Auditing & Assurance Services
H H H
TEST BANK
Auditing & Assurance Services: A
Systematic Approach, 11th Edition
Chapters 1 - 21
,Auditing & Assurance Services
H H H
ChapterH1:HAnHIntroductionHtoHAssuranceHandHFinancialHStatementHAuditing
ChapterH2:HTheHFinancialHStatementHAuditingHEnvironment
ChapterH3:HAuditHPlanning,HTypesHofHAuditHTests,HandHMateriality
ChapterH4:HRiskHAssessment
ChapterH5:HEvidenceHandHDocumentation
ChapterH6:HInternalHControlHinHaHFinancialHStatementHAudit
ChapterH7:HAuditingHInternalHControlHoverHFinancialHReporting
ChapterH8:HAuditHSampling:HAnHOverviewHandHApplicationHtoHTestsHofHControls
ChapterH9:HAuditHSampling:HAnHApplicationHtoHSubstantiveHTestsHofHAccountHBalances
ChapterH10:HAuditingHtheHRevenueHProcess
ChapterH11:HAuditingHtheHPurchasingHProcess
ChapterH12:HAuditingHtheHHumanHResourceHManagementHProcess
ChapterH13:HAuditingHtheHInventoryHManagementHProcess
ChapterH14:HAuditingHtheHFinancing/InvestingHProcess:HPrepaidHExpenses,HIntangibleHAssets,H
andHProperty,HPlant,HandHEquipment
ChapterH15:HAuditingHtheHFinancing/InvestingHProcess:HLong-
TermHLiabilities,HStockholders’HEquity,HandHIncomeHStatementHAccounts
ChapterH16:HAuditingHtheHFinancing/InvestingHProcess:HCashHandHInvestments
ChapterH17:HCompletingHtheHAuditHEngagement
ChapterH18:HReportsHonHAuditedHFinancialHStatements
ChapterH19:HProfessionalHConduct,HIndependence,HandHQualityHManagement
ChapterH20:HLegalHLiability
ChapterH21:HAssurance,HAttestation,HandHInternalHAuditingHServices
,Auditing & Assurance Services
H H H
Chapter 01 H H
An Introduction to Assurance and Financial Statement Auditing
H H H H H H H
TrueH /H FalseH Questions
1. IndependenceH standards H areH requiredH forH auditsH ofH publicH companies,H butH notH forH audit
sHofHprivateHcompanies.
True False
2. DecisionH makersH demandH reliableH informationH thatH isH providedH byH accountants.
True False
3. InformationH asymmetryH seldomH occurs.
True False
4. ConflictsH ofH interestHoftenHoccurH betweenH absenteeH ownersH andH managers.
True False
5. AuditingH servicesH andH attestationH servicesH areH theH same.
True False
6. AuditingHisHaHtypeHofHattestHservice.
True False
7. TestingHallHtransactions HthatHoccurredHduringHtheHperiodHisHcostHprohibitive.
True False
MultipleHChoiceH Questions
, Auditing & Assurance Services
H H H
8. WhyHdoHauditorsHgenerallyHuseHaHsamplingHapproachHtoHevidenceHgathering?
A. AuditorsH areHexperts H andHdoHnotHneedHtoHlookHatHmuch HtoHknowHwhetherHtheHfinancia
lHstatementsHareHcorrectHorHnot.
B. AuditorsH mustHbalanceHtheHcostHofHtheHauditHwithHtheHneedHfo
rHprecision.
C. AuditorsHmustHlimitHtheirHexposureHtoHtheirHauditeeHtoHmaintai
nHindependence.
D. TheHauditor's HrelationshipHwithHtheHauditeeHisHgenerallyHadversarial,HsoHtheHauditorHwil
lHnotHhaveHaccessHtoHallHofHtheHfinancialHinformationHofHtheHcompany.
9. WhichH ofH theH followingH statements H bestH describesH aH relationshipH betweenH sampleH sizeH an
dHotherHelementsHofHauditing?
A. IfH materialityH increases,H soH willH th
eHsampleH size.
B. IfH theH desiredH levelH ofH assuranceH increases,H sampleH sizesH canH b
eHsmaller.
C. IfHmaterialityHdecreases,HsampleHsizeHwillHneedHt
oHincrease.
D. ThereH isHnoHrelationshipH betweenHsampleHsizeH andH materialityHorHtheH desiredHleve
lHofHassurance.
10. WhichH ofHtheH followingHstatements H aboutH theH studyHofH auditingH isH NOTH true?
A. TheH studyH ofH auditingH canH beH valuableH toH futureH accountants H andH businessH decisio
nHmakersHwhetherHorHnotHtheyHplanHtoHbecomeHauditors.
B. TheH studyH ofH auditingH focusesH onH learningH theH analyticalH andH logicalH skillsH necessaryH t
oHevaluateHtheHrelevance HandHreliabilityHofHinformation.
C. TheH studyH ofH auditingH focusesH onH learningH theH rules,H techniques,H andH computation
sHrequiredHtoHanalyzeHfinancialHstatements.
D. TheH studyH ofH auditingH beginsH withH theH understandingH ofH aH coherentH logicalH framework
HandHtechniques HusefulHforHgatheringHandHanalyzing Hevidence HaboutHothers' Hassertion
s.
11. TheHbasicHpurposeHofHaHfinancialHstatementHauditHisHto
A. DetectH
fraud.
B. ExamineH individualH transactions H soH thatH theH auditorH mayH certifyH asH t
oHtheirHvalidity.
C. ProvideH assuranceH regardingH whetherH theH auditee's H financialH statementsH are
fairlyHstated.
H
D. AssureH theH consistent H applicationH ofH correctH accounting
procedures.
H
H H H
TEST BANK
Auditing & Assurance Services: A
Systematic Approach, 11th Edition
Chapters 1 - 21
,Auditing & Assurance Services
H H H
ChapterH1:HAnHIntroductionHtoHAssuranceHandHFinancialHStatementHAuditing
ChapterH2:HTheHFinancialHStatementHAuditingHEnvironment
ChapterH3:HAuditHPlanning,HTypesHofHAuditHTests,HandHMateriality
ChapterH4:HRiskHAssessment
ChapterH5:HEvidenceHandHDocumentation
ChapterH6:HInternalHControlHinHaHFinancialHStatementHAudit
ChapterH7:HAuditingHInternalHControlHoverHFinancialHReporting
ChapterH8:HAuditHSampling:HAnHOverviewHandHApplicationHtoHTestsHofHControls
ChapterH9:HAuditHSampling:HAnHApplicationHtoHSubstantiveHTestsHofHAccountHBalances
ChapterH10:HAuditingHtheHRevenueHProcess
ChapterH11:HAuditingHtheHPurchasingHProcess
ChapterH12:HAuditingHtheHHumanHResourceHManagementHProcess
ChapterH13:HAuditingHtheHInventoryHManagementHProcess
ChapterH14:HAuditingHtheHFinancing/InvestingHProcess:HPrepaidHExpenses,HIntangibleHAssets,H
andHProperty,HPlant,HandHEquipment
ChapterH15:HAuditingHtheHFinancing/InvestingHProcess:HLong-
TermHLiabilities,HStockholders’HEquity,HandHIncomeHStatementHAccounts
ChapterH16:HAuditingHtheHFinancing/InvestingHProcess:HCashHandHInvestments
ChapterH17:HCompletingHtheHAuditHEngagement
ChapterH18:HReportsHonHAuditedHFinancialHStatements
ChapterH19:HProfessionalHConduct,HIndependence,HandHQualityHManagement
ChapterH20:HLegalHLiability
ChapterH21:HAssurance,HAttestation,HandHInternalHAuditingHServices
,Auditing & Assurance Services
H H H
Chapter 01 H H
An Introduction to Assurance and Financial Statement Auditing
H H H H H H H
TrueH /H FalseH Questions
1. IndependenceH standards H areH requiredH forH auditsH ofH publicH companies,H butH notH forH audit
sHofHprivateHcompanies.
True False
2. DecisionH makersH demandH reliableH informationH thatH isH providedH byH accountants.
True False
3. InformationH asymmetryH seldomH occurs.
True False
4. ConflictsH ofH interestHoftenHoccurH betweenH absenteeH ownersH andH managers.
True False
5. AuditingH servicesH andH attestationH servicesH areH theH same.
True False
6. AuditingHisHaHtypeHofHattestHservice.
True False
7. TestingHallHtransactions HthatHoccurredHduringHtheHperiodHisHcostHprohibitive.
True False
MultipleHChoiceH Questions
, Auditing & Assurance Services
H H H
8. WhyHdoHauditorsHgenerallyHuseHaHsamplingHapproachHtoHevidenceHgathering?
A. AuditorsH areHexperts H andHdoHnotHneedHtoHlookHatHmuch HtoHknowHwhetherHtheHfinancia
lHstatementsHareHcorrectHorHnot.
B. AuditorsH mustHbalanceHtheHcostHofHtheHauditHwithHtheHneedHfo
rHprecision.
C. AuditorsHmustHlimitHtheirHexposureHtoHtheirHauditeeHtoHmaintai
nHindependence.
D. TheHauditor's HrelationshipHwithHtheHauditeeHisHgenerallyHadversarial,HsoHtheHauditorHwil
lHnotHhaveHaccessHtoHallHofHtheHfinancialHinformationHofHtheHcompany.
9. WhichH ofH theH followingH statements H bestH describesH aH relationshipH betweenH sampleH sizeH an
dHotherHelementsHofHauditing?
A. IfH materialityH increases,H soH willH th
eHsampleH size.
B. IfH theH desiredH levelH ofH assuranceH increases,H sampleH sizesH canH b
eHsmaller.
C. IfHmaterialityHdecreases,HsampleHsizeHwillHneedHt
oHincrease.
D. ThereH isHnoHrelationshipH betweenHsampleHsizeH andH materialityHorHtheH desiredHleve
lHofHassurance.
10. WhichH ofHtheH followingHstatements H aboutH theH studyHofH auditingH isH NOTH true?
A. TheH studyH ofH auditingH canH beH valuableH toH futureH accountants H andH businessH decisio
nHmakersHwhetherHorHnotHtheyHplanHtoHbecomeHauditors.
B. TheH studyH ofH auditingH focusesH onH learningH theH analyticalH andH logicalH skillsH necessaryH t
oHevaluateHtheHrelevance HandHreliabilityHofHinformation.
C. TheH studyH ofH auditingH focusesH onH learningH theH rules,H techniques,H andH computation
sHrequiredHtoHanalyzeHfinancialHstatements.
D. TheH studyH ofH auditingH beginsH withH theH understandingH ofH aH coherentH logicalH framework
HandHtechniques HusefulHforHgatheringHandHanalyzing Hevidence HaboutHothers' Hassertion
s.
11. TheHbasicHpurposeHofHaHfinancialHstatementHauditHisHto
A. DetectH
fraud.
B. ExamineH individualH transactions H soH thatH theH auditorH mayH certifyH asH t
oHtheirHvalidity.
C. ProvideH assuranceH regardingH whetherH theH auditee's H financialH statementsH are
fairlyHstated.
H
D. AssureH theH consistent H applicationH ofH correctH accounting
procedures.
H
