TEST BANK
Auditing and Assurance Services (an integrated approach)
Chris E. Hogan & Alvin A. Arens
17th edition
PR
O
FD
O
C
1
,Table of Contents
PART 1: THE AUDITING PROFESSION
1. The Demand for Audit and Other Assurance Services
2. The CPA Profession
3. Audit Reports
4. Professional Ethics
5. Legal Liability
PART 2: THE AUDIT PROCESS
6. Audit Responsibilities and Objectives
7. Audit Evidence
8. Audit Planning and Materiality
9. Assessing the Risk of Material Misstatement
10. Assessing and Responding to Fraud Risks
PR
11. Internal Control and COSO Framework
12. Assessing Control Risk and Reporting on Internal Controls
13. Overall Audit Strategy and Audit Program
PART 3: APPLICATION OF THE AUDIT PROCESS TO THE
SALES AND COLLECTION CYCLE
14. Audit of the Sales and Collection Cycle: Tests of Controls and
O
Substantive Tests of Transactions
15. Audit Sampling for Tests of Controls and Substantive Tests of
Transactions
FD
16. Completing the Tests in the Sales and Collection Cycle:
Accounts Receivable
17. Audit Sampling for Tests of Details of Balances
PART 4: APPLICATION OF THE AUDIT PROCESS TO
OTHER CYCLES
O
18. Audit of the Acquisition and Payment Cycle: Tests of Controls,
Substantive Tests of Transactions, and Accounts Payable
19. Completing the Tests in the Acquisition and Payment Cycle:
C
Verification of Selected Accounts
20. Audit of the Payroll and Personnel Cycle
21. Audit of the Inventory and Warehousing Cycle
22. Audit of the Capital Acquisition and Repayment Cycle
23. Audit of Cash and Financial Instruments
PART 5: COMPLETING THE AUDIT
24. Completing the Audit
PART 6: OTHER ASSURANCE AND NONASSURANCE
SERVICES
25. Other Assurance Services
26. Internal and Governmental Financial Auditing and Operational
Auditing
2
,Auditing and Assurance Services, 17e (Arens/Elder/Beasley)
Chapter 1 The Demand for Audit and Other Assurance Services
Learning Objective 1-1
1) The Sarbanes-Oxley Act applies to which of the following companies?
A) All companies
B) Privately held companies
C) Public companies
D) All public companies and privately held companies with assets greater than $500 million
Answer: C
Terms: Sarbanes-Oxley Act
Diff: Easy
Objective: LO 1-1
AACSB: Reflective thinking skills
PR
Topic: SOX
2) Which of the following is considered audit evidence?
A)
Oral statements Written Auditor
made by management Communications Observation
O
Y N N
B)
FD
Oral statements Written Auditor
made by management Communications Observation
N Y Y
C)
O
Oral statements Written Auditor
made by management Communications Observation
Y Y Y
C
D)
Oral statements Written Auditor
made by management Communications Observation
N N Y
Answer: C
Terms: Audit evidence
Diff: Moderate
Objective: LO 1-1
AACSB: Reflective thinking skills
3
, 3) Evidence is paramount to audit and attestation engagements. List the four basic types of audit
evidence.
Answer: The four types of audit and attestation evidence include:
1. Electronic and documentary data about transactions
2. Written and electronic communications with outsiders
3. Observations by the auditor
4. Oral testimony of the auditee (client)
Terms: Basic types of audit evidence
Diff: Easy
Objective: LO 1-1
AACSB: Reflective thinking skills
4) The criteria by which an auditor evaluates the information under audit may vary with the
information being audited.
A) True
PR
B) False
Answer: A
Terms: Criteria which an auditor evaluates information
Diff: Easy
Objective: LO 1-1
AACSB: Reflective thinking skills
O
5) The criteria used by an external auditor to evaluate published financial statements are known
as generally accepted auditing standards.
FD
A) True
B) False
Answer: B
Terms: Criteria used by external auditor to evaluate published financial statements
Diff: Easy
Objective: LO 1-1
O
AACSB: Reflective thinking skills
6) The Sarbanes-Oxley Act establishes standards related to the audits of privately held
C
companies.
A) True
B) False
Answer: B
Terms: Sarbanes-Oxley Act
Diff: Easy
Objective: LO 1-1
AACSB: Reflective thinking skills
Topic: SOX
4
Auditing and Assurance Services (an integrated approach)
Chris E. Hogan & Alvin A. Arens
17th edition
PR
O
FD
O
C
1
,Table of Contents
PART 1: THE AUDITING PROFESSION
1. The Demand for Audit and Other Assurance Services
2. The CPA Profession
3. Audit Reports
4. Professional Ethics
5. Legal Liability
PART 2: THE AUDIT PROCESS
6. Audit Responsibilities and Objectives
7. Audit Evidence
8. Audit Planning and Materiality
9. Assessing the Risk of Material Misstatement
10. Assessing and Responding to Fraud Risks
PR
11. Internal Control and COSO Framework
12. Assessing Control Risk and Reporting on Internal Controls
13. Overall Audit Strategy and Audit Program
PART 3: APPLICATION OF THE AUDIT PROCESS TO THE
SALES AND COLLECTION CYCLE
14. Audit of the Sales and Collection Cycle: Tests of Controls and
O
Substantive Tests of Transactions
15. Audit Sampling for Tests of Controls and Substantive Tests of
Transactions
FD
16. Completing the Tests in the Sales and Collection Cycle:
Accounts Receivable
17. Audit Sampling for Tests of Details of Balances
PART 4: APPLICATION OF THE AUDIT PROCESS TO
OTHER CYCLES
O
18. Audit of the Acquisition and Payment Cycle: Tests of Controls,
Substantive Tests of Transactions, and Accounts Payable
19. Completing the Tests in the Acquisition and Payment Cycle:
C
Verification of Selected Accounts
20. Audit of the Payroll and Personnel Cycle
21. Audit of the Inventory and Warehousing Cycle
22. Audit of the Capital Acquisition and Repayment Cycle
23. Audit of Cash and Financial Instruments
PART 5: COMPLETING THE AUDIT
24. Completing the Audit
PART 6: OTHER ASSURANCE AND NONASSURANCE
SERVICES
25. Other Assurance Services
26. Internal and Governmental Financial Auditing and Operational
Auditing
2
,Auditing and Assurance Services, 17e (Arens/Elder/Beasley)
Chapter 1 The Demand for Audit and Other Assurance Services
Learning Objective 1-1
1) The Sarbanes-Oxley Act applies to which of the following companies?
A) All companies
B) Privately held companies
C) Public companies
D) All public companies and privately held companies with assets greater than $500 million
Answer: C
Terms: Sarbanes-Oxley Act
Diff: Easy
Objective: LO 1-1
AACSB: Reflective thinking skills
PR
Topic: SOX
2) Which of the following is considered audit evidence?
A)
Oral statements Written Auditor
made by management Communications Observation
O
Y N N
B)
FD
Oral statements Written Auditor
made by management Communications Observation
N Y Y
C)
O
Oral statements Written Auditor
made by management Communications Observation
Y Y Y
C
D)
Oral statements Written Auditor
made by management Communications Observation
N N Y
Answer: C
Terms: Audit evidence
Diff: Moderate
Objective: LO 1-1
AACSB: Reflective thinking skills
3
, 3) Evidence is paramount to audit and attestation engagements. List the four basic types of audit
evidence.
Answer: The four types of audit and attestation evidence include:
1. Electronic and documentary data about transactions
2. Written and electronic communications with outsiders
3. Observations by the auditor
4. Oral testimony of the auditee (client)
Terms: Basic types of audit evidence
Diff: Easy
Objective: LO 1-1
AACSB: Reflective thinking skills
4) The criteria by which an auditor evaluates the information under audit may vary with the
information being audited.
A) True
PR
B) False
Answer: A
Terms: Criteria which an auditor evaluates information
Diff: Easy
Objective: LO 1-1
AACSB: Reflective thinking skills
O
5) The criteria used by an external auditor to evaluate published financial statements are known
as generally accepted auditing standards.
FD
A) True
B) False
Answer: B
Terms: Criteria used by external auditor to evaluate published financial statements
Diff: Easy
Objective: LO 1-1
O
AACSB: Reflective thinking skills
6) The Sarbanes-Oxley Act establishes standards related to the audits of privately held
C
companies.
A) True
B) False
Answer: B
Terms: Sarbanes-Oxley Act
Diff: Easy
Objective: LO 1-1
AACSB: Reflective thinking skills
Topic: SOX
4
