TEST BANK For Auditing & Assurance Services:
A Systematic Approach, 12th Edition
Chapters 1 - 21 Complete
,Chapter 1: An Introduction to Assurance and Financial Statement Auditing
Chapter 2: The Financial Statement Auditing Environment
Chapter 3: Audit Planning, Types of Audit Tests, and Materiality
Chapter 4: Risk Assessment
Chapter 5: Evidence and Documentation
Chapter 6: Internal Control in a Financial Statement Audit
Chapter 7: Auditing Internal Control over Financial Reporting
Chapter 8: Audit Sampling: An Overview and Application to Tests of Controls
Chapter 9: Audit Sampling: An Application to Substantive Tests of Account Balances
Chapter 10: Auditing the Revenue Process
Chapter 11: Auditing the Purchasing Process
Chapter 12: Auditing the Human Resource Management Process
Chapter 13: Auditing the Inventory Management Process
Chapter 14: Auditing the Financing/Investing Process: Prepaid Expenses, Intangible Assets,
and Property, Plant, and Equipment
Chapter 15: Auditing the Financing/Investing Process: Long-Term Liabilities, Stockholders’
Equity, and Income Statement Accounts
Chapter 16: Auditing the Financing/Investing Process: Cash and Investments
Chapter 17: Completing the Audit Engagement
Chapter 18: Reports on Audited Financial Statements
Chapter 19: Professional Conduct, Independence, and Quality Management
Chapter 20: Legal Liability
Chapter 21: Assurance, Attestation, and Internal Auditing Services
,Auditing & Assurance Services: A Systematic Approach, 12e (Messier)
Chapter 1 An Introduction to Assurance and Financial Statement Auditing
1) Auditing focuses on rules, techniques, and computations required to prepare and analyze
financial information.
ANSWER: FALSE
Difficulty: 1 Easy
Topic: The Importance for Studying Auditing
Learning Objective: 01-01 Understand why studying auditing can be valuable to you whether or
not you plan to become an auditor, and why it is different from studying accounting.
Bloom's: Remember
AACSB: Communication
AICPA: BB Legal; FN Decision Making
2) Decision makers demand reliable information that is provided by accountants.
ANSWER: TRUE
Difficulty: 1 Easy
Topic: The Demand for Auditing and Assurance
Learning Objective: 01-02 Understand the demand for auditing and be able to explain the
desired characteristics of auditors and audit services through an analogy to a house inspector and
a house inspection service.
Bloom's: Understand
AACSB: Communication
AICPA: FN Decision Making; BB Industry
3) Information asymmetry seldom occurs.
ANSWER: FALSE
Difficulty: 2 Medium
Topic: The Demand for Auditing and Assurance
Learning Objective: 01-02 Understand the demand for auditing and be able to explain the
desired characteristics of auditors and audit services through an analogy to a house inspector and
a house inspection service.
Bloom's: Apply
AACSB: Communication
AICPA: BB Industry; FN Reporting
, 4) Conflicts nof ninterest noften noccur nbetween nabsentee nowners nand nmanagers.
ANSWER: n TRUE
nDifficulty: n2 nMedium
Topic: n The nDemand nfor nAuditing nand nAssurance
Learning nObjective: n 01-02 nUnderstand nthe ndemand nfor nauditing nand nbe nable nto nexplain
nthe ndesired ncharacteristics nof nauditors nand naudit nservices nthrough nan nanalogy nto na nhouse
ninspector nand na nhouse ninspection nservice.
Bloom's: n Apply
AACSB: n Communication
AICPA: n BB nIndustry; nFN nReporting
5) Auditing nservices nand nattestation nservices nare nthe nsame.
ANSWER: n FALSE
nDifficulty: n1 nEasy
Topic: n Auditing, nAttest, nand nAssurance nServices nDefined
Learning nObjective: n 01-03 nUnderstand nthe nrelationships namong nauditing, nattestation, nand
nassurance nservices.
Bloom's: n Understand
nAACSB:
n Communication
AICPA: n BB nIndustry; nFN nReporting
6) Auditing nis na ntype nof nattest nservice.
ANSWER: n TRUE
nDifficulty: n1 nEasy
Topic: n Auditing, nAttest, nand nAssurance nServices nDefined
Learning nObjective: n 01-03 nUnderstand nthe nrelationships namong nauditing, nattestation, nand
nassurance nservices.; n01-04 nKnow nthe nbasic ndefinition nof na nfinancial nstatement naudit.
Bloom's: n Understand
nAACSB:
n Communication
AICPA: n BB nIndustry; nFN nReporting
7) Testing nall ntransactions nthat noccurred nduring nthe nperiod nis ncost nprohibitive.
ANSWER: n TRUE
nDifficulty: n2 nMedium
nTopic: n The nAudit
nProcess
Learning nObjective: n 01-06 nBe nable nto nexplain nwhy non nmost naudit nengagements nan nauditor
ntests nonly na nsample nof ntransactions nthat noccurred.
Bloom's: n Apply
AACSB: n Communication
A Systematic Approach, 12th Edition
Chapters 1 - 21 Complete
,Chapter 1: An Introduction to Assurance and Financial Statement Auditing
Chapter 2: The Financial Statement Auditing Environment
Chapter 3: Audit Planning, Types of Audit Tests, and Materiality
Chapter 4: Risk Assessment
Chapter 5: Evidence and Documentation
Chapter 6: Internal Control in a Financial Statement Audit
Chapter 7: Auditing Internal Control over Financial Reporting
Chapter 8: Audit Sampling: An Overview and Application to Tests of Controls
Chapter 9: Audit Sampling: An Application to Substantive Tests of Account Balances
Chapter 10: Auditing the Revenue Process
Chapter 11: Auditing the Purchasing Process
Chapter 12: Auditing the Human Resource Management Process
Chapter 13: Auditing the Inventory Management Process
Chapter 14: Auditing the Financing/Investing Process: Prepaid Expenses, Intangible Assets,
and Property, Plant, and Equipment
Chapter 15: Auditing the Financing/Investing Process: Long-Term Liabilities, Stockholders’
Equity, and Income Statement Accounts
Chapter 16: Auditing the Financing/Investing Process: Cash and Investments
Chapter 17: Completing the Audit Engagement
Chapter 18: Reports on Audited Financial Statements
Chapter 19: Professional Conduct, Independence, and Quality Management
Chapter 20: Legal Liability
Chapter 21: Assurance, Attestation, and Internal Auditing Services
,Auditing & Assurance Services: A Systematic Approach, 12e (Messier)
Chapter 1 An Introduction to Assurance and Financial Statement Auditing
1) Auditing focuses on rules, techniques, and computations required to prepare and analyze
financial information.
ANSWER: FALSE
Difficulty: 1 Easy
Topic: The Importance for Studying Auditing
Learning Objective: 01-01 Understand why studying auditing can be valuable to you whether or
not you plan to become an auditor, and why it is different from studying accounting.
Bloom's: Remember
AACSB: Communication
AICPA: BB Legal; FN Decision Making
2) Decision makers demand reliable information that is provided by accountants.
ANSWER: TRUE
Difficulty: 1 Easy
Topic: The Demand for Auditing and Assurance
Learning Objective: 01-02 Understand the demand for auditing and be able to explain the
desired characteristics of auditors and audit services through an analogy to a house inspector and
a house inspection service.
Bloom's: Understand
AACSB: Communication
AICPA: FN Decision Making; BB Industry
3) Information asymmetry seldom occurs.
ANSWER: FALSE
Difficulty: 2 Medium
Topic: The Demand for Auditing and Assurance
Learning Objective: 01-02 Understand the demand for auditing and be able to explain the
desired characteristics of auditors and audit services through an analogy to a house inspector and
a house inspection service.
Bloom's: Apply
AACSB: Communication
AICPA: BB Industry; FN Reporting
, 4) Conflicts nof ninterest noften noccur nbetween nabsentee nowners nand nmanagers.
ANSWER: n TRUE
nDifficulty: n2 nMedium
Topic: n The nDemand nfor nAuditing nand nAssurance
Learning nObjective: n 01-02 nUnderstand nthe ndemand nfor nauditing nand nbe nable nto nexplain
nthe ndesired ncharacteristics nof nauditors nand naudit nservices nthrough nan nanalogy nto na nhouse
ninspector nand na nhouse ninspection nservice.
Bloom's: n Apply
AACSB: n Communication
AICPA: n BB nIndustry; nFN nReporting
5) Auditing nservices nand nattestation nservices nare nthe nsame.
ANSWER: n FALSE
nDifficulty: n1 nEasy
Topic: n Auditing, nAttest, nand nAssurance nServices nDefined
Learning nObjective: n 01-03 nUnderstand nthe nrelationships namong nauditing, nattestation, nand
nassurance nservices.
Bloom's: n Understand
nAACSB:
n Communication
AICPA: n BB nIndustry; nFN nReporting
6) Auditing nis na ntype nof nattest nservice.
ANSWER: n TRUE
nDifficulty: n1 nEasy
Topic: n Auditing, nAttest, nand nAssurance nServices nDefined
Learning nObjective: n 01-03 nUnderstand nthe nrelationships namong nauditing, nattestation, nand
nassurance nservices.; n01-04 nKnow nthe nbasic ndefinition nof na nfinancial nstatement naudit.
Bloom's: n Understand
nAACSB:
n Communication
AICPA: n BB nIndustry; nFN nReporting
7) Testing nall ntransactions nthat noccurred nduring nthe nperiod nis ncost nprohibitive.
ANSWER: n TRUE
nDifficulty: n2 nMedium
nTopic: n The nAudit
nProcess
Learning nObjective: n 01-06 nBe nable nto nexplain nwhy non nmost naudit nengagements nan nauditor
ntests nonly na nsample nof ntransactions nthat noccurred.
Bloom's: n Apply
AACSB: n Communication
