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
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TEST BANK

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

,Auditing & Assurance Services LM LM LM




Chapter 1: An Introduction to Assurance and Financial Statement Auditing
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Chapter 2: The Financial Statement Auditing Environment
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Chapter 3: Audit Planning, Types of Audit Tests, and Materiality
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Chapter 4: Risk Assessment
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Chapter 5: Evidence and Documentation
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Chapter 6: Internal Control in a Financial Statement Audit
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Chapter 7: Auditing Internal Control over Financial Reporting
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Chapter 8: Audit Sampling: An Overview and Application to Tests of Controls
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Chapter 9: Audit Sampling: An Application to Substantive Tests of Account Balances
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Chapter 10: Auditing the Revenue Process
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Chapter 11: Auditing the Purchasing Process
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Chapter 12: Auditing the Human Resource Management Process
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Chapter 13: Auditing the Inventory Management Process
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Chapter 14: Auditing the Financing/Investing Process: Prepaid Expenses, Intangible Assets, a
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nd Property, Plant, and Equipment
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Chapter 15: Auditing the Financing/Investing Process: Long-
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Term Liabilities, Stockholders’ Equity, and Income Statement Accounts
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Chapter 16: Auditing the Financing/Investing Process: Cash and Investments
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Chapter 17: Completing the Audit Engagement
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Chapter 18: Reports on Audited Financial Statements
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Chapter 19: Professional Conduct, Independence, and Quality Management
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Chapter 20: Legal Liability
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Chapter 21: Assurance, Attestation, and Internal Auditing Services
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Chapter 01 L M M
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An Introduction to Assurance and Financial Statement Auditing
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True / False Questions
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1. Independence standards are required for audits of public companies, but not for auditso
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f private companies.
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True False

2. Decision makers demand reliable information that is provided by accountants.
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True False

3. Information asymmetry seldom occurs. L M L M L M




True False

4. Conflicts of interest often occur between absentee owners and managers.
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True False

5. Auditing services and attestation services are the same.
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True False

6. Auditing is a type of attest service.
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True False

7. Testing all transactions that occurred during the period is cost prohibitive.
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True False




Multiple Choice Questions LM LM

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8. Why do auditors generally use a sampling approach to evidence gathering?
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A. Auditors are experts and do not need to look at much to know whether the financial st
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atements are correct or not. LM LM LM LM




B. Auditors must balance the cost of the audit with the need forp
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recision.
C. Auditors must limit their exposure to their auditee to maintaini
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ndependence.
D. The auditor's relationship with the auditee is generally adversarial, so the auditor willn
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ot have access to all of the financial information of the company.
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9. Which of the following statements best describes a relationship between sample size and
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other elements of auditing?
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A. If materiality increases, so will th
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esample size.
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B. If the desired level of assurance increases, sample sizes can be
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smaller.
C. If materiality decreases, sample size will need toi
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ncrease.
D. There is no relationship between sample size and materiality or the desired levelo
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f assurance.
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10. Which of the following statements about the study of auditing is NOT true?
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A. The study of auditing can be valuable to future accountants and business decision
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makers whether or not they plan to become auditors.
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B. The study of auditing focuses on learning the analytical and logical skills necessary to
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evaluate the relevance and reliability of information. LM LM LM LM LM LM




C. The study of auditing focuses on learning the rules, techniques, and computations r
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equired to analyze financial statements. LM LM LM LM




D. The study of auditing begins with the understanding of a coherent logical framework a
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nd techniques useful for gathering and analyzing evidence about others' assertions.
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11. The basic purpose of a financial statement audit is to
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A. Detect M
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fraud.
B. Examine individual transactions so that the auditor may certify as to t
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heir validity. LM




C. Provide assurance regarding whether the auditee's financial statements are
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fairly stated. LM




D. Assure the consistent application of correct accounting
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procedures.