Test Bank for Auditing & Assurance Services 9th Edition by Timothy Lou
j j j j j j j j j j j
wers, Jerry Strawser j j
Chapj01j9e AnswersjIncluded
1) Thejauditjobjectivejthatjalljtransactionsjandjaccountsjthatjshouldjbejpresentedjinjthejfinancialjsta
tementsjarejinjfactjincludedjisjrelatedjtojwhichjofjthejPCAOBjassertions?
A) Existence
B) Rightsjandjobligations
C) Completeness
D) Valuation
2) Cutoffjtestsjdesignedjtojdetectjpurchasesjmadejbeforejthejendjofjthejyearjthatjhavejbeenjrec
ordedjinjthejsubsequentjyearjprovidejassurancejaboutjmanagement'sjassertionjof
A) presentationjandjdisclosure.
B) completeness.
C) rightsjandjobligations.
D) existence.
3) Duringjanjauditjofjanjentity'sjstockholders'jequityjaccounts,jthejauditorjdeterminesjwhetherjther
ejarejrestrictionsjonjretainedjearningsjresultingjfromjloans,jagreements,jorjstatejlaw.jThisjauditjp
rocedurejmostjlikelyjisjintendedjtojverifyjmanagement'sjassertionjof
A) existencejorjoccurrence.
B) completeness.
C) valuationjorjallocation.
D) presentationjandjdisclosure.
4) Thejconfirmationjofjanjaccountjpayablejbalancejselectedjfromjthejgeneraljledgerjprovidesjpr
imaryjevidencejregardingjwhichjmanagementjassertion?
A) Completeness
B) Valuation
C) Allocation
D) Existence
1
,5) Whatjtypejofjevidencejwouldjprovidejthejhighestjleveljofjassurancejinjanjattestationjen
gagement?
A) Evidencejsecuredjsolelyjfromjwithinjthejentity.
B) Evidencejobtainedjfromjindependentjsources.
C) Evidencejobtainedjindirectly.
D) Evidencejobtainedjfromjmultiplejinternaljinquiries.
6) Whichjofjthejfollowingjmanagementjassertionsjisjanjauditorjmostjlikelyjtestingjifjthejauditjob
jectivejstatesjthatjalljinventoryjonjhandjisjreflectedjinjthejendingjinventoryjbalance?
A) Thejentityjhasjrightsjtojthejinventory.
B) Inventoryjisjproperlyjvalued.
C) Inventoryjisjproperlyjpresentedjinjthejfinancialjstatements.
D) Inventoryjisjcomplete.
7) Anjauditorjtracesjthejserialjnumbersjonjequipmentjtojajnonissuer'sjsubledger.jWhichjofjthejfol
lowingjmanagementjassertionsjisjsupportedjbyjthisjtest?
A) Valuationjandjallocation
B) Completeness
C) Rightsjandjobligations
D) Presentationjandjdisclosure
8) Anjauditorjhasjsubstantialjdoubtjaboutjthejentity'sjabilityjtojcontinuejasjajgoingjconcernjforjajrea
sonablejperiodjofjtimejbecausejofjnegativejcashjflowsjandjworkingjcapitaljdeficiencies.jUnderjt
hesejcircumstances,jthejauditorjwouldjbejmostjconcernedjaboutjthe
A) controljenvironmentjfactorsjthatjaffectjthejorganizationaljstructure.
B) correlationjofjdetectionjriskjandjinherentjrisk.
C) effectivenessjofjthejentity'sjinternaljcontroljactivities.
D) possiblejeffectsjonjthejentity'sjfinancialjstatements.
9) Whichjofjthejfollowingjtypesjofjauditjevidencejprovidesjtheleastjassurancejofjreliability?
A) Receivablejconfirmationsjreceivedjfromjthejclient'sjcustomers.
B) Prenumberedjreceivingjreportsjcompletedjbyjthejclient'sjemployees.
C) Priorjmonths'jbankjstatementsjobtainedjfromjthejclient.
D) Municipaljpropertyjtaxjbillsjpreparedjinjthejclient'sjname.
2
,10) Whichjofjthejfollowingjisjajmanagementjassertionjregardingjaccountjbalancesjatjthejperiodjen
d?
A) Transactionsjandjeventsjthatjhavejbeenjrecordedjhavejoccurredjandjpertainjtojthejen
tity.
B) Transactionsjandjeventsjhavejbeenjrecordedjinjthejproperjaccounts.
C) Thejentityjholdsjorjcontrolsjthejrightsjtojassets,jandjliabilitiesjarejobligationsjofjthejent
ity.
D) Amountsjandjotherjdatajrelatedjtojthejtransactionsjandjeventsjhavejbeenjrecordedjap
propriately.
11) Ajpractitionerjisjengagedjtojexpressjanjopinionjonjmanagement'sjassertionjthatjthejsquarejfoot
agejofjajwarehousejofferedjforjsalejisj150,000jsquarejfeet.jThejpractitionerjshouldjreferjtojwhic
hjofjthejfollowingjsourcesjforjprofessionaljguidance?
A) StatementjofjAuditingjStandards.
B) StatementsjonjStandardsjforjAttestationjEngagements.
C) StatementsjonjStandardsjforjAccountingjandjReviewjServices.
D) StatementsjonjStandardsjforjConsultingjServices.
12) Injauditingjthejlong-
termjdebtjaccount,janjauditor'sjproceduresjmostjlikelyjwouldjfocusjprimarilyjonjmanagem
ent'sjassertionjof
A) existence.
B) completeness.
C) allocation.
D) rightsjandjobligations.
13) Anjauditorjselectedjitemsjforjtestjcountsjfromjthejclient'sjwarehousejduringjthejphysicaljinvent
oryjobservation.jThejauditorjthenjtracedjthesejtestjcountsjintojthejdetailedjinventoryjlistingjthatj
ultimatelyjagreedjtojthejfinancialjstatements.jThisjprocedurejmostjlikelyjprovidedjevidencejcon
cerningjmanagement'sjassertionjof
A) completeness.
B) valuation.
C) presentationjandjdisclosure.
D) existence.
E) rightsjandjobligations.
3
, 14) Anjauditorjselectedjitemsjfromjthejclient'sjdetailedjinventoryjlistingj(thatjagreedjtojthejfinancia
ljstatements).jDuringjthejphysicaljinventoryjobservation,jthejauditorjthenjfoundjeachjitemjselect
edjandjcountedjthejnumberjofjunitsjonjhand.jAssumingjthatjthejamountjonjhandjwasjthejsamejas
jthejamountjinjthejclient'sjdetailedjinventoryjlisting,jthisjprocedurejmostjlikelyjwouldjprovideje
videncejconcerningjmanagement'sjassertionjof
A) completeness.
B) valuation.
C) presentationjandjdisclosure.
D) existence.
E) rightsjandjobligations.
15) AccordingjtojPCAOBjAuditingjStandardjNo.j2201j(jASj2201),jthejauditorjshouldjidentifyjsig
nificantjaccountsjandjdisclosuresjandjtheirjrelevantjassertions.jWhichjofjthejfollowingjfinan
cialjstatementjassertionsjisjnotjexplicitlyjidentifiedjinjASj2201?
A) Completeness
B) Valuationjorjallocation
C) Accuracy
D) Existencejorjoccurrence
E) AlljofjthesejarejassertionsjidentifiedjinjASj2201.
16) Whenjtestingjthejcompletenessjassertionjforjajliabilityjaccount,janjauditorjordinarilyjworksjfr
omjthe
A) financialjstatementsjtojthejpotentiallyjunrecordedjitems.
B) potentiallyjunrecordedjitemsjtojthejfinancialjstatements.
C) accountingjrecordsjtojthejsupportingjevidence.
D) trialjbalancejtojthejsubsidiaryjledger.
17) Ifjanjauditorjisjperformingjproceduresjrelatedjtojthejinformationjthatjisjcontainedjinjthejclient'
sjpensionjfootnote,jhe/shejisjmostjlikelyjtojobtainjevidencejconcerningjmanagement'sjassertio
njabout
A) rightsjandjobligations.
B) existence.
C) valuation.
D) presentationjandjdisclosure.
4
j j j j j j j j j j j
wers, Jerry Strawser j j
Chapj01j9e AnswersjIncluded
1) Thejauditjobjectivejthatjalljtransactionsjandjaccountsjthatjshouldjbejpresentedjinjthejfinancialjsta
tementsjarejinjfactjincludedjisjrelatedjtojwhichjofjthejPCAOBjassertions?
A) Existence
B) Rightsjandjobligations
C) Completeness
D) Valuation
2) Cutoffjtestsjdesignedjtojdetectjpurchasesjmadejbeforejthejendjofjthejyearjthatjhavejbeenjrec
ordedjinjthejsubsequentjyearjprovidejassurancejaboutjmanagement'sjassertionjof
A) presentationjandjdisclosure.
B) completeness.
C) rightsjandjobligations.
D) existence.
3) Duringjanjauditjofjanjentity'sjstockholders'jequityjaccounts,jthejauditorjdeterminesjwhetherjther
ejarejrestrictionsjonjretainedjearningsjresultingjfromjloans,jagreements,jorjstatejlaw.jThisjauditjp
rocedurejmostjlikelyjisjintendedjtojverifyjmanagement'sjassertionjof
A) existencejorjoccurrence.
B) completeness.
C) valuationjorjallocation.
D) presentationjandjdisclosure.
4) Thejconfirmationjofjanjaccountjpayablejbalancejselectedjfromjthejgeneraljledgerjprovidesjpr
imaryjevidencejregardingjwhichjmanagementjassertion?
A) Completeness
B) Valuation
C) Allocation
D) Existence
1
,5) Whatjtypejofjevidencejwouldjprovidejthejhighestjleveljofjassurancejinjanjattestationjen
gagement?
A) Evidencejsecuredjsolelyjfromjwithinjthejentity.
B) Evidencejobtainedjfromjindependentjsources.
C) Evidencejobtainedjindirectly.
D) Evidencejobtainedjfromjmultiplejinternaljinquiries.
6) Whichjofjthejfollowingjmanagementjassertionsjisjanjauditorjmostjlikelyjtestingjifjthejauditjob
jectivejstatesjthatjalljinventoryjonjhandjisjreflectedjinjthejendingjinventoryjbalance?
A) Thejentityjhasjrightsjtojthejinventory.
B) Inventoryjisjproperlyjvalued.
C) Inventoryjisjproperlyjpresentedjinjthejfinancialjstatements.
D) Inventoryjisjcomplete.
7) Anjauditorjtracesjthejserialjnumbersjonjequipmentjtojajnonissuer'sjsubledger.jWhichjofjthejfol
lowingjmanagementjassertionsjisjsupportedjbyjthisjtest?
A) Valuationjandjallocation
B) Completeness
C) Rightsjandjobligations
D) Presentationjandjdisclosure
8) Anjauditorjhasjsubstantialjdoubtjaboutjthejentity'sjabilityjtojcontinuejasjajgoingjconcernjforjajrea
sonablejperiodjofjtimejbecausejofjnegativejcashjflowsjandjworkingjcapitaljdeficiencies.jUnderjt
hesejcircumstances,jthejauditorjwouldjbejmostjconcernedjaboutjthe
A) controljenvironmentjfactorsjthatjaffectjthejorganizationaljstructure.
B) correlationjofjdetectionjriskjandjinherentjrisk.
C) effectivenessjofjthejentity'sjinternaljcontroljactivities.
D) possiblejeffectsjonjthejentity'sjfinancialjstatements.
9) Whichjofjthejfollowingjtypesjofjauditjevidencejprovidesjtheleastjassurancejofjreliability?
A) Receivablejconfirmationsjreceivedjfromjthejclient'sjcustomers.
B) Prenumberedjreceivingjreportsjcompletedjbyjthejclient'sjemployees.
C) Priorjmonths'jbankjstatementsjobtainedjfromjthejclient.
D) Municipaljpropertyjtaxjbillsjpreparedjinjthejclient'sjname.
2
,10) Whichjofjthejfollowingjisjajmanagementjassertionjregardingjaccountjbalancesjatjthejperiodjen
d?
A) Transactionsjandjeventsjthatjhavejbeenjrecordedjhavejoccurredjandjpertainjtojthejen
tity.
B) Transactionsjandjeventsjhavejbeenjrecordedjinjthejproperjaccounts.
C) Thejentityjholdsjorjcontrolsjthejrightsjtojassets,jandjliabilitiesjarejobligationsjofjthejent
ity.
D) Amountsjandjotherjdatajrelatedjtojthejtransactionsjandjeventsjhavejbeenjrecordedjap
propriately.
11) Ajpractitionerjisjengagedjtojexpressjanjopinionjonjmanagement'sjassertionjthatjthejsquarejfoot
agejofjajwarehousejofferedjforjsalejisj150,000jsquarejfeet.jThejpractitionerjshouldjreferjtojwhic
hjofjthejfollowingjsourcesjforjprofessionaljguidance?
A) StatementjofjAuditingjStandards.
B) StatementsjonjStandardsjforjAttestationjEngagements.
C) StatementsjonjStandardsjforjAccountingjandjReviewjServices.
D) StatementsjonjStandardsjforjConsultingjServices.
12) Injauditingjthejlong-
termjdebtjaccount,janjauditor'sjproceduresjmostjlikelyjwouldjfocusjprimarilyjonjmanagem
ent'sjassertionjof
A) existence.
B) completeness.
C) allocation.
D) rightsjandjobligations.
13) Anjauditorjselectedjitemsjforjtestjcountsjfromjthejclient'sjwarehousejduringjthejphysicaljinvent
oryjobservation.jThejauditorjthenjtracedjthesejtestjcountsjintojthejdetailedjinventoryjlistingjthatj
ultimatelyjagreedjtojthejfinancialjstatements.jThisjprocedurejmostjlikelyjprovidedjevidencejcon
cerningjmanagement'sjassertionjof
A) completeness.
B) valuation.
C) presentationjandjdisclosure.
D) existence.
E) rightsjandjobligations.
3
, 14) Anjauditorjselectedjitemsjfromjthejclient'sjdetailedjinventoryjlistingj(thatjagreedjtojthejfinancia
ljstatements).jDuringjthejphysicaljinventoryjobservation,jthejauditorjthenjfoundjeachjitemjselect
edjandjcountedjthejnumberjofjunitsjonjhand.jAssumingjthatjthejamountjonjhandjwasjthejsamejas
jthejamountjinjthejclient'sjdetailedjinventoryjlisting,jthisjprocedurejmostjlikelyjwouldjprovideje
videncejconcerningjmanagement'sjassertionjof
A) completeness.
B) valuation.
C) presentationjandjdisclosure.
D) existence.
E) rightsjandjobligations.
15) AccordingjtojPCAOBjAuditingjStandardjNo.j2201j(jASj2201),jthejauditorjshouldjidentifyjsig
nificantjaccountsjandjdisclosuresjandjtheirjrelevantjassertions.jWhichjofjthejfollowingjfinan
cialjstatementjassertionsjisjnotjexplicitlyjidentifiedjinjASj2201?
A) Completeness
B) Valuationjorjallocation
C) Accuracy
D) Existencejorjoccurrence
E) AlljofjthesejarejassertionsjidentifiedjinjASj2201.
16) Whenjtestingjthejcompletenessjassertionjforjajliabilityjaccount,janjauditorjordinarilyjworksjfr
omjthe
A) financialjstatementsjtojthejpotentiallyjunrecordedjitems.
B) potentiallyjunrecordedjitemsjtojthejfinancialjstatements.
C) accountingjrecordsjtojthejsupportingjevidence.
D) trialjbalancejtojthejsubsidiaryjledger.
17) Ifjanjauditorjisjperformingjproceduresjrelatedjtojthejinformationjthatjisjcontainedjinjthejclient'
sjpensionjfootnote,jhe/shejisjmostjlikelyjtojobtainjevidencejconcerningjmanagement'sjassertio
njabout
A) rightsjandjobligations.
B) existence.
C) valuation.
D) presentationjandjdisclosure.
4
