TEST BANK For Auditing & Assurance Services: A Systematic Approach, 11th Edition By William Messier Jr, Steven Glover, Verified Chapters 1 - 21, Complete Newest Version

Auditing & Assurance Services
7 7 7




TEST BANK

Auditing & Assurance Services: A Systematic
Approach, 11th Edition Chapters 1 - 21

,Auditing & Assurance Services
7 7 7




Chapter71:7An7Introduction7to7Assurance7and7Financial7Statement7Auditing

Chapter72:7The7Financial7Statement7Auditing7Environment

Chapter73:7Audit7Planning,7Types7of7Audit7Tests,7and7Materiality

Chapter74:7Risk7Assessment

Chapter75:7Evidence7and7Documentation

Chapter76:7Internal7Control7in7a7Financial7Statement7Audit

Chapter77:7Auditing7Internal7Control7over7Financial7Reporting

Chapter78:7Audit7Sampling:7An7Overview7and7Application7to7Tests7of7Controls

Chapter79:7Audit7Sampling:7An7Application7to7Substantive7Tests7of7Account7Balances

Chapter710:7Auditing7the7Revenue7Process

Chapter711:7Auditing7the7Purchasing7Process

Chapter712:7Auditing7the7Human7Resource7Management7Process

Chapter713:7Auditing7the7Inventory7Management7Process

Chapter714:7Auditing7the7Financing/Investing7Process:7Prepaid7Expenses,7Intangible7Assets,7a
nd7Property,7Plant,7and7Equipment

Chapter715:7Auditing7the7Financing/Investing7Process:7Long-
Term7Liabilities,7Stockholders’7Equity,7and7Income7Statement7Accounts

Chapter716:7Auditing7the7Financing/Investing7Process:7Cash7and7Investments

Chapter717:7Completing7the7Audit7Engagement

Chapter718:7Reports7on7Audited7Financial7Statements

Chapter719:7Professional7Conduct,7Independence,7and7Quality7Management

Chapter720:7Legal7Liability

Chapter721:7Assurance,7Attestation,7and7Internal7Auditing7Services

,Auditing & Assurance Services
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Chapter 01 7 7




An Introduction to Assurance and Financial Statement Auditing
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True7 /7 False7 Questions


1. Independence7 standards 7 are7 required7 for7 audits7 of7 public7 companies,7 but7 not7for7 audits7o
f7private7companies.

True False

2. Decision7 makers7 demand7 reliable7 information7 that7 is7 provided7 by7 accountants.

True False

3. Information7 asymmetry 7 seldom7 occurs.

True False

4. Conflicts7 of7 interest7 often7 occur7 between7 absentee7 owners7 and7 managers.

True False

5. Auditing7 services7 and7 attestation7 services7 are7 the7 same.

True False

6. Auditing7is7a7type7of7attest7service.

True False

7. Testing7all7transactions 7that7occurred7during7the7period7is7cost7prohibitive.

True False




Multiple7Choice7 Questions

, Auditing & Assurance Services
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8. Why7do7auditors7generally7use7a7sampling7approach 7to7evidence7gathering?


A. Auditors7 are7experts 7 and7do7not7need7to7look7at7much7to7know7whether7the7financial7s
tatements7are7correct7or7not.
B. Auditors7 must7balance7the7cost7of7the7audit7with7the7need7for7p
recision.
C. Auditors7must7limit7their7exposure7to7their7auditee7to7maintain7i
ndependence.
D. The7auditor's 7relationship7with7the7auditee7is7generally 7adversarial,7so7the7auditor7will7n
ot7have7access7to7all7of7the7financial7information7of7the7company.

9. Which7 of7 the7 following7 statements 7 best7 describes7 a7 relationship7 between7 sample7 size7 and7o
ther7elements7of7auditing?


A. If7 materiality7 increases, 7 so7 will7 the7
sample7size.
B. If7 the7 desired7 level7 of7 assurance7 increases,7 sample7 sizes7 can7 be7s
maller.
C. If7materiality 7decreases,7sample7size7will7need7to7i
ncrease.
D. There7 is7no7relationship7 between7sample7size7 and7 materiality 7or7the7 desired7level7o
f7assurance.

10. Which7 of7the7 following7statements 7 about7 the7 study7 of7 auditing7 is7NOT7true?


A. The7 study7 of7 auditing7 can7 be7 valuable7 to7 future7 accountants 7 and7 business7 decision7
makers7whether7or7not7they7plan7to7become7auditors.
B. The7 study7 of7 auditing7 focuses7 on7 learning7 the7 analytical7 and7 logical7 skills 7 necessary7 to7e
valuate7the7relevance7and7reliability 7of7information.
C. The7 study7 of7 auditing7 focuses7 on7 learning7 the7 rules,7 techniques,7 and7 computations7r
equired7to7analyze7financial7statements.
D. The7 study7 of7 auditing7 begins7 with7 the7 understanding 7 of7 a7coherent7 logical7 framework 7a
nd7techniques7useful7for7gathering7and7analyzing7evidence7about7others'7assertions.

11. The7basic7purpose7of7a7financial7statement7audit7is7to


A. Detect7
fraud.
B. Examine7 individual7 transactions 7 so7 that7 the7 auditor7 may7 certify7 as7 to7t
heir7validity.
C. Provide7 assurance7 regarding7 whether7 the7 auditee's 7 financial7 statements7 are7f
airly7stated.
D. Assure7 the7 consistent 7 application7 of7 correct7 accounting7
procedures.