TEST BANK
Auditing & Assurance Services: A Systemic Approach
12th Edition
Chapters 1-21 (Questions with Verified Answers)
PR
O
FD
O
C
,Table of Contents
Part 1 – Introduction to Assurance and Financial Statement Auditing
1. An Introduction to Assurance and Financial Statement Auditing
2. The Financial Statement Auditing Environment
Part 2 – Audit Planning and Basic Auditing Concepts
3. Audit Planning, Types of Audit Tests, and Materiality
4. Risk Assessment
5. Evidence and Documentation
Part 3 – Understanding and Auditing Internal Control
6. Internal Control in a Financial Statement Audit
7. Auditing Internal Control over Financial Reporting
Part 4 – Statistical and Nonstatistical Sampling Tools for Auditing
PR
8. Audit Sampling: An Overview and Application to Tests of Controls
9. Audit Sampling: An Application to Substantive Tests of Account
Balances
Part 5 – Auditing Business Processes
10.Auditing the Revenue Process
O
11.Auditing the Purchasing Process
12.Auditing the Human Resource Management Process
13.Auditing the Inventory Management Process
FD
14.Auditing the Financing/Investing Process: Prepaid Expenses,
Intangible Assets, and Property, Plant, and Equipment
15.Auditing the Financing/Investing Process: Long-Term Liabilities,
Stockholders’ Equity, and Income Statement Accounts
16.Auditing the Financing/Investing Process: Cash and Investments
O
Part 6 – Completing the Audit and Reporting Responsibilities
17.Completing the Audit Engagement
C
18.Reports on Audited Financial Statements
Part 7 – Professional Responsibilities
19.Professional Conduct, Independence, and Quality Management
20.Legal Liability
Part 8 – Assurance, Attestation, and Internal Auditing Services
21.Assurance, Attestation, and Internal Auditing Services
,Chapter 1
Answers are at the End of Each Chapter
Student name: 1)
1) Why do auditors often use a sampling approach to evidence gathering?
A) Auditors are experts and do not need to look at much to know whether the financial
statements are correct or not.
B) Auditors must balance the cost of the audit with the need for precision and for some types of
evidence, computer data analytic approaches can’t be used.
PR
C) Auditors must limit their exposure to their auditee to maintain independence.
D) The auditor's relationship with the auditee is generally adversarial, so the auditor will not
have access to all of the financial information of the company.
O
Question Details
AACSB : Communication
AICPA : FN Decision Making
FD
Accessibility : Keyboard Navigation
Difficulty : 1 Easy
AICPA : BB Industry
Bloom's : Understand
Learning Objective : 01-05 Understand why sampling is important in an audit.
O
Gradable : automatic
Accessibility : Screen Reader Compatible
Topic : The Audit Process
C
2) Which of the following statements best describes a relationship between sample size and
other elements of auditing?
2)
, A) If materiality increases, so will the sample size.
B) If the desired level of assurance increases, sample sizes can be smaller.
C) If materiality decreases, sample size will need to increase.
D) There is no relationship between sample size and materiality or the desired level of
assurance.
Question Details
Accessibility : Keyboard Navigation
Bloom's : Apply
Difficulty : 2 Medium
AICPA : BB Critical Thinking
AACSB : Analytical Thinking
PR
AICPA : FN Risk Analysis
Learning Objective : 01-05 Understand why sampling is important in an audit.
Gradable : automatic
Accessibility : Screen Reader Compatible
Topic : The Audit Process
O
FD
3) Which of the following statements about the study of auditing is NOT true?
3)
A) The study of auditing can be valuable to future accountants and business decision makers
whether or not they plan to become auditors.
O
B) The study of auditing focuses on learning the analytical and logical skills necessary to
evaluate the relevance and reliability of information.
C
C) The study of auditing focuses on learning the rules, techniques, and computations required to
analyze financial statements for making investment recommendations.
D) The study of auditing begins with the understanding of a coherent logical framework and
techniques useful for gathering and analyzing evidence about others’ assertions.
Auditing & Assurance Services: A Systemic Approach
12th Edition
Chapters 1-21 (Questions with Verified Answers)
PR
O
FD
O
C
,Table of Contents
Part 1 – Introduction to Assurance and Financial Statement Auditing
1. An Introduction to Assurance and Financial Statement Auditing
2. The Financial Statement Auditing Environment
Part 2 – Audit Planning and Basic Auditing Concepts
3. Audit Planning, Types of Audit Tests, and Materiality
4. Risk Assessment
5. Evidence and Documentation
Part 3 – Understanding and Auditing Internal Control
6. Internal Control in a Financial Statement Audit
7. Auditing Internal Control over Financial Reporting
Part 4 – Statistical and Nonstatistical Sampling Tools for Auditing
PR
8. Audit Sampling: An Overview and Application to Tests of Controls
9. Audit Sampling: An Application to Substantive Tests of Account
Balances
Part 5 – Auditing Business Processes
10.Auditing the Revenue Process
O
11.Auditing the Purchasing Process
12.Auditing the Human Resource Management Process
13.Auditing the Inventory Management Process
FD
14.Auditing the Financing/Investing Process: Prepaid Expenses,
Intangible Assets, and Property, Plant, and Equipment
15.Auditing the Financing/Investing Process: Long-Term Liabilities,
Stockholders’ Equity, and Income Statement Accounts
16.Auditing the Financing/Investing Process: Cash and Investments
O
Part 6 – Completing the Audit and Reporting Responsibilities
17.Completing the Audit Engagement
C
18.Reports on Audited Financial Statements
Part 7 – Professional Responsibilities
19.Professional Conduct, Independence, and Quality Management
20.Legal Liability
Part 8 – Assurance, Attestation, and Internal Auditing Services
21.Assurance, Attestation, and Internal Auditing Services
,Chapter 1
Answers are at the End of Each Chapter
Student name: 1)
1) Why do auditors often use a sampling approach to evidence gathering?
A) Auditors are experts and do not need to look at much to know whether the financial
statements are correct or not.
B) Auditors must balance the cost of the audit with the need for precision and for some types of
evidence, computer data analytic approaches can’t be used.
PR
C) Auditors must limit their exposure to their auditee to maintain independence.
D) The auditor's relationship with the auditee is generally adversarial, so the auditor will not
have access to all of the financial information of the company.
O
Question Details
AACSB : Communication
AICPA : FN Decision Making
FD
Accessibility : Keyboard Navigation
Difficulty : 1 Easy
AICPA : BB Industry
Bloom's : Understand
Learning Objective : 01-05 Understand why sampling is important in an audit.
O
Gradable : automatic
Accessibility : Screen Reader Compatible
Topic : The Audit Process
C
2) Which of the following statements best describes a relationship between sample size and
other elements of auditing?
2)
, A) If materiality increases, so will the sample size.
B) If the desired level of assurance increases, sample sizes can be smaller.
C) If materiality decreases, sample size will need to increase.
D) There is no relationship between sample size and materiality or the desired level of
assurance.
Question Details
Accessibility : Keyboard Navigation
Bloom's : Apply
Difficulty : 2 Medium
AICPA : BB Critical Thinking
AACSB : Analytical Thinking
PR
AICPA : FN Risk Analysis
Learning Objective : 01-05 Understand why sampling is important in an audit.
Gradable : automatic
Accessibility : Screen Reader Compatible
Topic : The Audit Process
O
FD
3) Which of the following statements about the study of auditing is NOT true?
3)
A) The study of auditing can be valuable to future accountants and business decision makers
whether or not they plan to become auditors.
O
B) The study of auditing focuses on learning the analytical and logical skills necessary to
evaluate the relevance and reliability of information.
C
C) The study of auditing focuses on learning the rules, techniques, and computations required to
analyze financial statements for making investment recommendations.
D) The study of auditing begins with the understanding of a coherent logical framework and
techniques useful for gathering and analyzing evidence about others’ assertions.
