TEST BANK For Auditing & Assurance Services:
A Systematic Approach, 12th Edition
Chapters 1 - 21 Complete
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,Chapter 1: An Introduction to Assurance and Financial Statement Auditing
Chapter 2: The Financial Statement Auditing Environment
Chapter 3: Audit Planning, Types of Audit Tests, and Materiality
Chapter 4: Risk Assessment
Chapter 5: Evidence and Documentation
Chapter 6: Internal Control in a Financial Statement Audit
Chapter 7: Auditing Internal Control over Financial Reporting
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Chapter 8: Audit Sampling: An Overview and Application to Tests of Controls
Chapter 9: Audit Sampling: An Application to Substantive Tests of Account Balances
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Chapter 10: Auditing the Revenue Process
Chapter 11: Auditing the Purchasing Process
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Chapter 12: Auditing the Human Resource Management Process
Chapter 13: Auditing the Inventory Management Process
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Chapter 14: Auditing the Financing/Investing Process: Prepaid Expenses, Intangible Assets,
and Property, Plant, and Equipment
Chapter 15: Auditing the Financing/Investing Process: Long-Term Liabilities, Stockholders’
Equity, and Income Statement Accounts
Chapter 16: Auditing the Financing/Investing Process: Cash and Investments
Chapter 17: Completing the Audit Engagement
Chapter 18: Reports on Audited Financial Statements
Chapter 19: Professional Conduct, Independence, and Quality Management
Chapter 20: Legal Liability
Chapter 21: Assurance, Attestation, and Internal Auditing Services
,Auditing & Assurance Services: A Systematic Approach, 12e (Messier)
Chapter 1 An Introduction to Assurance and Financial Statement Auditing
1) Auditing focuses on rules, techniques, and computations required to prepare and analyze
financial information.
ANSWER: FALSE
Difficulty: 1 Easy
Topic: The Importance for Studying Auditing
Learning Objective: 01-01 Understand why studying auditing can be valuable to you whether or
not you plan to become an auditor, and why it is different from studying accounting.
Bloom's: Remember
AACSB: Communication
AICPA: BB Legal; FN Decision Making
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2) Decision makers demand reliable information that is provided by accountants.
ANSWER: TRUE
Difficulty: 1 Easy
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Topic: The Demand for Auditing and Assurance
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Learning Objective: 01-02 Understand the demand for auditing and be able to explain the
desired characteristics of auditors and audit services through an analogy to a house inspector and
a house inspection service.
Bloom's: Understand
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AACSB: Communication
AICPA: FN Decision Making; BB Industry
3) Information asymmetry seldom occurs.
ANSWER: FALSE
Difficulty: 2 Medium
Topic: The Demand for Auditing and Assurance
Learning Objective: 01-02 Understand the demand for auditing and be able to explain the
desired characteristics of auditors and audit services through an analogy to a house inspector and
a house inspection service.
Bloom's: Apply
AACSB: Communication
AICPA: BB Industry; FN Reporting
, 4) Conflicts of interest often occur between absentee owners and managers.
ANSWER: TRUE
Difficulty: 2 Medium
Topic: The Demand for Auditing and Assurance
Learning Objective: 01-02 Understand the demand for auditing and be able to explain the
desired characteristics of auditors and audit services through an analogy to a house inspector and
a house inspection service.
Bloom's: Apply
AACSB: Communication
AICPA: BB Industry; FN Reporting
5) Auditing services and attestation services are the same.
ANSWER: FALSE
Difficulty: 1 Easy
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Topic: Auditing, Attest, and Assurance Services Defined
Learning Objective: 01-03 Understand the relationships among auditing, attestation, and
assurance services.
Bloom's: Understand
AACSB: Communication
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AICPA: BB Industry; FN Reporting
6) Auditing is a type of attest service.
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ANSWER: TRUE
Difficulty: 1 Easy
Topic: Auditing, Attest, and Assurance Services Defined
Learning Objective: 01-03 Understand the relationships among auditing, attestation, and
assurance services.; 01-04 Know the basic definition of a financial statement audit.
Bloom's: Understand
AACSB: Communication
AICPA: BB Industry; FN Reporting
7) Testing all transactions that occurred during the period is cost prohibitive.
ANSWER: TRUE
Difficulty: 2 Medium
Topic: The Audit Process
Learning Objective: 01-06 Be able to explain why on most audit engagements an auditor tests
only a sample of transactions that occurred.
Bloom's: Apply
AACSB: Communication
AICPA: FN Decision Making; BB Critical Thinking
A Systematic Approach, 12th Edition
Chapters 1 - 21 Complete
n k
r a
F
,Chapter 1: An Introduction to Assurance and Financial Statement Auditing
Chapter 2: The Financial Statement Auditing Environment
Chapter 3: Audit Planning, Types of Audit Tests, and Materiality
Chapter 4: Risk Assessment
Chapter 5: Evidence and Documentation
Chapter 6: Internal Control in a Financial Statement Audit
Chapter 7: Auditing Internal Control over Financial Reporting
k
Chapter 8: Audit Sampling: An Overview and Application to Tests of Controls
Chapter 9: Audit Sampling: An Application to Substantive Tests of Account Balances
n
Chapter 10: Auditing the Revenue Process
Chapter 11: Auditing the Purchasing Process
r a
Chapter 12: Auditing the Human Resource Management Process
Chapter 13: Auditing the Inventory Management Process
F
Chapter 14: Auditing the Financing/Investing Process: Prepaid Expenses, Intangible Assets,
and Property, Plant, and Equipment
Chapter 15: Auditing the Financing/Investing Process: Long-Term Liabilities, Stockholders’
Equity, and Income Statement Accounts
Chapter 16: Auditing the Financing/Investing Process: Cash and Investments
Chapter 17: Completing the Audit Engagement
Chapter 18: Reports on Audited Financial Statements
Chapter 19: Professional Conduct, Independence, and Quality Management
Chapter 20: Legal Liability
Chapter 21: Assurance, Attestation, and Internal Auditing Services
,Auditing & Assurance Services: A Systematic Approach, 12e (Messier)
Chapter 1 An Introduction to Assurance and Financial Statement Auditing
1) Auditing focuses on rules, techniques, and computations required to prepare and analyze
financial information.
ANSWER: FALSE
Difficulty: 1 Easy
Topic: The Importance for Studying Auditing
Learning Objective: 01-01 Understand why studying auditing can be valuable to you whether or
not you plan to become an auditor, and why it is different from studying accounting.
Bloom's: Remember
AACSB: Communication
AICPA: BB Legal; FN Decision Making
k
2) Decision makers demand reliable information that is provided by accountants.
ANSWER: TRUE
Difficulty: 1 Easy
n
Topic: The Demand for Auditing and Assurance
a
Learning Objective: 01-02 Understand the demand for auditing and be able to explain the
desired characteristics of auditors and audit services through an analogy to a house inspector and
a house inspection service.
Bloom's: Understand
r F
AACSB: Communication
AICPA: FN Decision Making; BB Industry
3) Information asymmetry seldom occurs.
ANSWER: FALSE
Difficulty: 2 Medium
Topic: The Demand for Auditing and Assurance
Learning Objective: 01-02 Understand the demand for auditing and be able to explain the
desired characteristics of auditors and audit services through an analogy to a house inspector and
a house inspection service.
Bloom's: Apply
AACSB: Communication
AICPA: BB Industry; FN Reporting
, 4) Conflicts of interest often occur between absentee owners and managers.
ANSWER: TRUE
Difficulty: 2 Medium
Topic: The Demand for Auditing and Assurance
Learning Objective: 01-02 Understand the demand for auditing and be able to explain the
desired characteristics of auditors and audit services through an analogy to a house inspector and
a house inspection service.
Bloom's: Apply
AACSB: Communication
AICPA: BB Industry; FN Reporting
5) Auditing services and attestation services are the same.
ANSWER: FALSE
Difficulty: 1 Easy
k
Topic: Auditing, Attest, and Assurance Services Defined
Learning Objective: 01-03 Understand the relationships among auditing, attestation, and
assurance services.
Bloom's: Understand
AACSB: Communication
n a
AICPA: BB Industry; FN Reporting
6) Auditing is a type of attest service.
r F
ANSWER: TRUE
Difficulty: 1 Easy
Topic: Auditing, Attest, and Assurance Services Defined
Learning Objective: 01-03 Understand the relationships among auditing, attestation, and
assurance services.; 01-04 Know the basic definition of a financial statement audit.
Bloom's: Understand
AACSB: Communication
AICPA: BB Industry; FN Reporting
7) Testing all transactions that occurred during the period is cost prohibitive.
ANSWER: TRUE
Difficulty: 2 Medium
Topic: The Audit Process
Learning Objective: 01-06 Be able to explain why on most audit engagements an auditor tests
only a sample of transactions that occurred.
Bloom's: Apply
AACSB: Communication
AICPA: FN Decision Making; BB Critical Thinking
