, 1
Copyright CF© CF2018 CFMcGraw-
Hill
,Auditing CF& CFAssurance CFServices, CF7e CF(Louwers)
Chapter CF1
C
F C F Auditing CFand CFAssurance
Services
CF
1) The CFaudit CFobjective CFthat CFall CFtransactions CFand CFaccounts CFthat CFshould CFbe CFpresented CFin
CFthe CFfinancialCsF tatements CFare CFin CFfact CFincluded CFis CFrelated CFto CFwhich CFof CFthe CFPCAOB
CFassertions?
A) Existence.
B) Rights CFand CFobligations.
C) Completeness.
D) Valuation.
CFAnswer: CFC
CFDifficulty: CF1
CFEasy
Topic: C F Management's CFFinancial CFStatement CFAssertions
Learning CFObjective: CF01-03 CFDescribe CFand CFdefine CFthe CFassertions CFthat CFmanagement CFmakes
CFabout CFtheC
rF ecognition, CFmeasurement, CFpresentation, CFand CFdisclosure CFof CFthe CFfinancial
CFstatements CFand CFexplain CFwhy CFauditors CFuse CFthem CFas CFthe CFfocal CFpoint CFof CFthe CFaudit.
Blooms: C F Remember
AACSB: CFAnalytical CFThinking
CFAccessibility: C F Keyboard
CFNavigation
2) Cutoff CFtests CFdesigned CFto CFdetect CFpurchases CFmade CFbefore CFthe CFend CFof CFthe CFyear
CFthat CFhave CFbeenCrF ecorded CFin CFthe CFsubsequent CFyear CFprovide CFassurance CFabout
CFmanagement's CFassertion CFof:
A) presentation CFand CFdisclosure.
B) completeness.
C) rights CFand CFobligations.
D) existence.
CFAnswer: C F B
CFDifficulty: CF2
CFMedium
Topic: C F Management's CFFinancial CFStatement CFAssertions
Learning CFObjective: CF01-03 CFDescribe CFand CFdefine CFthe CFassertions CFthat CFmanagement CFmakes
CFabout CFtheCrF ecognition, CFmeasurement, CFpresentation, CFand CFdisclosure CFof CFthe CFfinancial
CFstatements CFand CFexplain CFwhy CFauditors CFuse CFthem CFas CFthe CFfocal CFpoint CFof CFthe CFaudit.
Blooms: C F Remember
AACSB: CFAnalytical CFThinking
CFAccessibility: C F Keyboard
CFNavigation
2
Copyright CF© CF2018 CFMcGraw-
Hill
, 3) During CFan CFaudit CFof CFan CFentity's CFstockholders' CFequity CFaccounts, CFthe CFauditor
CFdetermines CFwhetherC tF here CFare CFrestrictions CFon CFretained CFearnings CFresulting CFfrom CFloans,
CFagreements, CFor CFstate CFlaw. CFThis CFaudit CFprocedure CFmost CFlikely CFis CFintended CFto CFverify
CFmanagement's CFassertion CFof:
A) existence CFor CFoccurrence.
B) completeness.
C) valuation CFor CFallocation.
D) presentation CFand
CFdisclosure.C A
F nswer: CFD
Difficulty: CF2 CFMedium
Topic: C F Management's CFFinancial CFStatement CFAssertions
Learning CFObjective: CF01-03 CFDescribe CFand CFdefine CFthe CFassertions CFthat CFmanagement CFmakes
CFabout CFtheC
rF ecognition, CFmeasurement, CFpresentation, CFand CFdisclosure CFof CFthe CFfinancial
CFstatements CFand CFexplain CFwhy CFauditors CFuse CFthem CFas CFthe CFfocal CFpoint CFof CFthe CFaudit.
Blooms: C F Remember
AACSB: CFAnalytical CFThinking
CFAccessibility: C F Keyboard
CFNavigation
4) The CFconfirmation CFof CFan CFaccount CFpayable CFbalance CFselected CFfrom CFthe CFgeneral
CFledger CFprovidesC pF rimary CFevidence CFregarding CFwhich CFmanagement CFassertion?
A) Completeness.
B) Valuation.
C) Allocation.
D) Existence.
CFAnswer: C F D
CFDifficulty: CF2
CFMedium
Topic: C F Management's CFFinancial CFStatement CFAssertions
Learning CFObjective: CF01-03 CFDescribe CFand CFdefine CFthe CFassertions CFthat CFmanagement CFmakes
CFabout CFtheC
rF ecognition, CFmeasurement, CFpresentation, CFand CFdisclosure CFof CFthe CFfinancial
CFstatements CFand CFexplain CFwhy CFauditors CFuse CFthem CFas CFthe CFfocal CFpoint CFof CFthe CFaudit.
Blooms: C F Remember
AACSB: CFAnalytical CFThinking
CFAccessibility: C F Keyboard
CFNavigation
5) What CFtype CFof CFevidence CFwould CFprovide CFthe CFhighest CFlevel CFof CFassurance CFin CFan
CFattestationCeF ngagement?
A) Evidence CFsecured CFsolely CFfrom CFwithin CFthe CFentity.
B) Evidence CFobtained CFfrom CFindependent CFsources.
C) Evidence CFobtained CFindirectly.
D) Evidence CFobtained CFfrom CFmultiple CFinternal
CFinquiries.C
A
F nswer: CFB
Difficulty: CF3 CFHard
Topic: C F Auditing, CFAttestation, CFand CFAssurance CFServices
Learning CFObjective: CF01-02 CFDefine CFand CFcontrast CFfinancial CFstatement CFauditing, CFattestation,
3
Copyright CF© CF2018 CFMcGraw-
Hill
Copyright CF© CF2018 CFMcGraw-
Hill
,Auditing CF& CFAssurance CFServices, CF7e CF(Louwers)
Chapter CF1
C
F C F Auditing CFand CFAssurance
Services
CF
1) The CFaudit CFobjective CFthat CFall CFtransactions CFand CFaccounts CFthat CFshould CFbe CFpresented CFin
CFthe CFfinancialCsF tatements CFare CFin CFfact CFincluded CFis CFrelated CFto CFwhich CFof CFthe CFPCAOB
CFassertions?
A) Existence.
B) Rights CFand CFobligations.
C) Completeness.
D) Valuation.
CFAnswer: CFC
CFDifficulty: CF1
CFEasy
Topic: C F Management's CFFinancial CFStatement CFAssertions
Learning CFObjective: CF01-03 CFDescribe CFand CFdefine CFthe CFassertions CFthat CFmanagement CFmakes
CFabout CFtheC
rF ecognition, CFmeasurement, CFpresentation, CFand CFdisclosure CFof CFthe CFfinancial
CFstatements CFand CFexplain CFwhy CFauditors CFuse CFthem CFas CFthe CFfocal CFpoint CFof CFthe CFaudit.
Blooms: C F Remember
AACSB: CFAnalytical CFThinking
CFAccessibility: C F Keyboard
CFNavigation
2) Cutoff CFtests CFdesigned CFto CFdetect CFpurchases CFmade CFbefore CFthe CFend CFof CFthe CFyear
CFthat CFhave CFbeenCrF ecorded CFin CFthe CFsubsequent CFyear CFprovide CFassurance CFabout
CFmanagement's CFassertion CFof:
A) presentation CFand CFdisclosure.
B) completeness.
C) rights CFand CFobligations.
D) existence.
CFAnswer: C F B
CFDifficulty: CF2
CFMedium
Topic: C F Management's CFFinancial CFStatement CFAssertions
Learning CFObjective: CF01-03 CFDescribe CFand CFdefine CFthe CFassertions CFthat CFmanagement CFmakes
CFabout CFtheCrF ecognition, CFmeasurement, CFpresentation, CFand CFdisclosure CFof CFthe CFfinancial
CFstatements CFand CFexplain CFwhy CFauditors CFuse CFthem CFas CFthe CFfocal CFpoint CFof CFthe CFaudit.
Blooms: C F Remember
AACSB: CFAnalytical CFThinking
CFAccessibility: C F Keyboard
CFNavigation
2
Copyright CF© CF2018 CFMcGraw-
Hill
, 3) During CFan CFaudit CFof CFan CFentity's CFstockholders' CFequity CFaccounts, CFthe CFauditor
CFdetermines CFwhetherC tF here CFare CFrestrictions CFon CFretained CFearnings CFresulting CFfrom CFloans,
CFagreements, CFor CFstate CFlaw. CFThis CFaudit CFprocedure CFmost CFlikely CFis CFintended CFto CFverify
CFmanagement's CFassertion CFof:
A) existence CFor CFoccurrence.
B) completeness.
C) valuation CFor CFallocation.
D) presentation CFand
CFdisclosure.C A
F nswer: CFD
Difficulty: CF2 CFMedium
Topic: C F Management's CFFinancial CFStatement CFAssertions
Learning CFObjective: CF01-03 CFDescribe CFand CFdefine CFthe CFassertions CFthat CFmanagement CFmakes
CFabout CFtheC
rF ecognition, CFmeasurement, CFpresentation, CFand CFdisclosure CFof CFthe CFfinancial
CFstatements CFand CFexplain CFwhy CFauditors CFuse CFthem CFas CFthe CFfocal CFpoint CFof CFthe CFaudit.
Blooms: C F Remember
AACSB: CFAnalytical CFThinking
CFAccessibility: C F Keyboard
CFNavigation
4) The CFconfirmation CFof CFan CFaccount CFpayable CFbalance CFselected CFfrom CFthe CFgeneral
CFledger CFprovidesC pF rimary CFevidence CFregarding CFwhich CFmanagement CFassertion?
A) Completeness.
B) Valuation.
C) Allocation.
D) Existence.
CFAnswer: C F D
CFDifficulty: CF2
CFMedium
Topic: C F Management's CFFinancial CFStatement CFAssertions
Learning CFObjective: CF01-03 CFDescribe CFand CFdefine CFthe CFassertions CFthat CFmanagement CFmakes
CFabout CFtheC
rF ecognition, CFmeasurement, CFpresentation, CFand CFdisclosure CFof CFthe CFfinancial
CFstatements CFand CFexplain CFwhy CFauditors CFuse CFthem CFas CFthe CFfocal CFpoint CFof CFthe CFaudit.
Blooms: C F Remember
AACSB: CFAnalytical CFThinking
CFAccessibility: C F Keyboard
CFNavigation
5) What CFtype CFof CFevidence CFwould CFprovide CFthe CFhighest CFlevel CFof CFassurance CFin CFan
CFattestationCeF ngagement?
A) Evidence CFsecured CFsolely CFfrom CFwithin CFthe CFentity.
B) Evidence CFobtained CFfrom CFindependent CFsources.
C) Evidence CFobtained CFindirectly.
D) Evidence CFobtained CFfrom CFmultiple CFinternal
CFinquiries.C
A
F nswer: CFB
Difficulty: CF3 CFHard
Topic: C F Auditing, CFAttestation, CFand CFAssurance CFServices
Learning CFObjective: CF01-02 CFDefine CFand CFcontrast CFfinancial CFstatement CFauditing, CFattestation,
3
Copyright CF© CF2018 CFMcGraw-
Hill
