TEST BANK
Auditing: A Practical Approach with Data
Analytics
ST
Raymond N. Johnson, Laura Davis Wiley, Robyn Moroney, Fiona Campbell
UV
2nd Edition
IA
_A
PP
RO
VE
D?
, TABLE OF CONTENTS
Auditing: A Practical Approach with Data Analytics (2nd Edition)
Test Bank Resource Guide
ST
Chapter 1 Introduction and Overview of Audit and Assurance
UV
Chapter 2 Professionalism and Professional Responsibilities
Chapter 3 Risk Assessment Part I: Audit Risk and Audit Strategy
Chapter 4 Risk Assessment Part II: Understanding the Client
IA
Chapter 5 Audit Evidence
Chapter 6 Gaining an Understanding of the Client’s System of Internal Control
_A
Chapter 7 Risk Response: Performing Tests of Controls
Chapter 8 Audit Data Analytics
Chapter 9 Risk Response: Performing Substantive Procedures
PP
Chapter 10 Risk Response: Audit Sampling for Substantive Procedures
Chapter 11 Auditing the Revenue Process
RO
Chapter 12 Auditing the Purchasing and Payroll Processes
Chapter 13 Auditing Cash, Inventory, and Related Income Statement Accounts
Chapter 14 Auditing Investing and Financing Activities
VE
Chapter 15 Completing the Audit
Chapter 16 Reporting on the Audit
D?
, Chapter 1
Introduction and Overview of Audit
SMT
and Assurance
EUD
Question Type: True or False
1. GAAP and IFRS are examples of applicable financial reporting framework.
V
A. True
CIA
B. False
Answer: A, Taxonomy: Knowledge, Difficulty: Easy, AICPA FC: Reporting, AACSB:
Communication, Learning Objective: LO1.1, Solution: The applicable financial reporting
O_
framework refers to the set of standards used in preparing the historical financial statements,
such as GAAP, IFRS or a Federal Income Tax Basis of Accounting.
NA
2. Review of financial forecasts falls under attestation services.
A. True
NP
B. False
Answer: A, Taxonomy: Knowledge, Difficulty: Easy, AICPA FC: Measurement Analysis and
OP
Interpretation, AACSB: Ethics, Learning Objective: LO1.1, Solution: Attestation services (under
the umbrella of assurance services) include review of historical financial statements, review of
financial forecasts, and examination of internal control.
RISO
3. Within a U.S. context, the applicable financial reporting framework is typically Generally
Accepted Accounting Principles (GAAP).
SVE
A. True
B. False
Answer: A, Taxonomy: Knowledge, Difficulty: Easy, AICPA FC: Measurement Analysis and
EUD
Interpretation, AACSB: Ethics, Learning Objective: LO1.2, Solution: Within a U.S. context, the
applicable financial reporting framework is typically generally accepted accounting principles
(GAAP).
R?
1
, 4. Private companies, or non-issuers, are not required by the U.S. government to have an
annual financial statement audit
A. True
SMT
B. False
Answer: A, Taxonomy: Knowledge, Difficulty: Easy, AICPA FC: Reporting, AACSB: Analytic,
Learning Objective: LO1.2, Solution: Private companies, or non-issuers, are not required by the
EUD
U.S. government to have an annual financial statement audit, but often other interested users,
such as a bank or lender, may request that a private company provide audited financial
statements.
V
5. One of the reasons there is a demand for financial statement audits is that users of
CIA
financial statements often lack accounting and legal knowledge to fully understand
complex accounting and disclosure choices.
O_
A. True
B. False
NA
Answer: A, Taxonomy: Comprehension, Difficulty: Easy, AICPA PC: Communication, AACSB:
Analytic, Learning Objective: LO1.3, Solution: Complexity: Financial statements are complex, the
amounts are often affected by significant estimates, and the disclosures often require significant
knowledge and experience to evaluate. Most financial statement users do not have the
NP
accounting and legal knowledge to assess the reasonableness of complex accounting and
disclosure choices being made by the company.
OP
6. In financial accounting, the balance sheet is a statement of financial position
A. True
RISO
B. False
Answer: A, Taxonomy: Knowledge, Difficulty: Easy, AICPA PC: Communication, AACSB: Analytic,
Learning Objective: LO1.3, Solution: In financial accounting, the financial statements include the
SVE
balance sheet (statement of financial position), income statement (statement of comprehensive
income), statement of cash flows, statement of changes in equity and accompanying notes.
7. Business valuation falls within the purview of non-assurance services.
EUD
A. True
B. False
R?
Answer: A, Taxonomy: Knowledge, Difficulty: Easy, AICPA FC: Measurement Analysis and
Interpretation, AACSB: Analytic, Learning Objective: LO1.4, Solution: Many of these accounting
firms provide non-assurance (or non-audit) services as well as assurance services. These non-
assurance services include management consulting, business valuation, mergers and
acquisitions, insolvency, tax and accounting services.
2
Auditing: A Practical Approach with Data
Analytics
ST
Raymond N. Johnson, Laura Davis Wiley, Robyn Moroney, Fiona Campbell
UV
2nd Edition
IA
_A
PP
RO
VE
D?
, TABLE OF CONTENTS
Auditing: A Practical Approach with Data Analytics (2nd Edition)
Test Bank Resource Guide
ST
Chapter 1 Introduction and Overview of Audit and Assurance
UV
Chapter 2 Professionalism and Professional Responsibilities
Chapter 3 Risk Assessment Part I: Audit Risk and Audit Strategy
Chapter 4 Risk Assessment Part II: Understanding the Client
IA
Chapter 5 Audit Evidence
Chapter 6 Gaining an Understanding of the Client’s System of Internal Control
_A
Chapter 7 Risk Response: Performing Tests of Controls
Chapter 8 Audit Data Analytics
Chapter 9 Risk Response: Performing Substantive Procedures
PP
Chapter 10 Risk Response: Audit Sampling for Substantive Procedures
Chapter 11 Auditing the Revenue Process
RO
Chapter 12 Auditing the Purchasing and Payroll Processes
Chapter 13 Auditing Cash, Inventory, and Related Income Statement Accounts
Chapter 14 Auditing Investing and Financing Activities
VE
Chapter 15 Completing the Audit
Chapter 16 Reporting on the Audit
D?
, Chapter 1
Introduction and Overview of Audit
SMT
and Assurance
EUD
Question Type: True or False
1. GAAP and IFRS are examples of applicable financial reporting framework.
V
A. True
CIA
B. False
Answer: A, Taxonomy: Knowledge, Difficulty: Easy, AICPA FC: Reporting, AACSB:
Communication, Learning Objective: LO1.1, Solution: The applicable financial reporting
O_
framework refers to the set of standards used in preparing the historical financial statements,
such as GAAP, IFRS or a Federal Income Tax Basis of Accounting.
NA
2. Review of financial forecasts falls under attestation services.
A. True
NP
B. False
Answer: A, Taxonomy: Knowledge, Difficulty: Easy, AICPA FC: Measurement Analysis and
OP
Interpretation, AACSB: Ethics, Learning Objective: LO1.1, Solution: Attestation services (under
the umbrella of assurance services) include review of historical financial statements, review of
financial forecasts, and examination of internal control.
RISO
3. Within a U.S. context, the applicable financial reporting framework is typically Generally
Accepted Accounting Principles (GAAP).
SVE
A. True
B. False
Answer: A, Taxonomy: Knowledge, Difficulty: Easy, AICPA FC: Measurement Analysis and
EUD
Interpretation, AACSB: Ethics, Learning Objective: LO1.2, Solution: Within a U.S. context, the
applicable financial reporting framework is typically generally accepted accounting principles
(GAAP).
R?
1
, 4. Private companies, or non-issuers, are not required by the U.S. government to have an
annual financial statement audit
A. True
SMT
B. False
Answer: A, Taxonomy: Knowledge, Difficulty: Easy, AICPA FC: Reporting, AACSB: Analytic,
Learning Objective: LO1.2, Solution: Private companies, or non-issuers, are not required by the
EUD
U.S. government to have an annual financial statement audit, but often other interested users,
such as a bank or lender, may request that a private company provide audited financial
statements.
V
5. One of the reasons there is a demand for financial statement audits is that users of
CIA
financial statements often lack accounting and legal knowledge to fully understand
complex accounting and disclosure choices.
O_
A. True
B. False
NA
Answer: A, Taxonomy: Comprehension, Difficulty: Easy, AICPA PC: Communication, AACSB:
Analytic, Learning Objective: LO1.3, Solution: Complexity: Financial statements are complex, the
amounts are often affected by significant estimates, and the disclosures often require significant
knowledge and experience to evaluate. Most financial statement users do not have the
NP
accounting and legal knowledge to assess the reasonableness of complex accounting and
disclosure choices being made by the company.
OP
6. In financial accounting, the balance sheet is a statement of financial position
A. True
RISO
B. False
Answer: A, Taxonomy: Knowledge, Difficulty: Easy, AICPA PC: Communication, AACSB: Analytic,
Learning Objective: LO1.3, Solution: In financial accounting, the financial statements include the
SVE
balance sheet (statement of financial position), income statement (statement of comprehensive
income), statement of cash flows, statement of changes in equity and accompanying notes.
7. Business valuation falls within the purview of non-assurance services.
EUD
A. True
B. False
R?
Answer: A, Taxonomy: Knowledge, Difficulty: Easy, AICPA FC: Measurement Analysis and
Interpretation, AACSB: Analytic, Learning Objective: LO1.4, Solution: Many of these accounting
firms provide non-assurance (or non-audit) services as well as assurance services. These non-
assurance services include management consulting, business valuation, mergers and
acquisitions, insolvency, tax and accounting services.
2
