Auditing & Assurance Services By Timothy Louwers,9e
(Test Bank All Chapters, 100% Original Verified, A+
Grade) Answers at the end of each chapter.
Chapter 1
Student name:__________
1) Which of the PCAOB assertions (A–E) are best verified by the following audit procedures
(1–4)?
A. Existence or occurrence
B. Rights and obligations
C. Valuation or allocation
D. Completeness
E. Presentation and disclosure
___ 1. Confirming inventory held on consignment by the client with
independent third party.
___ 2. Consulting the Wall Street Journal for year-end prices of
securities held by the client.
___ 3. Physically examine all major property and equipment
additions.
___ 4. Review the aged trial balance for significant past due
accounts.
Version 1 1
,Chapter 1
2) ABC Company had a major sale to XYZ Company. This sale accounted for 20% of the
revenue of ABC Company. The auditors performed the audit procedures listed 1–3. For each
audit procedure select the ASB assertion about classes of transactions and events and related
disclosures that is most likely being tested.
A. Occurrence
B. Completeness
C. Cutoff
D. Accuracy
E. Classification
___ 1. The auditor reviewed the shipping documents to check the date
that product was shipped to XYZ Company.
___ 2. The auditor reviewed the shipping documents to ensure that
all product included in the sales revenue to XYZ had been
shipped.
___ 3. The auditor reviewed the invoice sent to XYZ Company to
ensure that XYZ had been properly billed.
Version 1 2
,Chapter 1
3) Auditors are auditing the warehouse of Huge Lots Corporation. The auditors performed the
audit procedures listed 1–5. For each audit procedure select the ASB assertions about account
balances and related disclosures that is most likely being tested.
A. Existence
B. Rights and obligations
C. Completeness
D. Accuracy
E. Valuation
___ 1. The auditors walked through the warehouse looking for
obsolete inventory.
___ 2. The auditors compared invoices received from suppliers with
the cost of inventory listed in the inventory accounts.
___ 3. The auditors reviewed purchase orders to determine if any
inventory was on consignment.
___ 4. The auditors reviewed vendor invoices to determine if freight
costs, taxes, tariffs, or other costs had been included in
inventory costs.
___ 5. The auditors selected items from the inventory and reviewed
inventory records to ensure these items were included in those
records.
Version 1 3
, Chapter 1
Answer Key
Test name: Chapter 1.1
1) Essay
2) Essay
3) Essay
Version 1 4
(Test Bank All Chapters, 100% Original Verified, A+
Grade) Answers at the end of each chapter.
Chapter 1
Student name:__________
1) Which of the PCAOB assertions (A–E) are best verified by the following audit procedures
(1–4)?
A. Existence or occurrence
B. Rights and obligations
C. Valuation or allocation
D. Completeness
E. Presentation and disclosure
___ 1. Confirming inventory held on consignment by the client with
independent third party.
___ 2. Consulting the Wall Street Journal for year-end prices of
securities held by the client.
___ 3. Physically examine all major property and equipment
additions.
___ 4. Review the aged trial balance for significant past due
accounts.
Version 1 1
,Chapter 1
2) ABC Company had a major sale to XYZ Company. This sale accounted for 20% of the
revenue of ABC Company. The auditors performed the audit procedures listed 1–3. For each
audit procedure select the ASB assertion about classes of transactions and events and related
disclosures that is most likely being tested.
A. Occurrence
B. Completeness
C. Cutoff
D. Accuracy
E. Classification
___ 1. The auditor reviewed the shipping documents to check the date
that product was shipped to XYZ Company.
___ 2. The auditor reviewed the shipping documents to ensure that
all product included in the sales revenue to XYZ had been
shipped.
___ 3. The auditor reviewed the invoice sent to XYZ Company to
ensure that XYZ had been properly billed.
Version 1 2
,Chapter 1
3) Auditors are auditing the warehouse of Huge Lots Corporation. The auditors performed the
audit procedures listed 1–5. For each audit procedure select the ASB assertions about account
balances and related disclosures that is most likely being tested.
A. Existence
B. Rights and obligations
C. Completeness
D. Accuracy
E. Valuation
___ 1. The auditors walked through the warehouse looking for
obsolete inventory.
___ 2. The auditors compared invoices received from suppliers with
the cost of inventory listed in the inventory accounts.
___ 3. The auditors reviewed purchase orders to determine if any
inventory was on consignment.
___ 4. The auditors reviewed vendor invoices to determine if freight
costs, taxes, tariffs, or other costs had been included in
inventory costs.
___ 5. The auditors selected items from the inventory and reviewed
inventory records to ensure these items were included in those
records.
Version 1 3
, Chapter 1
Answer Key
Test name: Chapter 1.1
1) Essay
2) Essay
3) Essay
Version 1 4
