Auditing & Assurance Services 9th Edition Test Bank – Timothy Louwers, Jerry Strawser

TestVBankVforVAuditingV&VAssuranceVServicesV9thVEditionVbyVTimothyV
Louwers,VJerryVStrawser

ChapV01V9 AnswersVIncluded
e
1) TheVauditVobjectiveVthatVallVtransactionsVandVaccountsVthatVshouldVbeVpresentedVinVtheVf
inancialVstatementsVareVinVfactVincludedVisVrelatedVtoVwhichVofVtheVPCAOBVassertions?
A) Existence
B) RightsVandVobligations
C) Completeness
D) Valuation



2) CutoffVtestsVdesignedVtoVdetectVpurchasesVmadeVbeforeVtheVendVofVtheVyearVthatVha
veVbeenVrecordedVinVtheVsubsequentVyearVprovideVassuranceVaboutVmanagement'sVa
ssertionVof
A) presentationVandVdisclosure.
B) completeness.
C) rightsVandVobligations.
D) existence.



3) DuringVanVauditVofVanVentity'sVstockholders'VequityVaccounts,VtheVauditorVdeterminesVw
hetherVthereVareVrestrictionsVonVretainedVearningsVresultingVfromVloans,Vagreements,VorVs
tateVlaw.VThisVauditVprocedureVmostVlikelyVisVintendedVtoVverifyVmanagement'sVassertio
nVof
A) existenceVorVoccurrence.
B) completeness.
C) valuationVorVallocation.
D) presentationVandVdisclosure.



4) TheVconfirmationVofVanVaccountVpayableVbalanceVselectedVfromVtheVgeneralVledgerVpr
ovidesVprimaryVevidenceVregardingVwhichVmanagementVassertion?
A) Completeness
B) Valuation
C) Allocation
D) Existence




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,5) WhatVtypeVofVevidenceVwouldVprovideVtheVhighestVlevelVofVassuranceVinVanVatt
estationVengagement?
A) EvidenceVsecuredVsolelyVfromVwithinVtheVentity.
B) EvidenceVobtainedVfromVindependentVsources.
C) EvidenceVobtainedVindirectly.
D) EvidenceVobtainedVfromVmultipleVinternalVinquiries.



6) WhichVofVtheVfollowingVmanagementVassertionsVisVanVauditorVmostVlikelyVtestingVifVt
heVauditVobjectiveVstatesVthatVallVinventoryVonVhandVisVreflectedVinVtheVendingVinvent
oryVbalance?
A) TheVentityVhasVrightsVtoVtheVinventory.
B) InventoryVisVproperlyVvalued.
C) InventoryVisVproperlyVpresentedVinVtheVfinancialVstatements.
D) InventoryVisVcomplete.



7) AnVauditorVtracesVtheVserialVnumbersVonVequipmentVtoVaVnonissuer'sVsubledger.VWhic
hVofVtheVfollowingVmanagementVassertionsVisVsupportedVbyVthisVtest?
A) ValuationVandVallocation
B) Completeness
C) RightsVandVobligations
D) PresentationVandVdisclosure



8) AnVauditorVhasVsubstantialVdoubtVaboutVtheVentity'sVabilityVtoVcontinueVasVaVgoingVconc
ernVforVaVreasonableVperiodVofVtimeVbecauseVofVnegativeVcashVflowsVandVworkingVcapit
alVdeficiencies.VUnderVtheseVcircumstances,VtheVauditorVwouldVbeVmostVconcernedVabout
Vthe
A) controlVenvironmentVfactorsVthatVaffectVtheVorganizationalVstructure.
B) correlationVofVdetectionVriskVandVinherentVrisk.
C) effectivenessVofVtheVentity'sVinternalVcontrolVactivities.
D) possibleVeffectsVonVtheVentity'sVfinancialVstatements.



9) WhichVofVtheVfollowingVtypesVofVauditVevidenceVprovidesVtheleastVassuranceVofVreliability?
A) ReceivableVconfirmationsVreceivedVfromVtheVclient'sVcustomers.
B) PrenumberedVreceivingVreportsVcompletedVbyVtheVclient'sVemployees.
C) PriorVmonths'VbankVstatementsVobtainedVfromVtheVclient.
D) MunicipalVpropertyVtaxVbillsVpreparedVinVtheVclient'sVname.




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,10) WhichVofVtheVfollowingVisVaVmanagementVassertionVregardingVaccountVbalancesVatVthe
VperiodVend?
A) TransactionsVandVeventsVthatVhaveVbeenVrecordedVhaveVoccurredVandVpertain
VtoVtheVentity.
B) TransactionsVandVeventsVhaveVbeenVrecordedVinVtheVproperVaccounts.
C) TheVentityVholdsVorVcontrolsVtheVrightsVtoVassets,VandVliabilitiesVareVobligation
sVofVtheVentity.
D) AmountsVandVotherVdataVrelatedVtoVtheVtransactionsVandVeventsVhaveVbeenVre
cordedVappropriately.


11) AVpractitionerVisVengagedVtoVexpressVanVopinionVonVmanagement'sVassertionVthatVtheV
squareVfootageVofVaVwarehouseVofferedVforVsaleVisV150,000VsquareVfeet.VTheVpractition
erVshouldVreferVtoVwhichVofVtheVfollowingVsourcesVforVprofessionalVguidance?
A) StatementVofVAuditingVStandards.
B) StatementsVonVStandardsVforVAttestationVEngagements.
C) StatementsVonVStandardsVforVAccountingVandVReviewVServices.
D) StatementsVonVStandardsVforVConsultingVServices.



12) InVauditingVtheVlong-
termVdebtVaccount,VanVauditor'sVproceduresVmostVlikelyVwouldVfocusVprimarilyVonV
management'sVassertionVof
A) existence.
B) completeness.
C) allocation.
D) rightsVandVobligations.



13) AnVauditorVselectedVitemsVforVtestVcountsVfromVtheVclient'sVwarehouseVduringVtheVphysi
calVinventoryVobservation.VTheVauditorVthenVtracedVtheseVtestVcountsVintoVtheVdetailedVi
nventoryVlistingVthatVultimatelyVagreedVtoVtheVfinancialVstatements.VThisVprocedureVmost
VlikelyVprovidedVevidenceVconcerningVmanagement'sVassertionVof
A) completeness.
B) valuation.
C) presentationVandVdisclosure.
D) existence.
E) rightsVandVobligations.




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, 14) AnVauditorVselectedVitemsVfromVtheVclient'sVdetailedVinventoryVlistingV(thatVagreedVtoVt
heVfinancialVstatements).VDuringVtheVphysicalVinventoryVobservation,VtheVauditorVthenVfo
undVeachVitemVselectedVandVcountedVtheVnumberVofVunitsVonVhand.VAssumingVthatVthe
VamountVonVhandVwasVtheVsameVasVtheVamountVinVtheVclient'sVdetailedVinventoryVlistin
g,VthisVprocedureVmostVlikelyVwouldVprovideVevidenceVconcerningVmanagement'sVasserti
onVof
A) completeness.
B) valuation.
C) presentationVandVdisclosure.
D) existence.
E) rightsVandVobligations.



15) AccordingVtoVPCAOBVAuditingVStandardVNo.V2201V(VASV2201),VtheVauditorVshouldVi
dentifyVsignificantVaccountsVandVdisclosuresVandVtheirVrelevantVassertions.VWhichVofV
theVfollowingVfinancialVstatementVassertionsVisVnotVexplicitlyVidentifiedVinVASV2201?
A) Completeness
B) ValuationVorVallocation
C) Accuracy
D) ExistenceVorVoccurrence
E) AllVofVtheseVareVassertionsVidentifiedVinVASV2201.



16) WhenVtestingVtheVcompletenessVassertionVforVaVliabilityVaccount,VanVauditorVordinarily
VworksVfromVthe
A) financialVstatementsVtoVtheVpotentiallyVunrecordedVitems.
B) potentiallyVunrecordedVitemsVtoVtheVfinancialVstatements.
C) accountingVrecordsVtoVtheVsupportingVevidence.
D) trialVbalanceVtoVtheVsubsidiaryVledger.


17) IfVanVauditorVisVperformingVproceduresVrelatedVtoVtheVinformationVthatVisVcontainedVin
VtheVclient'sVpensionVfootnote,Vhe/sheVisVmostVlikelyVtoVobtainVevidenceVconcerningVm
anagement'sVassertionVabout
A) rightsVandVobligations.
B) existence.
C) valuation.
D) presentationVandVdisclosure.




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