Auditingg&gAssurancegServices
TEST BANK
g g
Auditing & Assurance Services: A Systematic
g g g g g g
Approach, 11th Edition Chapters 1 - 21
g g g g g g g
,Auditingg&gAssurancegServices
Chapterg1:gAngIntroductiongtogAssurancegandgFinancialgStatementgAuditing
Chapterg2:gThegFinancialgStatementgAuditinggEnvironment
Chapterg3:gAuditgPlanning,gTypesgofgAuditgTests,gandgMateriality
Chapterg4:gRiskgAssessment
Chapterg5:gEvidencegandgDocumentation
Chapterg6:gInternalgControlgingagFinancialgStatementgAudit
Chapterg7:gAuditinggInternalgControlgovergFinancialgReporting
Chapterg8:gAuditgSampling:gAngOverviewgandgApplicationgtogTestsgofgControls
Chapterg9:gAuditgSampling:gAngApplicationgtogSubstantivegTestsgofgAccountgBalances
Chapterg10:gAuditinggthegRevenuegProcess
Chapterg11:gAuditinggthegPurchasinggProcess
Chapterg12:gAuditinggthegHumangResourcegManagementgProcess
Chapterg13:gAuditinggthegInventorygManagementgProcess
Chapterg14:gAuditinggthegFinancing/InvestinggProcess:gPrepaidgExpenses,gIntangiblegAssets,
gandgProperty,gPlant,gandgEquipment
Chapterg15:gAuditinggthegFinancing/InvestinggProcess:gLong-
TermgLiabilities,gStockholders’gEquity,gandgIncomegStatementgAccounts
Chapterg16:gAuditinggthegFinancing/InvestinggProcess:gCashgandgInvestments
Chapterg17:gCompletinggthegAuditgEngagement
Chapterg18:gReportsgongAuditedgFinancialgStatements
Chapterg19:gProfessionalgConduct,gIndependence,gandgQualitygManagement
Chapterg20:gLegalgLiability
Chapterg21:gAssurance,gAttestation,gandgInternalgAuditinggServices
,Auditingg&gAssurancegServices
Chapterg 01g
Ang Introductiong tog Assuranceg andg Financialg Statementg Auditing
Trueg /g Falseg Questions
1. Independenceg standards g areg requiredgforg auditsg ofg publicg companies,g butg notg forg aud
itsgofgprivategcompanies.
True False
2. Decisiong makersg demandg reliableg informationg thatg isg providedg byg accountants.
True False
3. Informationg asymmetryg seldomg occurs.
True False
4. Conflictsg ofg interestgoftengoccurg betweeng absenteeg ownersg andg managers.
True False
5. Auditingg servicesg andg attestationg servicesg areg theg same.
True False
6. Auditinggisgagtypegofgattestgservice.
True False
7. Testinggallgtransactionsgthatgoccurredgduringgthegperiodgisgcostgprohibitive.
True False
Multipleg Choiceg Questions
, Auditingg&gAssurancegServices
8. Whygdogauditorsggenerallygusegagsamplinggapproachgtogevidenceggathering?
A. Auditorsg aregexpertsg andgdognotgneedgtoglookgatgmuchgtogknowgwhethergthegfinan
cialgstatementsgaregcorrectgorgnot.
B. Auditorsg mustgbalancegthegcostgofgthegauditgwithgthegneedg
forgprecision.
C. Auditorsgmustglimitgtheirgexposuregtogtheirgauditeegtogmainta
ingindependence.
D. Thegauditor'sgrelationshipgwithgthegauditeegisggenerallygadversarial,gsogthegauditorg
willgnotghavegaccessgtogallgofgthegfinancialginformationgofgthegcompany.
9. Whichg ofg theg followingg statementsg bestg describesg ag relationshipg betweeng sampleg sizeg a
ndgothergelementsgofgauditing?
A. Ifg materialityg increases,g sog willg th
egsamplegsize.
B. Ifg theg desiredg levelg ofg assuranceg increases,g sampleg sizesg cang
begsmaller.
C. Ifgmaterialitygdecreases,gsamplegsizegwillgneedg
togincrease.
D. Theregisgnogrelationshipg betweengsamplegsizeg andg materialitygorgthegdesiredgle
velgofgassurance.
10. Whichg ofg theg followingg statementsg aboutg theg studygofg auditingg isg NOTg true?
A. Theg studyg ofg auditingg cang beg valuableg tog futureg accountantsg andg businessg decisi
ongmakersgwhethergorgnotgtheygplangtogbecome gauditors.
B. Theg studyg ofg auditingg focusesg ong learningg theg analyticalg andg logicalg skillsg necessary
g togevaluategthegrelevancegandgreliabilitygofginformation.
C. Theg studyg ofg auditingg focusesg ong learningg theg rules,g techniques,g andg computatio
nsgrequiredgtoganalyzegfinancialgstatements.
D. Theg studyg ofg auditingg beginsg withgtheg understandingg ofg ag coherentg logicalg framewo
rkgandgtechniquesgusefulgforggatheringgandganalyzinggevidencegaboutgothers'gassert
ions.
11. Thegbasicgpurposegofgagfinancialgstatementgauditgisgto
A. Detect
gfraud.
B. Examineg individualg transactionsg sog thatg theg auditorg mayg certifyg asg
togtheirgvalidity.
C. Provideg assuranceg regardingg whetherg theg auditee'sg financialg statementsg a
regfairlygstated.
D. Assureg theg consistentg applicationg ofg correctg accountin
ggprocedures.
TEST BANK
g g
Auditing & Assurance Services: A Systematic
g g g g g g
Approach, 11th Edition Chapters 1 - 21
g g g g g g g
,Auditingg&gAssurancegServices
Chapterg1:gAngIntroductiongtogAssurancegandgFinancialgStatementgAuditing
Chapterg2:gThegFinancialgStatementgAuditinggEnvironment
Chapterg3:gAuditgPlanning,gTypesgofgAuditgTests,gandgMateriality
Chapterg4:gRiskgAssessment
Chapterg5:gEvidencegandgDocumentation
Chapterg6:gInternalgControlgingagFinancialgStatementgAudit
Chapterg7:gAuditinggInternalgControlgovergFinancialgReporting
Chapterg8:gAuditgSampling:gAngOverviewgandgApplicationgtogTestsgofgControls
Chapterg9:gAuditgSampling:gAngApplicationgtogSubstantivegTestsgofgAccountgBalances
Chapterg10:gAuditinggthegRevenuegProcess
Chapterg11:gAuditinggthegPurchasinggProcess
Chapterg12:gAuditinggthegHumangResourcegManagementgProcess
Chapterg13:gAuditinggthegInventorygManagementgProcess
Chapterg14:gAuditinggthegFinancing/InvestinggProcess:gPrepaidgExpenses,gIntangiblegAssets,
gandgProperty,gPlant,gandgEquipment
Chapterg15:gAuditinggthegFinancing/InvestinggProcess:gLong-
TermgLiabilities,gStockholders’gEquity,gandgIncomegStatementgAccounts
Chapterg16:gAuditinggthegFinancing/InvestinggProcess:gCashgandgInvestments
Chapterg17:gCompletinggthegAuditgEngagement
Chapterg18:gReportsgongAuditedgFinancialgStatements
Chapterg19:gProfessionalgConduct,gIndependence,gandgQualitygManagement
Chapterg20:gLegalgLiability
Chapterg21:gAssurance,gAttestation,gandgInternalgAuditinggServices
,Auditingg&gAssurancegServices
Chapterg 01g
Ang Introductiong tog Assuranceg andg Financialg Statementg Auditing
Trueg /g Falseg Questions
1. Independenceg standards g areg requiredgforg auditsg ofg publicg companies,g butg notg forg aud
itsgofgprivategcompanies.
True False
2. Decisiong makersg demandg reliableg informationg thatg isg providedg byg accountants.
True False
3. Informationg asymmetryg seldomg occurs.
True False
4. Conflictsg ofg interestgoftengoccurg betweeng absenteeg ownersg andg managers.
True False
5. Auditingg servicesg andg attestationg servicesg areg theg same.
True False
6. Auditinggisgagtypegofgattestgservice.
True False
7. Testinggallgtransactionsgthatgoccurredgduringgthegperiodgisgcostgprohibitive.
True False
Multipleg Choiceg Questions
, Auditingg&gAssurancegServices
8. Whygdogauditorsggenerallygusegagsamplinggapproachgtogevidenceggathering?
A. Auditorsg aregexpertsg andgdognotgneedgtoglookgatgmuchgtogknowgwhethergthegfinan
cialgstatementsgaregcorrectgorgnot.
B. Auditorsg mustgbalancegthegcostgofgthegauditgwithgthegneedg
forgprecision.
C. Auditorsgmustglimitgtheirgexposuregtogtheirgauditeegtogmainta
ingindependence.
D. Thegauditor'sgrelationshipgwithgthegauditeegisggenerallygadversarial,gsogthegauditorg
willgnotghavegaccessgtogallgofgthegfinancialginformationgofgthegcompany.
9. Whichg ofg theg followingg statementsg bestg describesg ag relationshipg betweeng sampleg sizeg a
ndgothergelementsgofgauditing?
A. Ifg materialityg increases,g sog willg th
egsamplegsize.
B. Ifg theg desiredg levelg ofg assuranceg increases,g sampleg sizesg cang
begsmaller.
C. Ifgmaterialitygdecreases,gsamplegsizegwillgneedg
togincrease.
D. Theregisgnogrelationshipg betweengsamplegsizeg andg materialitygorgthegdesiredgle
velgofgassurance.
10. Whichg ofg theg followingg statementsg aboutg theg studygofg auditingg isg NOTg true?
A. Theg studyg ofg auditingg cang beg valuableg tog futureg accountantsg andg businessg decisi
ongmakersgwhethergorgnotgtheygplangtogbecome gauditors.
B. Theg studyg ofg auditingg focusesg ong learningg theg analyticalg andg logicalg skillsg necessary
g togevaluategthegrelevancegandgreliabilitygofginformation.
C. Theg studyg ofg auditingg focusesg ong learningg theg rules,g techniques,g andg computatio
nsgrequiredgtoganalyzegfinancialgstatements.
D. Theg studyg ofg auditingg beginsg withgtheg understandingg ofg ag coherentg logicalg framewo
rkgandgtechniquesgusefulgforggatheringgandganalyzinggevidencegaboutgothers'gassert
ions.
11. Thegbasicgpurposegofgagfinancialgstatementgauditgisgto
A. Detect
gfraud.
B. Examineg individualg transactionsg sog thatg theg auditorg mayg certifyg asg
togtheirgvalidity.
C. Provideg assuranceg regardingg whetherg theg auditee'sg financialg statementsg a
regfairlygstated.
D. Assureg theg consistentg applicationg ofg correctg accountin
ggprocedures.
