TEST BANK For Auditing and Assurance Services, 9th Edition By Timothy Louwers, Penelope Bagley, Verified Chapter's 1 - 12, Complete Newest Version Updated A+

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, Test Bank forAuditing & Assurance Services 9th
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Edition by Timothy Louwers, Jerry Strawser
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Chap 01 9e
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Answers Included c




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


C) Completeness
D) Valuation



2) Cutoff tests designed to detect purchases made before the end of the year that have been
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c recorded in the subsequent year provide assurance about management's assertion of
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A) presentation and disclosure. c c


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


D) existence.



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


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


D) presentation and disclosure. c c




4) The confirmation of an account payable balance selected from the general ledger provides
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c 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 in an attestation
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c engagement?
A) Evidence secured solely from within the entity.
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B) Evidence obtained from independent sources. c c c c


C) Evidence obtained indirectly. c c


D) Evidence obtained from multiple internal inquiries.
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6) Which of the following management assertions is an auditor most likely testing if the audit
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c objective states that all inventory on hand is reflected in the ending inventory balance?
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A) The entity has rights to the inventory.
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B) Inventory is properly valued. c c c


C) Inventory is properly presented in the financial statements.
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D) Inventory is complete. c c




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


B) Completeness
C) Rights and obligations c c


D) Presentation and disclosure c c




8) An auditor has substantial doubt about the entity's ability to continue as a going concern for a
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c reasonable period of time because of negative cash flows and working capital deficiencies.
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c Under these circumstances, the auditor would be 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. c c c c c c


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


D) possible effects on the entity's financial statements.
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9) Which of the following types of audit evidence provides theleast assurance of reliability?
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A) Receivable confirmations received from the client's customers. c c c c c c


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


C) Prior months' bank statements obtained from the client.
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D) Municipal property tax bills prepared in the client's name.
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, 10) Which of the following is a management assertion regarding account balances at the period
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c end?
A) Transactions and events that have been recorded have occurred and pertain to the
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entity.
c



B) Transactions and events have been recorded in the proper accounts. c c c c c c c c c


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




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


B) Statements on Standards for Attestation Engagements. c c c c c


C) Statements on Standards for Accounting and Review Services. c c c c c c c


D) Statements on Standards for Consulting Services. c c c c c




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




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


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




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