AUDITING & ASSURANCE SERVICES, 7E (LOUWERS)
QUESTIONS AND CORRECT VERIFIED
ANSWERS|UPDATED|ALL CHAPTERS AVAILABLE
Chapter 1 Auditing and Assurance Services
1) The audit objective that all transactions and accounts that should be presented in The
financial statements are in fact included is related to Which of The PCAOB assertions?
A) Existence.
B) Rights and obligations.
C) Completeness.
,D) Valuation.
Answer: C
Difficulty: 1 Easy
Topic: Management's Financial Statement Assertions
Learning Objective: 01-03 Describe and define The assertions that management makes about
The recognition, measurement, presentation, and disclosure of The financial statements and
explain why auditors use Them as The focal point of The audit.
Blooms: Remember
AACSB: Analytical Thinking
Accessibility: Keyboard Navigation
2) Cutoff tests designed to detect purchases made before The end of The year that have
been recorded in The subsequent year provide assurance about management's assertion
of:
A) presentation and disclosure.
B) completeness.
C) rights and obligations.
D) existence.
Answer: B Difficulty:
2 Medium
Topic: Management's Financial Statement Assertions
Learning Objective: 01-03 Describe and define The assertions that management makes about
The recognition, measurement, presentation, and disclosure of The financial statements and
explain why auditors use Them as The focal point of The audit.
Blooms: Remember
AACSB: Analytical Thinking
Accessibility: Keyboard Navigation
,3) During an audit of an entity's stockholders' equity accounts, The auditor determines
wheTher There are restrictions on retained earnings resulting from loans, agreements, or
state law. This audit procedure most likely is intended to verify management's assertion of:
A) existence or occurrence.
B) completeness.
C) valuation or allocation.
D) presentation and
disclosure. Answer: D
Difficulty: 2 Medium
Topic: Management's Financial Statement Assertions
Learning Objective: 01-03 Describe and define The assertions that management makes about
The recognition, measurement, presentation, and disclosure of The financial statements and
explain why auditors use Them as The focal point of The audit.
Blooms: Remember
AACSB: Analytical Thinking
Accessibility: Keyboard Navigation
4) The confirmation of an account payable balance selected from The general ledger
provides primary evidence regarding Which management assertion?
A) Completeness.
B) Valuation.
C) Allocation.
D) Existence.
Answer: D Difficulty:
2 Medium
Topic: Management's Financial Statement Assertions
Learning Objective: 01-03 Describe and define The assertions that management makes about
The recognition, measurement, presentation, and disclosure of The financial statements and
explain why auditors use Them as The focal point of The audit.
Blooms: Remember
AACSB: Analytical Thinking
Accessibility: Keyboard Navigation
5) What type of evidence would provide The highest level of assurance in an
attestation engagement?
A) Evidence secured solely from within The entity.
B) Evidence obtained from independent sources.
C) Evidence obtained indirectly.
D) Evidence obtained from multiple internal
inquiries. Answer: B
Difficulty: 3 Hard
Topic: Auditing, Attestation, and Assurance Services
Learning Objective: 01-02 Define and contrast financial statement auditing, attestation, and
assurance services.
Blooms: Remember
, AACSB: Analytical Thinking
Accessibility: Keyboard Navigation
QUESTIONS AND CORRECT VERIFIED
ANSWERS|UPDATED|ALL CHAPTERS AVAILABLE
Chapter 1 Auditing and Assurance Services
1) The audit objective that all transactions and accounts that should be presented in The
financial statements are in fact included is related to Which of The PCAOB assertions?
A) Existence.
B) Rights and obligations.
C) Completeness.
,D) Valuation.
Answer: C
Difficulty: 1 Easy
Topic: Management's Financial Statement Assertions
Learning Objective: 01-03 Describe and define The assertions that management makes about
The recognition, measurement, presentation, and disclosure of The financial statements and
explain why auditors use Them as The focal point of The audit.
Blooms: Remember
AACSB: Analytical Thinking
Accessibility: Keyboard Navigation
2) Cutoff tests designed to detect purchases made before The end of The year that have
been recorded in The subsequent year provide assurance about management's assertion
of:
A) presentation and disclosure.
B) completeness.
C) rights and obligations.
D) existence.
Answer: B Difficulty:
2 Medium
Topic: Management's Financial Statement Assertions
Learning Objective: 01-03 Describe and define The assertions that management makes about
The recognition, measurement, presentation, and disclosure of The financial statements and
explain why auditors use Them as The focal point of The audit.
Blooms: Remember
AACSB: Analytical Thinking
Accessibility: Keyboard Navigation
,3) During an audit of an entity's stockholders' equity accounts, The auditor determines
wheTher There are restrictions on retained earnings resulting from loans, agreements, or
state law. This audit procedure most likely is intended to verify management's assertion of:
A) existence or occurrence.
B) completeness.
C) valuation or allocation.
D) presentation and
disclosure. Answer: D
Difficulty: 2 Medium
Topic: Management's Financial Statement Assertions
Learning Objective: 01-03 Describe and define The assertions that management makes about
The recognition, measurement, presentation, and disclosure of The financial statements and
explain why auditors use Them as The focal point of The audit.
Blooms: Remember
AACSB: Analytical Thinking
Accessibility: Keyboard Navigation
4) The confirmation of an account payable balance selected from The general ledger
provides primary evidence regarding Which management assertion?
A) Completeness.
B) Valuation.
C) Allocation.
D) Existence.
Answer: D Difficulty:
2 Medium
Topic: Management's Financial Statement Assertions
Learning Objective: 01-03 Describe and define The assertions that management makes about
The recognition, measurement, presentation, and disclosure of The financial statements and
explain why auditors use Them as The focal point of The audit.
Blooms: Remember
AACSB: Analytical Thinking
Accessibility: Keyboard Navigation
5) What type of evidence would provide The highest level of assurance in an
attestation engagement?
A) Evidence secured solely from within The entity.
B) Evidence obtained from independent sources.
C) Evidence obtained indirectly.
D) Evidence obtained from multiple internal
inquiries. Answer: B
Difficulty: 3 Hard
Topic: Auditing, Attestation, and Assurance Services
Learning Objective: 01-02 Define and contrast financial statement auditing, attestation, and
assurance services.
Blooms: Remember
, AACSB: Analytical Thinking
Accessibility: Keyboard Navigation
