Created By : TestsBanks
Test Bank For Auditing: A Practical Approach with Data Analytics
2nd Edition by Laura Davis Wiley, Raymond N. Johnson and
Robyn Moroney . All Chapters (1-16) Latest 2024 A+
Table of Contents
Chapter 1: Introduction and Overview of Audit and Assurance
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
Chapter 5: Audit Evidence
Chapter 6: Gaining an Understanding of the Client's System of Internal
Control
Chapter 7: Audit Data Analytics
Chapter 8: Risk Response: Performing Tests of Controls
Chapter 9: Risk Response: Performing Substantive Procedures
Chapter 10: Risk Response: Evaluating Audit Data Analytics and Audit
Sampling Chapter 11: Auditing the Revenue Process
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
Chapter 15: Completing the Audit
Chapter 16: Reporting on the Audit
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Page 1
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Chapter 1
Introduction and Overview of Audit and Assurance
Question Type: True or False
1. GAAP and IFRS are examples of applicable financial reporting framework.
A. True
B. False
Answer: A, Taxonomy: Knowledge, Difficulty: Easy, AICPA FC: Reporting, AACSB:
Communication, Learning Objective: LO1.1, Solution: The applicable financial reporting
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.
2. Review of financial forecasts falls under attestation services.
A. True
B. False
Answer: A, Taxonomy: Knowledge, Difficulty: Easy, AICPA FC: Measurement Analysis
and 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.
3. Within a U.S. context, the applicable financial reporting framework is typically
Generally Accepted Accounting Principles (GAAP).
A. True
B. False
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Answer: A, Taxonomy: Knowledge, Difficulty: Easy, AICPA FC: Measurement Analysis
and 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).
4. Private companies, or non-issuers, are not required by the U.S. government to have an
annual financial statement audit
A. True
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 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.
5. One of the reasons there is a demand for financial statement audits is that users of
financial statements often lack accounting and legal knowledge to fully understand
complex accounting and disclosure choices.
A. True
B. False
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 accounting and legal knowledge to assess the
reasonableness of complex accounting and disclosure choices being made by the
company.
6. In financial accounting, the balance sheet is a statement of financial position
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A. True
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 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.
A. True
B. False
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.
8. Securities Exchange Act of 1934 regulates the ongoing trading of securities after the
initial public offering and requires the annual audit of a public company‘s financial
statements.
A. True
B. False
Answer: A, Taxonomy: Knowledge, Difficulty: Easy, AICPA BB: Governance Perspective,
AACSB: Ethics, Learning Objective: LO1.5, Solution: The Securities Exchange Act of 1934
regulates the ongoing trading of securities after the initial public offering and requires
the annual audit of a public company‘s financial statements.
Instant Download
Page 4
Test Bank For Auditing: A Practical Approach with Data Analytics
2nd Edition by Laura Davis Wiley, Raymond N. Johnson and
Robyn Moroney . All Chapters (1-16) Latest 2024 A+
Table of Contents
Chapter 1: Introduction and Overview of Audit and Assurance
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
Chapter 5: Audit Evidence
Chapter 6: Gaining an Understanding of the Client's System of Internal
Control
Chapter 7: Audit Data Analytics
Chapter 8: Risk Response: Performing Tests of Controls
Chapter 9: Risk Response: Performing Substantive Procedures
Chapter 10: Risk Response: Evaluating Audit Data Analytics and Audit
Sampling Chapter 11: Auditing the Revenue Process
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
Chapter 15: Completing the Audit
Chapter 16: Reporting on the Audit
Instant Download
Page 1
,Created By : TestsBanks
Chapter 1
Introduction and Overview of Audit and Assurance
Question Type: True or False
1. GAAP and IFRS are examples of applicable financial reporting framework.
A. True
B. False
Answer: A, Taxonomy: Knowledge, Difficulty: Easy, AICPA FC: Reporting, AACSB:
Communication, Learning Objective: LO1.1, Solution: The applicable financial reporting
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.
2. Review of financial forecasts falls under attestation services.
A. True
B. False
Answer: A, Taxonomy: Knowledge, Difficulty: Easy, AICPA FC: Measurement Analysis
and 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.
3. Within a U.S. context, the applicable financial reporting framework is typically
Generally Accepted Accounting Principles (GAAP).
A. True
B. False
Instant Download
Page 2
,Created By : TestsBanks
Answer: A, Taxonomy: Knowledge, Difficulty: Easy, AICPA FC: Measurement Analysis
and 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).
4. Private companies, or non-issuers, are not required by the U.S. government to have an
annual financial statement audit
A. True
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 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.
5. One of the reasons there is a demand for financial statement audits is that users of
financial statements often lack accounting and legal knowledge to fully understand
complex accounting and disclosure choices.
A. True
B. False
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 accounting and legal knowledge to assess the
reasonableness of complex accounting and disclosure choices being made by the
company.
6. In financial accounting, the balance sheet is a statement of financial position
Instant Download
Page 3
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A. True
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 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.
A. True
B. False
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.
8. Securities Exchange Act of 1934 regulates the ongoing trading of securities after the
initial public offering and requires the annual audit of a public company‘s financial
statements.
A. True
B. False
Answer: A, Taxonomy: Knowledge, Difficulty: Easy, AICPA BB: Governance Perspective,
AACSB: Ethics, Learning Objective: LO1.5, Solution: The Securities Exchange Act of 1934
regulates the ongoing trading of securities after the initial public offering and requires
the annual audit of a public company‘s financial statements.
Instant Download
Page 4
