Solution Manual & Test Bank for Auditing A Risk-Based Approach 12th Edition by Audrey Gramling Karla Johnstone-Zehms Larry Rittenberg All Chapters Complete Guide A+

Auditing Theory Test Bank
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UDITINGgTHEORY
Overview

1. Providinggquantitativeginformationgthatgmanagementgandgothersgcangusegtogmakegdecisionsgisgthegfunctiongof
A. Accounting
B. Auditing
C. Finance
D. Managementgofginformationgsystems

2. Thegseriesgofgtasksgandgrecordsgofgangentitygbygwhichgtransactionsgaregprocessedgasgagmeansgofgmaintaininggfin
ancialgrecords
A. Accountinggsystem
B. Computerginformationgsystem
C. Controlgenvironment
D. Internalgcontrolgsystem

3. Thegexpertisegthatgdistinguishesgauditorsgfromgaccountantsgisgingthe
A. Abilitygtoginterpretgaccountinggstandards
B. Accumulationgandginterpretationgofgevidence
C. Abilitygtoginterpretggenerallygacceptedgaccountinggprinciples
D. Requirementgtogpossessgeducationgbeyondgthegbachelor’sgdegree

4. Comprisesgofficersgandgothersgwhogalsogperformgseniorgmanagerialgfunctions
A. Auditgcommittee C.gGovernance
B. Boardgofgdirectors D.gManagement

5. Angauditgconductedgtogdeterminegwhethergangentitygisgfollowinggspecificgproceduresgorgrulesgsetgdowngbygsomeg
highergauthority
A. Complianceg audit C.gFinancialgaudit
B. Detailedgaudit D.gOperationalgaudit

6. Ag reviewg ofg anyg partg ofg ang organization’sg andg methodsg forg theg purposeg ofg evaluatingg efficiencyg andg effectivenessg is
classifiedgasga(n)
A. Auditgofgfinancialgstatements
B. Complianceg audit
C. Operationalgaudit
D. Productiongaudit

7. Operationalgauditinggisgprimarilygorientedgtoward
A. Pastgprotectiongprovidedgbygexistingginternalgcontrol
B. Futuregimprovementsgtogaccomplishgtheggoalsgofgmanagement
C. Thegaccuracygofgdatagreflectedgingmanagement’sgfinancialgrecords
D. Thegverificationgthatgagcompany’sgfinancialgstatementsgaregfairlygpresented

8. Agtypicalgobjectivegofgangoperationalgauditgis
A. Makegrecommendationsgforgimprovinggperformance
B. Evaluategthegfeasibilitygofgattaininggthegentity’sgoperationalgobjectives
C. Reportgongthegentity’sgrelativegsuccessgingattaininggprofitgmaximization
D. Determinegwhethergthegfinancialgstatementsgfairlygpresentgthegentity’sgoperations

9. Undergtheglaw,gthegchiefgexecutivegofficergofgthegCommissiongongAuditgisgthe
A. Chairman C.gCommissioner
B. Commissiong Secretary D.gExecutivegDirector

10. OnegofgtheggovernmentgauditinggstandardsgwhichgisgnotgobservedgbygindependentgCPAsgingthegprivategsectorgis:
A. Angevaluationgshallgbegmadegofgthegsystemgofginternalgcontrol
B. Agreviewgshallgbegmadegofgcompliancegwithglegalgandgstatutorygrequirements
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, C. Thegauditgisgtogbegadequatelygplannedgandgassistantsgaregtogbegproperlygsupervised
D. Sufficientg competentg evidentialg matterg shallg beg obtainedg throughg inspection,g observation,g inquiries,g an
dgconfirmations

11. Whichgofgthegfollowinggisgmoregdifficultgtogevaluategobjectively?
A. Compliancegwithggovernmentgregulations
B. Efficiencygandgeffectivenessgofgoperations
C. Presentationgofgfinancialgstatementsgingaccordancegwithggenerallygacceptedgaccountinggprinciples
D. Allgthreegofgthegabovegaregequallygdifficult

ProfessionalgPracticegofgAccounting

12. ThegCoregCompetenciesgofgCPAsginclude:
A. Assurancegandginformationgintegrity
B. Objectivity
C. Pursuitgofglife-longglearninggandgexcellence
D. Strategicgandgcriticalgthinkinggskills

13.
grefersgtogthegapplicationgofgrelevant,gtraining,gknowledgegandgexperience,gwithingthegcontextgprovided
gbygauditing,gaccountinggandgethicalgstandardsgingmakingginformedgdecisionsgaboutgthegcoursegofgactiongthatgaregap
propriategingthegcircumstancesgofgthegauditgengagement.
A. Compliance C.gProfessionalgjudgment
B. Professionalgcompetence D.gReasonablegassurance

14. Whilegperforminggservicesgforgtheirgclients,gprofessionalsghavegagdutygtogprovidegaglevelgofgcaregwhichgis
A. Freegfromgjudgmentgerrors C.gReasonable
B. Greatergthangaverage D.gSuperior

15. “Absencegofgreasonablegcaregthatgcangbegexpectedgofgagpersongingagsetgofgcircumstances”gisgthegdefinitiongof
A. Constructivegfraud C.gGrossgnegligence
B. Fraud D.gOrdinarygnegligence

QualitygControlgStandards

16. Thegpoliciesgandgproceduresgadoptedgbygagfirmgtogprovidegreasonablegassurancegthatgallgauditsgdonegbygthegfirm
garegbeinggcarriedgoutgingaccordancegwithgthegObjectivegandgGeneralgPrinciplesgGoverninggangAuditgofgFinancialgSt
atements.
A. Generalgcontrols C.gPeergreview
B. Internalgcontrols D.gQualitygcontrols

17. Thegmaingpurposegofgimplementinggqualitygcontrolgpoliciesgandgproceduresgis:
A. Toghavegagfavorablegpeergreview
B. Togcomplygwithgregulatorygagency
C. Togstandardizegthegpoliciesgandgproceduresgofgthegauditgfirms
D. TogprovidegreasonablegassurancegthatgauditgwillgbegconductedgingaccordancegwithgPSA

18. Agfirmgshouldgestablishgandgmaintaingagsystemgofgqualitygcontrolgtogprovidegitgwithgreasonablegassurancegthat:
I. Thegfirmgandgitsgpersonnelgcomplygwithgprofessionalgstandardsgandgapplicableglegalgandgregulatorygrequirements
II. Reportsgissuedgbygthegfirmgorgengagementgpartnersgaregappropriategingthegcircumstances
A. Igonly C.gBothgIgandgII
B. IIgonly D.gNeithergIgnorgII

19. Thegfirmgshallgestablishgpoliciesgandgproceduresgdesignedgtogprovidegitgwithgreasonablegassurancegthatgengagemen
tsgaregperformedgingaccordancegwithgprofessionalgstandardsgandgregulatorygandglegalgrequirements,gandgthatgthe
gfirmgorgthegengagementgpartnergissuegreportgthatgaregappropriategingthegcircumstance.gSuchgpoliciesgandgproced
uresgshallginclude:
A. Reviewgresponsibilities
B. Supervisiong responsibilities
C. Mattersgrelevantgtogpromotinggconsistencygingthegqualitygofgengagementgperformance
D. Allgofgthegchoices

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