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 of interest often occur between absentee owners and managers.
ANSWER: TRUE
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
5) Auditing sservices sand sattestation sservices sare sthe ssame.
ANSWER: s FALSE
sDifficulty: s1 sEasy
Topic: s Auditing, sAttest, sand sAssurance sServices sDefined
Learning sObjective: s 01-03 sUnderstand sthe srelationships samong sauditing, sattestation, sand
sassurance sservices.
Bloom's: s Understand
sAACSB:
s Communication
AICPA: s BB sIndustry; sFN sReporting
6) Auditing sis sa stype sof sattest sservice.
ANSWER: s TRUE
sDifficulty: s1 sEasy
Topic: s Auditing, sAttest, sand sAssurance sServices sDefined
Learning sObjective: s 01-03 sUnderstand sthe srelationships samong sauditing, sattestation, sand
sassurance sservices.; s01-04 sKnow sthe sbasic sdefinition sof sa sfinancial sstatement saudit.
Bloom's: s Understand
sAACSB:
s Communication
AICPA: s BB sIndustry; sFN sReporting
7) Testing sall stransactions sthat soccurred sduring sthe speriod sis scost sprohibitive.
ANSWER: s TRUE
sDifficulty: s2 sMedium
sTopic: s The sAudit
sProcess
Learning sObjective: s 01-06 sBe sable sto sexplain swhy son smost saudit sengagements san sauditor
stests sonly sa ssample sof stransactions sthat soccurred.
Bloom's: s Apply
AACSB: s 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 of interest often occur between absentee owners and managers.
ANSWER: TRUE
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
5) Auditing sservices sand sattestation sservices sare sthe ssame.
ANSWER: s FALSE
sDifficulty: s1 sEasy
Topic: s Auditing, sAttest, sand sAssurance sServices sDefined
Learning sObjective: s 01-03 sUnderstand sthe srelationships samong sauditing, sattestation, sand
sassurance sservices.
Bloom's: s Understand
sAACSB:
s Communication
AICPA: s BB sIndustry; sFN sReporting
6) Auditing sis sa stype sof sattest sservice.
ANSWER: s TRUE
sDifficulty: s1 sEasy
Topic: s Auditing, sAttest, sand sAssurance sServices sDefined
Learning sObjective: s 01-03 sUnderstand sthe srelationships samong sauditing, sattestation, sand
sassurance sservices.; s01-04 sKnow sthe sbasic sdefinition sof sa sfinancial sstatement saudit.
Bloom's: s Understand
sAACSB:
s Communication
AICPA: s BB sIndustry; sFN sReporting
7) Testing sall stransactions sthat soccurred sduring sthe speriod sis scost sprohibitive.
ANSWER: s TRUE
sDifficulty: s2 sMedium
sTopic: s The sAudit
sProcess
Learning sObjective: s 01-06 sBe sable sto sexplain swhy son smost saudit sengagements san sauditor
stests sonly sa ssample sof stransactions sthat soccurred.
Bloom's: s Apply
AACSB: s Communication
