Auditing & Assurance Services
ss ss ss
TEST BANK
ss ss
Auditing & Assurance Services: A Systematic
ss ss ss ss ss
Approach, 11th Edition Chapters 1 - 21
ss ss ss ss ss ss ss ss
,Auditing & Assurance Services
ss ss ss
Chapter ss1: ssAn ssIntroduction ssto ssAssurance ssand ssFinancial ssStatement ssAuditing
Chapter ss2: ssThe ssFinancial ssStatement ssAuditing ssEnvironment
Chapter ss3: ssAudit ssPlanning, ssTypes ssof ssAudit ssTests, ssand ssMateriality
Chapter ss4: ssRisk ssAssessment
Chapter ss5: ssEvidence ssand ssDocumentation
Chapter ss6: ssInternal ssControl ssin ssa ssFinancial ssStatement ssAudit
Chapter ss7: ssAuditing ssInternal ssControl ssover ssFinancial ssReporting
Chapter ss8: ssAudit ssSampling: ssAn ssOverview ssand ssApplication ssto ssTests ssof ssControls
Chapter ss9: ssAudit ssSampling: ssAn ssApplication ssto ssSubstantive ssTests ssof ssAccount ssBalances
Chapter ss10: ssAuditing ssthe ssRevenue ssProcess
Chapter ss11: ssAuditing ssthe ssPurchasing ssProcess
Chapter ss12: ssAuditing ssthe ssHuman ssResource ssManagement ssProcess
Chapter ss13: ssAuditing ssthe ssInventory ssManagement ssProcess
Chapter ss14: ssAuditing ssthe ssFinancing/Investing ssProcess: ssPrepaid ssExpenses, ssIntangible
ssAssets, ssand ssProperty, ssPlant, ssand ssEquipment
Chapter ss15: ssAuditing ssthe ssFinancing/Investing ssProcess: ssLong-Term ssLiabilities,
ssStockholders’ ssEquity, ssand ssIncome ssStatement ssAccounts
Chapter ss16: ssAuditing ssthe ssFinancing/Investing ssProcess: ssCash ssand ssInvestments
Chapter ss17: ssCompleting ssthe ssAudit ssEngagement
Chapter ss18: ssReports sson ssAudited ssFinancial ssStatements
Chapter ss19: ssProfessional ssConduct, ssIndependence, ssand ssQuality ssManagement
Chapter ss20: ssLegal ssLiability
Chapter ss21: ssAssurance, ssAttestation, ssand ssInternal ssAuditing ssServices
,Auditing & Assurance Services
ss ss ss
Chapter 01 ss s
An Introduction to Assurance and Financial Statement
ss ss ss ss ss ss
ss Auditing
True s s / s s False ss Questions
1. Independence ss standards ss are ss required ss for ss audits ss of ss public ss companies, ss but ss not
ss for ss auditssof ssprivate sscompanies.
True False
2. Decision ss makers ss demand ss reliable ss information ss that s s is ss provided s s by ss accountants.
True False
3. Information s s asymmetry s s seldom s s occurs.
True False
4. Conflicts ss of ss interest ss often ss occur ss between ss absentee ss owners ss and ss managers.
True False
5. Auditing s s services s s and s s attestation s s services s s are s s the ss same.
True False
6. Auditing ssis ssa sstype ssof ssattest ssservice.
True False
7. Testing ssall sstransactions ssthat ssoccurred ssduring ss the ssperiod ssis sscost ssprohibitive.
True False
Multiple ssChoice ss Questions
, Auditing & Assurance Services
ss ss ss
8. Why ssdo ssauditors ssgenerally ssuse ssa sssampling ssapproach ssto ssevidence ssgathering?
A. Auditors ss are ssexperts ss and ssdo ssnot ssneed ssto sslook ssat ssmuch ssto ssknow sswhether ssthe
ssfinancials s tatements ssare sscorrect ssor ssnot.
B. Auditors ss must ssbalance ssthe sscost ssof ssthe ssaudit sswith ssthe
ss need ssforsprecision.
C. Auditors ssmust sslimit sstheir ssexposure ssto sstheir ssauditee ssto
ssmaintainsi ndependence.
D. The ssauditor's ssrelationship sswith ssthe ssauditee ssis ssgenerally ssadversarial, ssso ssthe
ss auditor ss willsnot sshave ssaccess ssto ssall ssof ssthe ssfinancial ssinformation ssof ssthe sscompany.
9. Which ss of ss the ss following ss statements ss best s s describes ss a ss relationship ss between ss sample
ss size ss and sother sselements ssof ssauditing?
A. If s s materiality s s increases, s s so s s will
s s thess ample sssize.
B. If ss the s s desired ss level ss of ss assurance s s increases, ss sample s s sizes
ss can s s bess maller.
C. If ssmateriality ssdecreases, sssample sssize sswill
ssneed sstosi ncrease.
D. There ssis ssno ssrelationship ss between sssample sssize ss and ss materiality ssor ssthe
ss desired sslevelsof ssassurance.
10. Which ss of ssthe ss following ssstatements ss about ss the ss study ss of ss auditing ss is ss NOT ss true?
A. The s s study s s of s s auditing s s can s s be s s valuable s s to s s future s s accountants s s and s s business
ss decisionsm akers sswhether ssor ssnot ssthey ssplan ssto ssbecome ssauditors.
B. The ss study ss of ss auditing ss focuses s s on ss learning ss the ss analytical s s and ss logical ss skills
ss necessary ss tosevaluate ssthe ssrelevance ssand ssreliability ssof ssinformation.
C. The ss study ss of ss auditing s s focuses ss on ss learning s s the ss rules, ss techniques, ss and
ss computations srequired ssto ssanalyze ssfinancial ssstatements.
D. The ss study ss of ss auditing ss begins ss with ssthe ss understanding ss of ss a sscoherent ss logical
ss framework ssand sstechniques ssuseful ssfor ssgathering ssand ssanalyzing ssevidence ssabout
ssothers' ssassertions.
11. The ssbasic sspurpose ssof ssa ssfinancial ssstatement ssaudit ssis ssto
A. Detects
fraud.
B. Examine ss individual ss transactions ss so ss that ss the ss auditor ss may ss certify
ss as ss tost heir ssvalidity.
C. Provide s s assurance s s regarding s s whether s s the s s auditee's s s financial
s s statements s s aresfairly ssstated.
D. Assure ss the ss consistent ss application s s of ss correct
ss accountingsprocedures.
ss ss ss
TEST BANK
ss ss
Auditing & Assurance Services: A Systematic
ss ss ss ss ss
Approach, 11th Edition Chapters 1 - 21
ss ss ss ss ss ss ss ss
,Auditing & Assurance Services
ss ss ss
Chapter ss1: ssAn ssIntroduction ssto ssAssurance ssand ssFinancial ssStatement ssAuditing
Chapter ss2: ssThe ssFinancial ssStatement ssAuditing ssEnvironment
Chapter ss3: ssAudit ssPlanning, ssTypes ssof ssAudit ssTests, ssand ssMateriality
Chapter ss4: ssRisk ssAssessment
Chapter ss5: ssEvidence ssand ssDocumentation
Chapter ss6: ssInternal ssControl ssin ssa ssFinancial ssStatement ssAudit
Chapter ss7: ssAuditing ssInternal ssControl ssover ssFinancial ssReporting
Chapter ss8: ssAudit ssSampling: ssAn ssOverview ssand ssApplication ssto ssTests ssof ssControls
Chapter ss9: ssAudit ssSampling: ssAn ssApplication ssto ssSubstantive ssTests ssof ssAccount ssBalances
Chapter ss10: ssAuditing ssthe ssRevenue ssProcess
Chapter ss11: ssAuditing ssthe ssPurchasing ssProcess
Chapter ss12: ssAuditing ssthe ssHuman ssResource ssManagement ssProcess
Chapter ss13: ssAuditing ssthe ssInventory ssManagement ssProcess
Chapter ss14: ssAuditing ssthe ssFinancing/Investing ssProcess: ssPrepaid ssExpenses, ssIntangible
ssAssets, ssand ssProperty, ssPlant, ssand ssEquipment
Chapter ss15: ssAuditing ssthe ssFinancing/Investing ssProcess: ssLong-Term ssLiabilities,
ssStockholders’ ssEquity, ssand ssIncome ssStatement ssAccounts
Chapter ss16: ssAuditing ssthe ssFinancing/Investing ssProcess: ssCash ssand ssInvestments
Chapter ss17: ssCompleting ssthe ssAudit ssEngagement
Chapter ss18: ssReports sson ssAudited ssFinancial ssStatements
Chapter ss19: ssProfessional ssConduct, ssIndependence, ssand ssQuality ssManagement
Chapter ss20: ssLegal ssLiability
Chapter ss21: ssAssurance, ssAttestation, ssand ssInternal ssAuditing ssServices
,Auditing & Assurance Services
ss ss ss
Chapter 01 ss s
An Introduction to Assurance and Financial Statement
ss ss ss ss ss ss
ss Auditing
True s s / s s False ss Questions
1. Independence ss standards ss are ss required ss for ss audits ss of ss public ss companies, ss but ss not
ss for ss auditssof ssprivate sscompanies.
True False
2. Decision ss makers ss demand ss reliable ss information ss that s s is ss provided s s by ss accountants.
True False
3. Information s s asymmetry s s seldom s s occurs.
True False
4. Conflicts ss of ss interest ss often ss occur ss between ss absentee ss owners ss and ss managers.
True False
5. Auditing s s services s s and s s attestation s s services s s are s s the ss same.
True False
6. Auditing ssis ssa sstype ssof ssattest ssservice.
True False
7. Testing ssall sstransactions ssthat ssoccurred ssduring ss the ssperiod ssis sscost ssprohibitive.
True False
Multiple ssChoice ss Questions
, Auditing & Assurance Services
ss ss ss
8. Why ssdo ssauditors ssgenerally ssuse ssa sssampling ssapproach ssto ssevidence ssgathering?
A. Auditors ss are ssexperts ss and ssdo ssnot ssneed ssto sslook ssat ssmuch ssto ssknow sswhether ssthe
ssfinancials s tatements ssare sscorrect ssor ssnot.
B. Auditors ss must ssbalance ssthe sscost ssof ssthe ssaudit sswith ssthe
ss need ssforsprecision.
C. Auditors ssmust sslimit sstheir ssexposure ssto sstheir ssauditee ssto
ssmaintainsi ndependence.
D. The ssauditor's ssrelationship sswith ssthe ssauditee ssis ssgenerally ssadversarial, ssso ssthe
ss auditor ss willsnot sshave ssaccess ssto ssall ssof ssthe ssfinancial ssinformation ssof ssthe sscompany.
9. Which ss of ss the ss following ss statements ss best s s describes ss a ss relationship ss between ss sample
ss size ss and sother sselements ssof ssauditing?
A. If s s materiality s s increases, s s so s s will
s s thess ample sssize.
B. If ss the s s desired ss level ss of ss assurance s s increases, ss sample s s sizes
ss can s s bess maller.
C. If ssmateriality ssdecreases, sssample sssize sswill
ssneed sstosi ncrease.
D. There ssis ssno ssrelationship ss between sssample sssize ss and ss materiality ssor ssthe
ss desired sslevelsof ssassurance.
10. Which ss of ssthe ss following ssstatements ss about ss the ss study ss of ss auditing ss is ss NOT ss true?
A. The s s study s s of s s auditing s s can s s be s s valuable s s to s s future s s accountants s s and s s business
ss decisionsm akers sswhether ssor ssnot ssthey ssplan ssto ssbecome ssauditors.
B. The ss study ss of ss auditing ss focuses s s on ss learning ss the ss analytical s s and ss logical ss skills
ss necessary ss tosevaluate ssthe ssrelevance ssand ssreliability ssof ssinformation.
C. The ss study ss of ss auditing s s focuses ss on ss learning s s the ss rules, ss techniques, ss and
ss computations srequired ssto ssanalyze ssfinancial ssstatements.
D. The ss study ss of ss auditing ss begins ss with ssthe ss understanding ss of ss a sscoherent ss logical
ss framework ssand sstechniques ssuseful ssfor ssgathering ssand ssanalyzing ssevidence ssabout
ssothers' ssassertions.
11. The ssbasic sspurpose ssof ssa ssfinancial ssstatement ssaudit ssis ssto
A. Detects
fraud.
B. Examine ss individual ss transactions ss so ss that ss the ss auditor ss may ss certify
ss as ss tost heir ssvalidity.
C. Provide s s assurance s s regarding s s whether s s the s s auditee's s s financial
s s statements s s aresfairly ssstated.
D. Assure ss the ss consistent ss application s s of ss correct
ss accountingsprocedures.
