TEST BANK for Auditing & Assurance Services, 5th Edition by Louwers, Bagley, Blay, Strawser & Thibodeau.||ISBN NO-10,0077520165||ISBN NO-13,978-0077520168||All Chapters

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, TestBank forAuditing &Assurance Services 9th
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Edition by Timothy Louwers, Jerry Strawser
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Chap 01 9e jj jj
Answers Included j j jj




1) The audit objective that all transactions and accounts that should be presented
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j j in the financial statements are in fact included is related to which of the
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j j PCAOB assertions? j j


A) Existence
B) Rights and obligations j j j j


C) Completeness
D) Valuation



2) Cutoff tests designed to detect purchases made before the end of the year
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jj that have been recorded in the subsequent year provide assurance about
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j j management's assertion of jj j j



A) presentation and disclosure. j j j j


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


D) existence.



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


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


D) presentation and disclosure. j j j j




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




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,5) What type of evidence would provide the highest level of assurance
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jj in an attestation engagement?
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A) Evidence secured solely from within the entity. j j j j j j j j j j j j


B) Evidence obtained from independent sources. jj j j j j j j


C) Evidence obtained indirectly. jj j j


D) Evidence obtained from multiple internal inquiries. jj j j j j jj j j




6) Which of the following management assertions is an auditor most likely testing if the
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jj audit objective states that all inventory on hand is reflected in the ending inventory
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jj balance?
A) The entity has rights to the inventory.
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B) Inventory is properly valued. j j j j j j


C) Inventory is properly presented in the financial statements. jj j j j j j j j j j j j j


D) Inventory is complete. jj j j




7) An auditor traces the serial numbers on equipment to a nonissuer's subledger.
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jj Which of the following management assertions is supported by this test?
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A) Valuation and allocation jj j j


B) Completeness
C) Rights and obligations j j j j


D) Presentation and disclosure jj jj




8) An auditor has substantial doubt about the entity's ability to continue as a going
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jj concern for a reasonable period of time because of negative cash flows and
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j j working capital deficiencies. Under these circumstances, the auditor would be
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j j most concerned about the
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A) control environment factors that affect the organizational structure.
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B) correlation of detection risk and inherent risk. jj j j j j j j jj j j


C) effectiveness of the entity's internal control activities. jj j j jj jj jj j j


D) possible effects on the entity's financial statements. jj j j j j jj j j j j




9) Which of the following types of audit evidence provides theleast assurance of
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j j reliability?
A) Receivable confirmations received from the client's customers. jj jj j j jj j j j j


B) Prenumbered receiving reports completed by the client's employees. j j j j j j j j jj jj j j


C) Prior months' bank statements obtained from the client.
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D) Municipal property tax bills prepared in the client's name. jj jj j j j j j j j j j j j j




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, 10) Which of the following is a management assertion regarding account balances
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jj at the period end?
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A) Transactions and events that have been recorded have occurred and jj jj jj jj jj jj jj jj jj


pertain to the entity.
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B) Transactions and events have been recorded in the proper accounts. jj j j j j jj j j j j jj jj j j


C) The entity holds or controls the rights to assets, and liabilities are
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obligations of the entity.
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D) Amounts and other data related to the transactions and events have jj jj jj jj jj jj jj jj jj jj


been recorded appropriately.
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11) A practitioner is engaged to express an opinion on management's assertion
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j j that the square footage of a warehouse offered for sale is 150,000 square feet.
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jj The practitioner should refer to which of the following sources for
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j j professional guidance? j j



A) Statement of Auditing Standards. jj j j j j


B) Statements on Standards for Attestation Engagements. jj j j j j j j j j


C) Statements on Standards for Accounting and Review Services. jj j j j j j j j j j j j j


D) Statements on Standards for Consulting Services. jj j j j j jj j j




12) In auditing the long-term debt account, an auditor's procedures most likely
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would focus primarily on management's assertion of
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A) existence.
B) completeness.
C) allocation.
D) rights and obligations. j j j j




13) An auditor selected items for test counts from the client's warehouse
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during the physical inventory observation. The auditor then traced these
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test counts into the detailed inventory listing that ultimately agreed to the
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financial statements. This procedure most likely provided evidence
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concerning management's assertion of
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A) completeness.
B) valuation.
C) presentation and disclosure. j j j j


D) existence.
E) rights and obligations. j j j j




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