Test Bank for Auditing & Assurance Services 9th Edition by Timothy
g g g g g g g g g g g
Louwers, Jerry Strawser g g
Chap 01 9eg
g g AnswersgIncludedg
1) Thegauditgobjectivegthatgallgtransactionsgandgaccountsgthatgshouldgbegpresentedgingthegfinancialgs
tatementsgaregingfactgincludedgisgrelatedgtogwhichgofgthegPCAOBgassertions?g
A) Existenceg
B) Rightsgandgobligationsg
C) Completenessg
D) Valuationg
g
g
2) Cutoffgtestsgdesignedgtogdetectgpurchasesgmadegbeforegthegendgofgthegyeargthatghavegbeengrecord
edgingthegsubsequentgyeargprovidegassurancegaboutgmanagement'sgassertiongofgA)gpresentationgan
dgdisclosure.g
B) completeness.g
C) rightsgandgobligations.g
D) existence.g
g
g
3) Duringgangauditgofgangentity'sgstockholders'gequitygaccounts,gthegauditorgdeterminesgwhethergther
egaregrestrictionsgongretainedgearningsgresultinggfromgloans,gagreements,gorgstateglaw.gThisgauditg
proceduregmostglikelygisgintendedgtogverifygmanagement'sgassertiongofgA)gexistencegorgoccurrenc
e.g
B) completeness.g
C) valuationgorgallocation.g
D) presentationgandgdisclosure.g
g
g
4) Thegconfirmationgofgangaccountgpayablegbalancegselectedgfromgtheggeneralgledgergprovidesgprim
arygevidencegregardinggwhichgmanagementgassertion?g
A) Completenessg
B) Valuationg
C) Allocationg
D) Existenceg
g
g
5) Whatgtypegofgevidencegwouldgprovidegtheghighestglevelgofgassurancegingangattestationgengageme
nt?g
A) Evidencegsecuredgsolelygfromgwithingthegentity.g
B) Evidencegobtainedgfromgindependentgsources.g
C) Evidencegobtainedgindirectly.g
D) Evidencegobtainedgfromgmultipleginternalginquiries.g
g g g g g g g g g g g 1g
,g
g
6) Whichgofgthegfollowinggmanagementgassertionsgisgangauditorgmostglikelygtestinggifgthegauditgo
bjectivegstatesgthatgallginventorygonghandgisgreflectedgingthegendingginventorygbalance?gA)gTheg
entityghasgrightsgtogtheginventory.g
B) Inventorygisgproperlygvalued.g
C) Inventorygisgproperlygpresentedgingthegfinancialgstatements.g
D) Inventorygisgcomplete.g
g
g
7) Angauditorgtracesgthegserialgnumbersgongequipmentgtogagnonissuer'sgsubledger.gWhichgofgthegf
ollowinggmanagementgassertionsgisgsupportedgbygthisgtest?g
A) Valuationgandgallocationg
B) Completenessg
C) Rightsgandgobligationsg
D) Presentationgandgdisclosureg
g
g
8) Angauditorghasgsubstantialgdoubtgaboutgthegentity'sgabilitygtogcontinuegasgaggoinggconcerngforg
agreasonablegperiodgofgtimegbecausegofgnegativegcashgflowsgandgworkinggcapitalgdeficiencies.g
Undergthesegcircumstances,gthegauditorgwouldgbegmostgconcernedgaboutgtheg
A)gcontrolgenvironmentgfactorsgthatgaffectgthegorganizationalgstructure.g
B) correlationgofgdetectiongriskgandginherentgrisk.g
C) effectivenessgofgthegentity'sginternalgcontrolgactivities.g
D) possiblegeffectsgongthegentity'sgfinancialgstatements.g
g
g
9) Whichgofgthegfollowinggtypesgofgauditgevidencegprovidesgtheleastgassurancegofgreliability?gA)g
Receivablegconfirmationsgreceivedgfromgthegclient'sgcustomers.g
B) Prenumberedgreceivinggreportsgcompletedgbygthegclient'sgemployees.g
C) Priorgmonths'gbankgstatementsgobtainedgfromgthegclient.g
D) Municipalgpropertygtaxgbillsgpreparedgingthegclient'sgname.g
g
g
10) Whichgofgthegfollowinggisgagmanagementgassertiongregardinggaccountgbalancesgatgthegperiodge
nd?g
A) Transactionsgandgeventsgthatghavegbeengrecordedghavegoccurredgandgpertaingtogthegentity.
g
B) Transactionsgandgeventsghavegbeengrecordedgingthegpropergaccounts.g
C) Thegentitygholdsgorgcontrolsgthegrightsgtogassets,gandgliabilitiesgaregobligationsgofgthegenti
ty.g
D) Amountsgandgothergdatagrelatedgtogthegtransactionsgandgeventsghavegbeengrecordedgappro
priately.g
g
g
g g g g g g g g g g g 2g
,11) Agpractitionergisgengagedgtogexpressgangopiniongongmanagement'sgassertiongthatgthegsquaregfo
otagegofgagwarehousegofferedgforgsalegisg150,000gsquaregfeet.gThegpractitionergshouldgrefergtog
whichgofgthegfollowinggsourcesgforgprofessionalgguidance?gA)gStatementgofgAuditinggStandard
s.g
B) StatementsgongStandardsgforgAttestationgEngagements.g
C) StatementsgongStandardsgforgAccountinggandgReviewgServices.g
D) StatementsgongStandardsgforgConsultinggServices.g
g
g
12) Ingauditinggtheglong-
termgdebtgaccount,gangauditor'sgproceduresgmostglikelygwouldgfocusgprimarilygongmanagement
'sgassertiongofgA)gexistence.g
B) completeness.g
C) allocation.g
D) rightsgandgobligations.g
g
g
13) Angauditorgselectedgitemsgforgtestgcountsgfromgthegclient'sgwarehousegduringgthegphysicalginve
ntorygobservation.gThegauditorgthengtracedgthesegtestgcountsgintogthegdetailedginventoryglistingg
thatgultimatelygagreedgtogthegfinancialgstatements.gThisgproceduregmostglikelygprovidedgeviden
cegconcerninggmanagement'sgassertiongofgA)gcompleteness.g
B) valuation.g
C) presentationgandgdisclosure.g
D) existence.g
E) rightsgandgobligations.g
g
g
14) Angauditorgselectedgitemsgfromgthegclient'sgdetailedginventoryglistingg(thatgagreedgtogthegfinanc
ialgstatements).gDuringgthegphysicalginventorygobservation,gthegauditorgthengfoundgeachgitemgs
electedgandgcountedgthegnumbergofgunitsgonghand.gAssuminggthatgthegamountgonghandgwasgthe
gsamegasgthegamountgingthegclient'sgdetailedginventoryglisting,gthisgproceduregmostglikelygwoul
dgprovidegevidencegconcerninggmanagement'sgassertiongofgA)gcompleteness.g
B) valuation.g
C) presentationgandgdisclosure.g
D) existence.g
E) rightsgandgobligations.g
g
g
15) AccordinggtogPCAOBgAuditinggStandardgNo.g2201g(gASg2201),gthegauditorgshouldgidentifygsi
gnificantgaccountsgandgdisclosuresgandgtheirgrelevantgassertions.gWhichgofgthegfollowinggfinan
cialgstatementgassertionsgisgnotgexplicitlygidentifiedgingASg2201?gA)gCompletenessg
B) Valuationgorgallocationg
C) Accuracyg
g g g g g g g g g g g 3g
, D) Existencegorgoccurrenceg
E) AllgofgthesegaregassertionsgidentifiedgingASg2201.g
g
g
16) Whengtestinggthegcompletenessgassertiongforgagliabilitygaccount,gangauditorgordinarilygworksgfr
omgtheg
A) financialgstatementsgtogthegpotentiallygunrecordedgitems.g
B) potentiallygunrecordedgitemsgtogthegfinancialgstatements.g
C) accountinggrecordsgtogthegsupportinggevidence.g
D) trialgbalancegtogthegsubsidiarygledger.g
g
g
17) Ifgangauditorgisgperforminggproceduresgrelatedgtogtheginformationgthatgisgcontainedgingthegclien
t'sgpensiongfootnote,ghe/shegisgmostglikelygtogobtaingevidencegconcerninggmanagement'sgasserti
ongaboutg
A) rightsgandgobligations.g
B) existence.gC)gvaluation.g
D)gpresentationgandgdisclosure.g
g
g
18) Whichgofgthegfollowinggquestionsgwouldgbeinappropriategforgangauditorgtogaskgagclientgwhen
gexhibitinggangappropriateglevelgofgprofessionalgskepticismgwhilegcompletinggangauditgprocedu
regrelatedgtogtheginternalgcontrolgsystem?gA)gWhatgcanggogwronggingthisgprocess?g
B) Whichgofgyourgemployeesgisgagfraudster?g
C) Whatgelsegisgimportantgtogknowgaboutgthisgprocess?g
D) Whatghappensgwhengagkeygemployeeggoesgongvacation?g
g
g
19) Togbegproficientgasgangauditor,gagpersongmustgfirstgbegablegtogaccomplishgwhichgofgthesegtasksg
ingagdecision-makinggprocess?g
A) Identifygauditgevidencegrelevantgtogthegverificationgofgassertionsgmanagementgmakesgingit
sgunauditedgfinancialgstatementsgandgnotes.g
B) Formulategevidence-
gatheringgproceduresg(auditgplan)gdesignedgtogobtaingsufficient,gcompetentgevidencegabo
utgassertionsgmanagementgmakesgingfinancialgstatementsgandgnotes.g
C) Recognizegthegfinancialgassertionsgmadegingmanagement'sgfinancialgstatementsgandgfootn
otes.g
D) Evaluategthegevidencegproducedgbygthegperformancegofgproceduresgandgdecidegwhetherg
management'sgassertionsgconformgtoggenerallygacceptedgaccountinggprinciplesgandgrealit
y.g
g
g
20) Whichgofgthegfollowinggisgangunderlyinggconditiongthatgingpartgcreatesgthegdemandgbygusersgfo
rgreliableginformation?g
A) Economicgtransactionsgthatgaregnumerousgandgcomplex.g
g g g g g g g g g g g 4g
g g g g g g g g g g g
Louwers, Jerry Strawser g g
Chap 01 9eg
g g AnswersgIncludedg
1) Thegauditgobjectivegthatgallgtransactionsgandgaccountsgthatgshouldgbegpresentedgingthegfinancialgs
tatementsgaregingfactgincludedgisgrelatedgtogwhichgofgthegPCAOBgassertions?g
A) Existenceg
B) Rightsgandgobligationsg
C) Completenessg
D) Valuationg
g
g
2) Cutoffgtestsgdesignedgtogdetectgpurchasesgmadegbeforegthegendgofgthegyeargthatghavegbeengrecord
edgingthegsubsequentgyeargprovidegassurancegaboutgmanagement'sgassertiongofgA)gpresentationgan
dgdisclosure.g
B) completeness.g
C) rightsgandgobligations.g
D) existence.g
g
g
3) Duringgangauditgofgangentity'sgstockholders'gequitygaccounts,gthegauditorgdeterminesgwhethergther
egaregrestrictionsgongretainedgearningsgresultinggfromgloans,gagreements,gorgstateglaw.gThisgauditg
proceduregmostglikelygisgintendedgtogverifygmanagement'sgassertiongofgA)gexistencegorgoccurrenc
e.g
B) completeness.g
C) valuationgorgallocation.g
D) presentationgandgdisclosure.g
g
g
4) Thegconfirmationgofgangaccountgpayablegbalancegselectedgfromgtheggeneralgledgergprovidesgprim
arygevidencegregardinggwhichgmanagementgassertion?g
A) Completenessg
B) Valuationg
C) Allocationg
D) Existenceg
g
g
5) Whatgtypegofgevidencegwouldgprovidegtheghighestglevelgofgassurancegingangattestationgengageme
nt?g
A) Evidencegsecuredgsolelygfromgwithingthegentity.g
B) Evidencegobtainedgfromgindependentgsources.g
C) Evidencegobtainedgindirectly.g
D) Evidencegobtainedgfromgmultipleginternalginquiries.g
g g g g g g g g g g g 1g
,g
g
6) Whichgofgthegfollowinggmanagementgassertionsgisgangauditorgmostglikelygtestinggifgthegauditgo
bjectivegstatesgthatgallginventorygonghandgisgreflectedgingthegendingginventorygbalance?gA)gTheg
entityghasgrightsgtogtheginventory.g
B) Inventorygisgproperlygvalued.g
C) Inventorygisgproperlygpresentedgingthegfinancialgstatements.g
D) Inventorygisgcomplete.g
g
g
7) Angauditorgtracesgthegserialgnumbersgongequipmentgtogagnonissuer'sgsubledger.gWhichgofgthegf
ollowinggmanagementgassertionsgisgsupportedgbygthisgtest?g
A) Valuationgandgallocationg
B) Completenessg
C) Rightsgandgobligationsg
D) Presentationgandgdisclosureg
g
g
8) Angauditorghasgsubstantialgdoubtgaboutgthegentity'sgabilitygtogcontinuegasgaggoinggconcerngforg
agreasonablegperiodgofgtimegbecausegofgnegativegcashgflowsgandgworkinggcapitalgdeficiencies.g
Undergthesegcircumstances,gthegauditorgwouldgbegmostgconcernedgaboutgtheg
A)gcontrolgenvironmentgfactorsgthatgaffectgthegorganizationalgstructure.g
B) correlationgofgdetectiongriskgandginherentgrisk.g
C) effectivenessgofgthegentity'sginternalgcontrolgactivities.g
D) possiblegeffectsgongthegentity'sgfinancialgstatements.g
g
g
9) Whichgofgthegfollowinggtypesgofgauditgevidencegprovidesgtheleastgassurancegofgreliability?gA)g
Receivablegconfirmationsgreceivedgfromgthegclient'sgcustomers.g
B) Prenumberedgreceivinggreportsgcompletedgbygthegclient'sgemployees.g
C) Priorgmonths'gbankgstatementsgobtainedgfromgthegclient.g
D) Municipalgpropertygtaxgbillsgpreparedgingthegclient'sgname.g
g
g
10) Whichgofgthegfollowinggisgagmanagementgassertiongregardinggaccountgbalancesgatgthegperiodge
nd?g
A) Transactionsgandgeventsgthatghavegbeengrecordedghavegoccurredgandgpertaingtogthegentity.
g
B) Transactionsgandgeventsghavegbeengrecordedgingthegpropergaccounts.g
C) Thegentitygholdsgorgcontrolsgthegrightsgtogassets,gandgliabilitiesgaregobligationsgofgthegenti
ty.g
D) Amountsgandgothergdatagrelatedgtogthegtransactionsgandgeventsghavegbeengrecordedgappro
priately.g
g
g
g g g g g g g g g g g 2g
,11) Agpractitionergisgengagedgtogexpressgangopiniongongmanagement'sgassertiongthatgthegsquaregfo
otagegofgagwarehousegofferedgforgsalegisg150,000gsquaregfeet.gThegpractitionergshouldgrefergtog
whichgofgthegfollowinggsourcesgforgprofessionalgguidance?gA)gStatementgofgAuditinggStandard
s.g
B) StatementsgongStandardsgforgAttestationgEngagements.g
C) StatementsgongStandardsgforgAccountinggandgReviewgServices.g
D) StatementsgongStandardsgforgConsultinggServices.g
g
g
12) Ingauditinggtheglong-
termgdebtgaccount,gangauditor'sgproceduresgmostglikelygwouldgfocusgprimarilygongmanagement
'sgassertiongofgA)gexistence.g
B) completeness.g
C) allocation.g
D) rightsgandgobligations.g
g
g
13) Angauditorgselectedgitemsgforgtestgcountsgfromgthegclient'sgwarehousegduringgthegphysicalginve
ntorygobservation.gThegauditorgthengtracedgthesegtestgcountsgintogthegdetailedginventoryglistingg
thatgultimatelygagreedgtogthegfinancialgstatements.gThisgproceduregmostglikelygprovidedgeviden
cegconcerninggmanagement'sgassertiongofgA)gcompleteness.g
B) valuation.g
C) presentationgandgdisclosure.g
D) existence.g
E) rightsgandgobligations.g
g
g
14) Angauditorgselectedgitemsgfromgthegclient'sgdetailedginventoryglistingg(thatgagreedgtogthegfinanc
ialgstatements).gDuringgthegphysicalginventorygobservation,gthegauditorgthengfoundgeachgitemgs
electedgandgcountedgthegnumbergofgunitsgonghand.gAssuminggthatgthegamountgonghandgwasgthe
gsamegasgthegamountgingthegclient'sgdetailedginventoryglisting,gthisgproceduregmostglikelygwoul
dgprovidegevidencegconcerninggmanagement'sgassertiongofgA)gcompleteness.g
B) valuation.g
C) presentationgandgdisclosure.g
D) existence.g
E) rightsgandgobligations.g
g
g
15) AccordinggtogPCAOBgAuditinggStandardgNo.g2201g(gASg2201),gthegauditorgshouldgidentifygsi
gnificantgaccountsgandgdisclosuresgandgtheirgrelevantgassertions.gWhichgofgthegfollowinggfinan
cialgstatementgassertionsgisgnotgexplicitlygidentifiedgingASg2201?gA)gCompletenessg
B) Valuationgorgallocationg
C) Accuracyg
g g g g g g g g g g g 3g
, D) Existencegorgoccurrenceg
E) AllgofgthesegaregassertionsgidentifiedgingASg2201.g
g
g
16) Whengtestinggthegcompletenessgassertiongforgagliabilitygaccount,gangauditorgordinarilygworksgfr
omgtheg
A) financialgstatementsgtogthegpotentiallygunrecordedgitems.g
B) potentiallygunrecordedgitemsgtogthegfinancialgstatements.g
C) accountinggrecordsgtogthegsupportinggevidence.g
D) trialgbalancegtogthegsubsidiarygledger.g
g
g
17) Ifgangauditorgisgperforminggproceduresgrelatedgtogtheginformationgthatgisgcontainedgingthegclien
t'sgpensiongfootnote,ghe/shegisgmostglikelygtogobtaingevidencegconcerninggmanagement'sgasserti
ongaboutg
A) rightsgandgobligations.g
B) existence.gC)gvaluation.g
D)gpresentationgandgdisclosure.g
g
g
18) Whichgofgthegfollowinggquestionsgwouldgbeinappropriategforgangauditorgtogaskgagclientgwhen
gexhibitinggangappropriateglevelgofgprofessionalgskepticismgwhilegcompletinggangauditgprocedu
regrelatedgtogtheginternalgcontrolgsystem?gA)gWhatgcanggogwronggingthisgprocess?g
B) Whichgofgyourgemployeesgisgagfraudster?g
C) Whatgelsegisgimportantgtogknowgaboutgthisgprocess?g
D) Whatghappensgwhengagkeygemployeeggoesgongvacation?g
g
g
19) Togbegproficientgasgangauditor,gagpersongmustgfirstgbegablegtogaccomplishgwhichgofgthesegtasksg
ingagdecision-makinggprocess?g
A) Identifygauditgevidencegrelevantgtogthegverificationgofgassertionsgmanagementgmakesgingit
sgunauditedgfinancialgstatementsgandgnotes.g
B) Formulategevidence-
gatheringgproceduresg(auditgplan)gdesignedgtogobtaingsufficient,gcompetentgevidencegabo
utgassertionsgmanagementgmakesgingfinancialgstatementsgandgnotes.g
C) Recognizegthegfinancialgassertionsgmadegingmanagement'sgfinancialgstatementsgandgfootn
otes.g
D) Evaluategthegevidencegproducedgbygthegperformancegofgproceduresgandgdecidegwhetherg
management'sgassertionsgconformgtoggenerallygacceptedgaccountinggprinciplesgandgrealit
y.g
g
g
20) Whichgofgthegfollowinggisgangunderlyinggconditiongthatgingpartgcreatesgthegdemandgbygusersgfo
rgreliableginformation?g
A) Economicgtransactionsgthatgaregnumerousgandgcomplex.g
g g g g g g g g g g g 4g
