Test Bank for Auditing & Assurance Services 9th Edition by Timothy Louwers, Jerry Strawser A+

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Copyright © 2018 McGraw-Hill
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,Auditing & Assurance Services, 9e (Louwers) C
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hapter 1 Auditing and Assurance Services
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1) The audit objective that all transactions and accounts that should be presented in the financial
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statements are in fact included is related to which of the PCAOB assertions?
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A) Existence.
B) Rights and obligations. N N


C) Completeness.
D) Valuation. An N


swer: C Difficult
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y: 1 Easy
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Topic: Management's Financial Statement Assertions
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Learning Objective: 01- N N


03 Describe and define the assertions that management makes about the recognition, measureme
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nt, presentation, and disclosure of the financial statements and explain why auditors use them as
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the focal point of the audit.
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Blooms: Remember N


AACSB: Analytical Thinking Acce
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ssibility: Keyboard Navigation
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2) Cutoff tests designed to detect purchases made before the end of the year that have been
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recorded in the subsequent year provide assurance about management's assertion of:
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A) presentation and disclosure. N N


B) completeness.
C) rights and obligations. N N


D) existence. Answer N


: B Difficulty: 2 Med
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ium
Topic: Management's Financial Statement Assertions
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Learning Objective: 01- N N


03 Describe and define the assertions that management makes about the recognition, measureme
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nt, presentation, and disclosure of the financial statements and explain why auditors use them as
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the focal point of the audit.
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Blooms: Remember N


AACSB: Analytical Thinking Acce
N N N


ssibility: Keyboard Navigation
N N




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Copyright © 2018 McGraw-Hill
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,3) During an audit of an entity's stockholders' equity accounts, the auditor determines whether
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there are restrictions on retained earnings resulting from loans, agreements, or state law. This
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audit procedure most likely is intended to verify management's assertion of:
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A) existence or occurrence. N N


B) completeness.
C) valuation or allocation. N N


D) presentation and disclosure. N N


NAnswer: D N


Difficulty: 2 Medium N N


Topic: Management's Financial Statement Assertions
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Learning Objective: 01- N N


03 Describe and define the assertions that management makes about the recognition, measureme
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nt, presentation, and disclosure of the financial statements and explain why auditors use them as
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the focal point of the audit.
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Blooms: Remember N


AACSB: Analytical Thinking Acce
N N N


ssibility: Keyboard Navigation
N N




4) The confirmation of an account payable balance selected from the general ledger provides
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primary evidence regarding which management assertion?
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A) Completeness.
B) Valuation.
C) Allocation.
D) Existence. Answe N


r: D Difficulty: 2 Me
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dium
Topic: Management's Financial Statement Assertions
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Learning Objective: 01- N N


03 Describe and define the assertions that management makes about the recognition, measureme
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nt, presentation, and disclosure of the financial statements and explain why auditors use them as
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the focal point of the audit.
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Blooms: Remember N


AACSB: Analytical Thinking Acce
N N N


ssibility: Keyboard Navigation
N N




5) What type of evidence would provide the highest level of assurance in an attestation
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engagement?
A) Evidence secured solely from within the entity.
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B) Evidence obtained from independent sources.
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C) Evidence obtained indirectly. N N


D) Evidence obtained from multiple internal inquiries.
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NAnswer: B N


Difficulty: 3 Hard N N


Topic: Auditing, Attestation, and Assurance Services
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Learning Objective: 01- N N


02 Define and contrast financial statement auditing, attestation, and assurance services.
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Blooms: Remember N




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Copyright © 2018 McGraw-HillN N N

, AACSB: Analytical Thinking Acce
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ssibility: Keyboard Navigation
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Copyright © 2018 McGraw-Hill
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