TEST BANK FOR AUDITING & ASSURANCE
SERVICES: A SYSTEMATIC APPROACH 12TH
EDITION BY WILLIAM MESSIER, STEVEN GLOVER
1
,1) Why Do Auditors Often Use A Sampling Approach To Evidence Gathering?
A) Auditors Are Experts And Do Not Need To Look At Much To Know Whether
The Financial Statements Are Correct Or Not.
B) Auditors Must Balance The Cost Of The Audit With The Need For Precision
And For Some Types Of Evidence, Computer Data Analytic Approaches Can‘t Be
Used.
C) Auditors Must Limit Their Exposure To Their Auditee To Maintain Independence.
D) The Auditor's Relationship With The Auditee Is Generally Adversarial, So The
Auditor Will Not Have Access To All Of The Financial Information Of The Company.
2) Which Of The Following Statements Best Describes A Relationship Between
Sample Size And Other Elements Of Auditing?
A) If Materiality Increases, So Will The Sample Size.
B) If The Desired Level Of Assurance Increases, Sample Sizes Can Be Smaller.
C) If Materiality Decreases, Sample Size Will Need To Increase.
D) There Is No Relationship Between Sample Size And Materiality Or The
Desired Level Of Assurance.
3) Which Of The Following Statements About The Study Of Auditing Is NOT True?
A) The Study Of Auditing Can Be Valuable To Future Accountants And
Business Decision Makers Whether Or Not They Plan To Become Auditors.
B) The Study Of Auditing Focuses On Learning The Analytical And Logical
Skills Necessary To Evaluate The Relevance And Reliability Of Information.
C) The Study Of Auditing Focuses On Learning The Rules, Techniques, And
Computations Required To Analyze Financial Statements For Making Investment
Recommendations.
D) The Study Of Auditing Begins With The Understanding Of A Coherent
Logical Framework And Techniques Useful For Gathering And Analyzing Evidence
About Others‘ Assertions.
4) The Basic Definition Of Auditing Essentially Indicates That, Overall, Auditing Is A Process
To:
2
, A) Detect Fraud.
B) Examine Individual Transactions So That The Auditor May Certify As To Their
Validity.
C) Objectively Obtain And Evaluate Evidence Regarding Assertions Made By
Another Party.
D) Assure The Consistent Application Of Correct Accounting Procedures.
5) Assurance Services May Improve All Of The Following Except:
A) Relevance.
B) Credibility.
C) Periodicity.
D) Reliability.
6) Evidence Is Reliable If It:
A) Signals The True State Of A Management Assertion.
B) Applies To The Period Being Audited.
C) Relates To The Audit Assertion Being Tested.
D) Is Sufficient To Justify A Conclusion.
7) Which Of The Following Best Describes The Concept Of Audit Risk?
A) The Risk Of The Auditor Being Sued Because Of Association With An
Auditee.
B) The Risk That The Auditor Will Provide An Inappropriate Opinion
On Financial Statements That Are, In Fact, Materially Misstated.
C) The Overall Risk That A Material Misstatement Exists In The Financial
Statements.
D) The Risk That Auditors Use Audit Procedures That Are Inappropriate.
3
, 8) An Auditor Who Accepts An Audit Engagement And Does Not Possess
Expertise With Respect To The Business Entity‘s Industry At That Point, Should:
4
SERVICES: A SYSTEMATIC APPROACH 12TH
EDITION BY WILLIAM MESSIER, STEVEN GLOVER
1
,1) Why Do Auditors Often Use A Sampling Approach To Evidence Gathering?
A) Auditors Are Experts And Do Not Need To Look At Much To Know Whether
The Financial Statements Are Correct Or Not.
B) Auditors Must Balance The Cost Of The Audit With The Need For Precision
And For Some Types Of Evidence, Computer Data Analytic Approaches Can‘t Be
Used.
C) Auditors Must Limit Their Exposure To Their Auditee To Maintain Independence.
D) The Auditor's Relationship With The Auditee Is Generally Adversarial, So The
Auditor Will Not Have Access To All Of The Financial Information Of The Company.
2) Which Of The Following Statements Best Describes A Relationship Between
Sample Size And Other Elements Of Auditing?
A) If Materiality Increases, So Will The Sample Size.
B) If The Desired Level Of Assurance Increases, Sample Sizes Can Be Smaller.
C) If Materiality Decreases, Sample Size Will Need To Increase.
D) There Is No Relationship Between Sample Size And Materiality Or The
Desired Level Of Assurance.
3) Which Of The Following Statements About The Study Of Auditing Is NOT True?
A) The Study Of Auditing Can Be Valuable To Future Accountants And
Business Decision Makers Whether Or Not They Plan To Become Auditors.
B) The Study Of Auditing Focuses On Learning The Analytical And Logical
Skills Necessary To Evaluate The Relevance And Reliability Of Information.
C) The Study Of Auditing Focuses On Learning The Rules, Techniques, And
Computations Required To Analyze Financial Statements For Making Investment
Recommendations.
D) The Study Of Auditing Begins With The Understanding Of A Coherent
Logical Framework And Techniques Useful For Gathering And Analyzing Evidence
About Others‘ Assertions.
4) The Basic Definition Of Auditing Essentially Indicates That, Overall, Auditing Is A Process
To:
2
, A) Detect Fraud.
B) Examine Individual Transactions So That The Auditor May Certify As To Their
Validity.
C) Objectively Obtain And Evaluate Evidence Regarding Assertions Made By
Another Party.
D) Assure The Consistent Application Of Correct Accounting Procedures.
5) Assurance Services May Improve All Of The Following Except:
A) Relevance.
B) Credibility.
C) Periodicity.
D) Reliability.
6) Evidence Is Reliable If It:
A) Signals The True State Of A Management Assertion.
B) Applies To The Period Being Audited.
C) Relates To The Audit Assertion Being Tested.
D) Is Sufficient To Justify A Conclusion.
7) Which Of The Following Best Describes The Concept Of Audit Risk?
A) The Risk Of The Auditor Being Sued Because Of Association With An
Auditee.
B) The Risk That The Auditor Will Provide An Inappropriate Opinion
On Financial Statements That Are, In Fact, Materially Misstated.
C) The Overall Risk That A Material Misstatement Exists In The Financial
Statements.
D) The Risk That Auditors Use Audit Procedures That Are Inappropriate.
3
, 8) An Auditor Who Accepts An Audit Engagement And Does Not Possess
Expertise With Respect To The Business Entity‘s Industry At That Point, Should:
4
