & Assurance Services
h h h
8. Whyhdohauditorshgenerallyhusehahsamplinghapproachhtohevidencehgathering?
A. Auditorsh arehexpertsh andhdohnothneedhtohlookhathmuchhtohknowhwhetherhthehfinancia
lhstatementsharehcorrecthorhnot.
B. Auditorsh musthbalancehthehcosthofhthehaudithwithhthehneedhfo
rhprecision.
C. Auditorshmusthlimiththeirhexposurehtohtheirhauditeehtohmaintai
nhindependence.
D. Thehauditor'shrelationshiphwithhthehauditeehishgenerallyhadversarial,hsohthehauditorhwil
lhnothhavehaccesshtohallhofhthehfinancialhinformationhofhthehcompany.
9. Whichh ofh theh followingh statementsh besth describesh ah relationshiph betweenh sampleh sizeh an
dhotherhelementshofhauditing?
A. Ifh materialityh increases,h soh willh th
ehsampleh size.
B. Ifh theh desiredh levelh ofh assuranceh increases,h sampleh sizesh canh b
ehsmaller.
C. Ifhmaterialityhdecreases,hsamplehsizehwillhneedht
ohincrease.
D. Therehishnohrelationshiph betweenhsamplehsizeh andh materialityhorhtheh desiredhleve
lhofhassurance.
10. Whichh ofhtheh followinghstatementsh abouth theh studyh ofh auditingh ishNOThtrue?
A. Theh studyh ofh auditingh canh beh valuableh toh futureh accountantsh andh businessh decisio
nhmakershwhetherhorhnoththeyhplanhtohbecomehauditors.
B. Theh studyh ofh auditingh focusesh onh learningh theh analyticalh andh logicalh skills h necessaryh t
ohevaluatehthehrelevancehandhreliabilityhofhinformation.
C. Theh studyh ofh auditingh focusesh onh learningh theh rules,h techniques,h andh computation
shrequiredhtohanalyzehfinancialhstatements.
D. Theh studyh ofh auditingh beginsh withhtheh understandingh ofh ahcoherenth logicalh framework
handhtechniqueshusefulhforhgatheringhandhanalyzing hevidence habout hothers' hassertion
s.
11. Thehbasichpurposehofh ahfinancialhstatementhaudithishto
A. Detecth
fraud.
B. Examineh individualh transactions h soh thath theh auditorh mayh certifyh ash t
ohtheirhvalidity.
C. Provideh assuranceh regardingh whetherh theh auditee'sh financialh statementsh are
fairlyhstated.
h
D. Assureh theh consistenth applicationh ofh correcth accounting
procedures.
h
h h h
TEST BANK
Auditing & Assurance Services: A Systematic
Approach, 11th Edition Chapters 1 - 21
,Auditing & Assurance Services
h h h
Chapterh1:hAnhIntroductionhtohAssurancehandhFinancialhStatementhAuditing
Chapterh2:hThehFinancialhStatementhAuditinghEnvironment
Chapterh3:hAudithPlanning,hTypeshofhAudithTests,handhMateriality
Chapterh4:hRiskhAssessment
Chapterh5:hEvidencehandhDocumentation
Chapterh6:hInternalhControlhinhahFinancialhStatementhAudit
Chapterh7:hAuditinghInternalhControlhoverhFinancialhReporting
Chapterh8:hAudithSampling:hAnhOverviewhandhApplicationhtohTestshofhControls
Chapterh9:hAudithSampling:hAnhApplicationhtohSubstantivehTestshofhAccounthBalances
Chapterh10:hAuditinghthehRevenuehProcess
Chapterh11:hAuditinghthehPurchasinghProcess
Chapterh12:hAuditinghthehHumanhResourcehManagementhProcess
Chapterh13:hAuditinghthehInventoryhManagementhProcess
Chapterh14:hAuditinghthehFinancing/InvestinghProcess:hPrepaidhExpenses,hIntangiblehAssets,h
andhProperty,hPlant,handhEquipment
Chapterh15:hAuditinghthehFinancing/InvestinghProcess:hLong-
TermhLiabilities,hStockholders’hEquity,handhIncomehStatementhAccounts
Chapterh16:hAuditinghthehFinancing/InvestinghProcess:hCashhandhInvestments
Chapterh17:hCompletinghthehAudithEngagement
Chapterh18:hReportshonhAuditedhFinancialhStatements
Chapterh19:hProfessionalhConduct,hIndependence,handhQualityhManagement
Chapterh20:hLegalhLiability
Chapterh21:hAssurance,hAttestation,handhInternalhAuditinghServices
,Auditing & Assurance Services
h h h
Chapterh 01h
Anh Introductionh toh Assuranceh andh Financialh Statementh Auditing
Trueh /h Falseh Questions
1. Independenceh standards h areh requiredhforh auditsh ofh publich companies,h buth noth forh audit
shofhprivatehcompanies.
True False
2. Decisionh makersh demandh reliableh informationh thath ish providedh byh accountants.
True False
3. Informationh asymmetryh seldomh occurs.
True False
4. Conflictsh ofh interesth oftenh occurh betweenh absenteeh ownersh andh managers.
True False
5. Auditingh servicesh andh attestationh servicesh areh theh same.
True False
6. Auditinghishahtypehofhattesthservice.
True False
7. Testinghallhtransactionshthathoccurredhduringhthehperiodhishcosthprohibitive.
True False
Multipleh Choiceh Questions
, Auditing & Assurance Services
h h h
8. Whyhdohauditorshgenerallyhusehahsamplinghapproachhtohevidencehgathering?
A. Auditorsh arehexpertsh andhdohnothneedhtohlookhathmuchhtohknowhwhetherhthehfinancia
lhstatementsharehcorrecthorhnot.
B. Auditorsh musthbalancehthehcosthofhthehaudithwithhthehneedhfo
rhprecision.
C. Auditorshmusthlimiththeirhexposurehtohtheirhauditeehtohmaintai
nhindependence.
D. Thehauditor'shrelationshiphwithhthehauditeehishgenerallyhadversarial,hsohthehauditorhwil
lhnothhavehaccesshtohallhofhthehfinancialhinformationhofhthehcompany.
9. Whichh ofh theh followingh statementsh besth describesh ah relationshiph betweenh sampleh sizeh an
dhotherhelementshofhauditing?
A. Ifh materialityh increases,h soh willh th
ehsampleh size.
B. Ifh theh desiredh levelh ofh assuranceh increases,h sampleh sizesh canh b
ehsmaller.
C. Ifhmaterialityhdecreases,hsamplehsizehwillhneedht
ohincrease.
D. Therehishnohrelationshiph betweenhsamplehsizeh andh materialityhorhtheh desiredhleve
lhofhassurance.
10. Whichh ofhtheh followinghstatementsh abouth theh studyh ofh auditingh ishNOThtrue?
A. Theh studyh ofh auditingh canh beh valuableh toh futureh accountantsh andh businessh decisio
nhmakershwhetherhorhnoththeyhplanhtohbecomehauditors.
B. Theh studyh ofh auditingh focusesh onh learningh theh analyticalh andh logicalh skills h necessaryh t
ohevaluatehthehrelevancehandhreliabilityhofhinformation.
C. Theh studyh ofh auditingh focusesh onh learningh theh rules,h techniques,h andh computation
shrequiredhtohanalyzehfinancialhstatements.
D. Theh studyh ofh auditingh beginsh withhtheh understandingh ofh ahcoherenth logicalh framework
handhtechniqueshusefulhforhgatheringhandhanalyzing hevidence habout hothers' hassertion
s.
11. Thehbasichpurposehofh ahfinancialhstatementhaudithishto
A. Detecth
fraud.
B. Examineh individualh transactions h soh thath theh auditorh mayh certifyh ash t
ohtheirhvalidity.
C. Provideh assuranceh regardingh whetherh theh auditee'sh financialh statementsh are
fairlyhstated.
h
D. Assureh theh consistenth applicationh ofh correcth accounting
procedures.
h
