Test Bank for Auditing & Assurance Services 9th Edition by Timothy Lo
g g g g g g g g g g g
uwers, Jerry Strawser g g
Chapg01g9e AnswersgIncluded
1) Thegauditgobjectivegthatgallgtransactionsgandgaccountsgthatgshouldgbegpresentedgingthegfinanci
algstatementsgaregingfactgincludedgisgrelatedgtogwhichgofgthegPCAOBgassertions?
A) Existence
B) Rightsgandgobligations
C) Completeness
D) Valuation
2) Cutoffgtestsgdesignedgtogdetectgpurchasesgmadegbeforegthegendgofgthegyeargthatghavegbee
ngrecordedgingthegsubsequentgyeargprovidegassurancegaboutgmanagement'sgassertiongof
A) presentationgandgdisclosure.
B) completeness.
C) rightsgandgobligations.
D) existence.
3) Duringgangauditgofgangentity'sgstockholders'gequitygaccounts,gthegauditorgdeterminesgwhether
gtheregaregrestrictionsgongretainedgearningsgresultinggfromgloans,gagreements,gorgstateglaw.gTh
isgauditgproceduregmostglikelygisgintendedgtogverifygmanagement'sgassertiongof
A) existencegorgoccurrence.
B) completeness.
C) valuationgorgallocation.
D) presentationgandgdisclosure.
4) Thegconfirmationgofgangaccountgpayablegbalancegselectedgfromgtheggeneralgledgergprovide
sgprimarygevidencegregardinggwhichgmanagementgassertion?
A) Completeness
B) Valuation
C) Allocation
D) Existence
1
,5) Whatgtypegofgevidencegwouldgprovidegtheghighestglevelgofgassurancegingangattestatio
ngengagement?
A) Evidencegsecuredgsolelygfromgwithingthegentity.
B) Evidencegobtainedgfromgindependentgsources.
C) Evidencegobtainedgindirectly.
D) Evidencegobtainedgfromgmultipleginternalginquiries.
6) Whichgofgthegfollowinggmanagementgassertionsgisgangauditorgmostglikelygtestinggifgthegaud
itgobjectivegstatesgthatgallginventorygonghandgisgreflectedgingthegendingginventorygbalance?
A) Thegentityghasgrightsgtogtheginventory.
B) Inventorygisgproperlygvalued.
C) Inventorygisgproperlygpresentedgingthegfinancialgstatements.
D) Inventorygisgcomplete.
7) Angauditorgtracesgthegserialgnumbersgongequipmentgtogagnonissuer'sgsubledger.gWhichgofgth
egfollowinggmanagementgassertionsgisgsupportedgbygthisgtest?
A) Valuationgandgallocation
B) Completeness
C) Rightsgandgobligations
D) Presentationgandgdisclosure
8) Angauditorghasgsubstantialgdoubtgaboutgthegentity'sgabilitygtogcontinuegasgaggoinggconcerngfor
a reasonablegperiodgofgtimegbecausegofgnegativegcashgflowsgandgworkinggcapitalgdeficiencie
g g
s.gUndergthesegcircumstances,gthegauditorgwouldgbegmostgconcernedgaboutgthe
A) controlgenvironmentgfactorsgthatgaffectgthegorganizationalgstructure.
B) correlationgofgdetectiongriskgandginherentgrisk.
C) effectivenessgofgthegentity'sginternalgcontrolgactivities.
D) possiblegeffectsgongthegentity'sgfinancialgstatements.
9) Whichgofgthegfollowinggtypesgofgauditgevidencegprovidesgtheleastgassurancegofgreliability?
A) Receivablegconfirmationsgreceivedgfromgthegclient'sgcustomers.
B) Prenumberedgreceivinggreportsgcompletedgbygthegclient'sgemployees.
C) Priorgmonths'gbankgstatementsgobtainedgfromgthegclient.
D) Municipalgpropertygtaxgbillsgpreparedgingthegclient'sgname.
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,10) Whichgofgthegfollowinggisgagmanagementgassertiongregardinggaccountgbalancesgatgthegperio
dgend?
A) Transactionsgandgeventsgthatghavegbeengrecordedghavegoccurredgandgpertaingtogth
egentity.
B) Transactionsgandgeventsghavegbeengrecordedgingthegpropergaccounts.
C) Thegentitygholdsgorgcontrolsgthegrightsgtogassets,gandgliabilitiesgaregobligationsgofgth
egentity.
D) Amountsgandgothergdatagrelatedgtogthegtransactionsgandgeventsghavegbeengrecorde
dgappropriately.
11) Agpractitionergisgengagedgtogexpressgangopiniongongmanagement'sgassertiongthatgthegsquare
gfootagegofgagwarehousegofferedgforgsalegisg150,000gsquaregfeet.gThegpractitionergshouldgref
ergtogwhichgofgthegfollowinggsourcesgforgprofessionalgguidance?
A) StatementgofgAuditinggStandards.
B) StatementsgongStandardsgforgAttestationgEngagements.
C) StatementsgongStandardsgforgAccountinggandgReviewgServices.
D) StatementsgongStandardsgforgConsultinggServices.
12) Ingauditinggtheglong-
termgdebtgaccount,gangauditor'sgproceduresgmostglikelygwouldgfocusgprimarilygongmana
gement'sgassertiongof
A) existence.
B) completeness.
C) allocation.
D) rightsgandgobligations.
13) Angauditorgselectedgitemsgforgtestgcountsgfromgthegclient'sgwarehousegduringgthegphysicalgin
ventorygobservation.gThegauditorgthengtracedgthesegtestgcountsgintogthegdetailedginventoryglis
tinggthatgultimatelygagreedgtogthegfinancialgstatements.gThisgproceduregmostglikelygprovidedg
evidencegconcerninggmanagement'sgassertiongof
A) completeness.
B) valuation.
C) presentationgandgdisclosure.
D) existence.
E) rightsgandgobligations.
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, 14) Angauditorgselectedgitemsgfromgthegclient'sgdetailedginventoryglistingg(thatgagreedgtogthegfina
ncialgstatements).gDuringgthegphysicalginventorygobservation,gthegauditorgthengfoundgeachgite
mgselectedgandgcountedgthegnumbergofgunitsgonghand.gAssuminggthatgthegamountgonghandgw
asgthegsamegasgthegamountgingthegclient'sgdetailedginventoryglisting,gthisgproceduregmostglike
lygwouldgprovidegevidencegconcerninggmanagement'sgassertiongof
A) completeness.
B) valuation.
C) presentationgandgdisclosure.
D) existence.
E) rightsgandgobligations.
15) AccordinggtogPCAOBgAuditinggStandardgNo.g2201g(gASg2201),gthegauditorgshouldgidentif
ygsignificantgaccountsgandgdisclosuresgandgtheirgrelevantgassertions.gWhichgofgthegfollowi
nggfinancialgstatementgassertionsgisgnotgexplicitlygidentifiedgingASg2201?
A) Completeness
B) Valuationgorgallocation
C) Accuracy
D) Existencegorgoccurrence
E) AllgofgthesegaregassertionsgidentifiedgingASg2201.
16) Whengtestinggthegcompletenessgassertiongforgagliabilitygaccount,gangauditorgordinarilygwork
sgfromgthe
A) financialgstatementsgtogthegpotentiallygunrecordedgitems.
B) potentiallygunrecordedgitemsgtogthegfinancialgstatements.
C) accountinggrecordsgtogthegsupportinggevidence.
D) trialgbalancegtogthegsubsidiarygledger.
17) Ifgangauditorgisgperforminggproceduresgrelatedgtogtheginformationgthatgisgcontainedgingthegcl
ient'sgpensiongfootnote,ghe/shegisgmostglikelygtogobtaingevidencegconcerninggmanagement'sg
assertiongabout
A) rightsgandgobligations.
B) existence.
C) valuation.
D) presentationgandgdisclosure.
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g g g g g g g g g g g
uwers, Jerry Strawser g g
Chapg01g9e AnswersgIncluded
1) Thegauditgobjectivegthatgallgtransactionsgandgaccountsgthatgshouldgbegpresentedgingthegfinanci
algstatementsgaregingfactgincludedgisgrelatedgtogwhichgofgthegPCAOBgassertions?
A) Existence
B) Rightsgandgobligations
C) Completeness
D) Valuation
2) Cutoffgtestsgdesignedgtogdetectgpurchasesgmadegbeforegthegendgofgthegyeargthatghavegbee
ngrecordedgingthegsubsequentgyeargprovidegassurancegaboutgmanagement'sgassertiongof
A) presentationgandgdisclosure.
B) completeness.
C) rightsgandgobligations.
D) existence.
3) Duringgangauditgofgangentity'sgstockholders'gequitygaccounts,gthegauditorgdeterminesgwhether
gtheregaregrestrictionsgongretainedgearningsgresultinggfromgloans,gagreements,gorgstateglaw.gTh
isgauditgproceduregmostglikelygisgintendedgtogverifygmanagement'sgassertiongof
A) existencegorgoccurrence.
B) completeness.
C) valuationgorgallocation.
D) presentationgandgdisclosure.
4) Thegconfirmationgofgangaccountgpayablegbalancegselectedgfromgtheggeneralgledgergprovide
sgprimarygevidencegregardinggwhichgmanagementgassertion?
A) Completeness
B) Valuation
C) Allocation
D) Existence
1
,5) Whatgtypegofgevidencegwouldgprovidegtheghighestglevelgofgassurancegingangattestatio
ngengagement?
A) Evidencegsecuredgsolelygfromgwithingthegentity.
B) Evidencegobtainedgfromgindependentgsources.
C) Evidencegobtainedgindirectly.
D) Evidencegobtainedgfromgmultipleginternalginquiries.
6) Whichgofgthegfollowinggmanagementgassertionsgisgangauditorgmostglikelygtestinggifgthegaud
itgobjectivegstatesgthatgallginventorygonghandgisgreflectedgingthegendingginventorygbalance?
A) Thegentityghasgrightsgtogtheginventory.
B) Inventorygisgproperlygvalued.
C) Inventorygisgproperlygpresentedgingthegfinancialgstatements.
D) Inventorygisgcomplete.
7) Angauditorgtracesgthegserialgnumbersgongequipmentgtogagnonissuer'sgsubledger.gWhichgofgth
egfollowinggmanagementgassertionsgisgsupportedgbygthisgtest?
A) Valuationgandgallocation
B) Completeness
C) Rightsgandgobligations
D) Presentationgandgdisclosure
8) Angauditorghasgsubstantialgdoubtgaboutgthegentity'sgabilitygtogcontinuegasgaggoinggconcerngfor
a reasonablegperiodgofgtimegbecausegofgnegativegcashgflowsgandgworkinggcapitalgdeficiencie
g g
s.gUndergthesegcircumstances,gthegauditorgwouldgbegmostgconcernedgaboutgthe
A) controlgenvironmentgfactorsgthatgaffectgthegorganizationalgstructure.
B) correlationgofgdetectiongriskgandginherentgrisk.
C) effectivenessgofgthegentity'sginternalgcontrolgactivities.
D) possiblegeffectsgongthegentity'sgfinancialgstatements.
9) Whichgofgthegfollowinggtypesgofgauditgevidencegprovidesgtheleastgassurancegofgreliability?
A) Receivablegconfirmationsgreceivedgfromgthegclient'sgcustomers.
B) Prenumberedgreceivinggreportsgcompletedgbygthegclient'sgemployees.
C) Priorgmonths'gbankgstatementsgobtainedgfromgthegclient.
D) Municipalgpropertygtaxgbillsgpreparedgingthegclient'sgname.
2
,10) Whichgofgthegfollowinggisgagmanagementgassertiongregardinggaccountgbalancesgatgthegperio
dgend?
A) Transactionsgandgeventsgthatghavegbeengrecordedghavegoccurredgandgpertaingtogth
egentity.
B) Transactionsgandgeventsghavegbeengrecordedgingthegpropergaccounts.
C) Thegentitygholdsgorgcontrolsgthegrightsgtogassets,gandgliabilitiesgaregobligationsgofgth
egentity.
D) Amountsgandgothergdatagrelatedgtogthegtransactionsgandgeventsghavegbeengrecorde
dgappropriately.
11) Agpractitionergisgengagedgtogexpressgangopiniongongmanagement'sgassertiongthatgthegsquare
gfootagegofgagwarehousegofferedgforgsalegisg150,000gsquaregfeet.gThegpractitionergshouldgref
ergtogwhichgofgthegfollowinggsourcesgforgprofessionalgguidance?
A) StatementgofgAuditinggStandards.
B) StatementsgongStandardsgforgAttestationgEngagements.
C) StatementsgongStandardsgforgAccountinggandgReviewgServices.
D) StatementsgongStandardsgforgConsultinggServices.
12) Ingauditinggtheglong-
termgdebtgaccount,gangauditor'sgproceduresgmostglikelygwouldgfocusgprimarilygongmana
gement'sgassertiongof
A) existence.
B) completeness.
C) allocation.
D) rightsgandgobligations.
13) Angauditorgselectedgitemsgforgtestgcountsgfromgthegclient'sgwarehousegduringgthegphysicalgin
ventorygobservation.gThegauditorgthengtracedgthesegtestgcountsgintogthegdetailedginventoryglis
tinggthatgultimatelygagreedgtogthegfinancialgstatements.gThisgproceduregmostglikelygprovidedg
evidencegconcerninggmanagement'sgassertiongof
A) completeness.
B) valuation.
C) presentationgandgdisclosure.
D) existence.
E) rightsgandgobligations.
3
, 14) Angauditorgselectedgitemsgfromgthegclient'sgdetailedginventoryglistingg(thatgagreedgtogthegfina
ncialgstatements).gDuringgthegphysicalginventorygobservation,gthegauditorgthengfoundgeachgite
mgselectedgandgcountedgthegnumbergofgunitsgonghand.gAssuminggthatgthegamountgonghandgw
asgthegsamegasgthegamountgingthegclient'sgdetailedginventoryglisting,gthisgproceduregmostglike
lygwouldgprovidegevidencegconcerninggmanagement'sgassertiongof
A) completeness.
B) valuation.
C) presentationgandgdisclosure.
D) existence.
E) rightsgandgobligations.
15) AccordinggtogPCAOBgAuditinggStandardgNo.g2201g(gASg2201),gthegauditorgshouldgidentif
ygsignificantgaccountsgandgdisclosuresgandgtheirgrelevantgassertions.gWhichgofgthegfollowi
nggfinancialgstatementgassertionsgisgnotgexplicitlygidentifiedgingASg2201?
A) Completeness
B) Valuationgorgallocation
C) Accuracy
D) Existencegorgoccurrence
E) AllgofgthesegaregassertionsgidentifiedgingASg2201.
16) Whengtestinggthegcompletenessgassertiongforgagliabilitygaccount,gangauditorgordinarilygwork
sgfromgthe
A) financialgstatementsgtogthegpotentiallygunrecordedgitems.
B) potentiallygunrecordedgitemsgtogthegfinancialgstatements.
C) accountinggrecordsgtogthegsupportinggevidence.
D) trialgbalancegtogthegsubsidiarygledger.
17) Ifgangauditorgisgperforminggproceduresgrelatedgtogtheginformationgthatgisgcontainedgingthegcl
ient'sgpensiongfootnote,ghe/shegisgmostglikelygtogobtaingevidencegconcerninggmanagement'sg
assertiongabout
A) rightsgandgobligations.
B) existence.
C) valuation.
D) presentationgandgdisclosure.
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