TEST BANK for Auditing & Assurance Services, 8th Edition by Louwers, Bagley, Blay, Strawser & Thibodeau. All Chapters 1-12.

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,Full Test Bank For Auditing & Assurance Services, 8th Edition ISBN10:
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g 126036920X | ISBN13: 9781260369205 g g g




By Timothy Louwers, Penelope Bagley, Allen Blay, Jerry Strawser, Jay
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Thibodeau, David Sinason
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Student name: g




MULTIPLE CHOICE - Choose the one alternative that best completes the statement or
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answers the question.
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1) The audit objective that all transactions and accounts that should be presented in the
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financial statements are in fact included is related to which of the PCAOB assertions?
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A) Existence.
B) Rights and obligations. g g


C) Completeness.
D) Valuation.



2) Cutoff tests designed to detect purchases made before the end of the year that have been
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recorded in the subsequent year provide assurance about management's assertion of:
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A) presentation and disclosure. g g



B) completeness.
C) rights and obligations. g g



D) existence.



3) During an audit of an entity's stockholders' equity accounts, the auditor determines
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whether there are restrictions on retained earnings resulting from loans, agreements, or state law.
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This audit procedure most likely is intended to verify management's assertion of:
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A) existence or occurrence. g g


B) completeness.
C) valuation or allocation. g g



D) presentation and disclosure. g g




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,4) The confirmation of an account payable balance selected from the general ledger
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provides primary evidence regarding which management assertion?
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A) Completeness.
B) Valuation.
C) Allocation.
D) Existence.



5) What type of evidence would provide the highest level of assurance in an attestation
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engagement?
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A) Evidence secured solely from within the entity. g g g g g g



B) Evidence obtained from independent sources. g g g g


C) Evidence obtained indirectly. g g



D) Evidence obtained from multiple internal inquiries.
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6) Which of the following management assertions is an auditor most likely testing if the
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audit objective states that all inventory on hand is reflected in the ending inventory balance?
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A) The entity has rights to the inventory.
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B) Inventory is properly valued. g g g


C) Inventory is properly presented in the financial statements.
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D) Inventory is complete. g g




7) An auditor traces the serial numbers on equipment to a nonissuer's sub-ledger. Which of
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the following management assertions is supported by this test?
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A) Valuation and allocation. g g



B) Completeness.
C) Rights and obligations. g g


D) Presentation and disclosure. g g




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, 8) An auditor has substantial doubt about the entity's ability to continue as a going concern
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for a reasonable period of time because of negative cash flows and working capital deficiencies.
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Under these circumstances, the auditor would be most concerned about the:
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A) control environment factors that affect the organizational structure.
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B) correlation of detection risk and inherent risk. g g g g g g



C) effectiveness of the entity's internal control activities. g g g g g g


D) possible effects on the entity's financial statements.
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9) Which of the following types of audit evidence provides the
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reliability?
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A) Receivable confirmations received from the client's customers.
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B) Prenumbered receiving reports completed by the client's employees.
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C) Prior months' bank statements obtained from the client.
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D) Municipal property tax bills prepared in the client's name.
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10) Which of the following is a management assertion regarding account balances at the
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period end?
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A) Transactions and events that have been recorded have occurred and pertain to the
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entity.
B) Transactions and events have been recorded in the proper accounts.
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C) The entity holds or controls the rights to assets, and liabilities are obligations of the
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entity.
D) Amounts and other data related to the transactions and events have been recorded
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appropriately.



11) A practitioner is engaged to express an opinion on management's assertion that the square
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footage of a warehouse offered for sale is 150,000 square feet. The practitioner should refer to
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which of the following sources for professional guidance?
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