TEST BANK Auditing A Risk-Based Approach to Conducting a Quality Audit 12e by Zehms
Chapter - 01
1. The need for independent assurance arises because the interests of the users of information may be different
from the interests of those responsible for providing information.
a. True
b. False
ANSWER: True
POINTS: 1
QUESTION TYPE: True / False
HAS VARIABLES: False
LEARNING OBJECTIVES:AUD.ZEHMS.24.01.01 - Define financial statement auditing in relation to decision makers’
demands for reliable financial and internal control information
NATIONAL STANDARDS: United States - BUSPROG: Comprehension
STATE STANDARDS: United States - AK - AICPA BB-Critical thinking
DATE CREATED: 5/26/2023 4:48 AM
DATE MODIFIED: 5/26/2023 4:49 AM
2. A financial statement audit is a systematic process of objectively obtaining and evaluating evidence.
a. True
b. False
ANSWER: True
POINTS: 1
QUESTION TYPE: True / False
HAS VARIABLES: False
LEARNING OBJECTIVES: AUD.ZEHMS.24.01.01 - Define financial statement auditing in relation to decision makers’
demands for reliable financial and internal control information
NATIONAL STANDARDS: United States - BUSPROG: Comprehension
STATE STANDARDS: United States - AK - AICPA BB-Critical thinking
DATE CREATED: 5/26/2023 4:59 AM
DATE MODIFIED: 5/26/2023 5:00 AM
3. A bank using Milton Company's financial statements to evaluate Milton’s loan application is an example of a
user’s need for unbiased reporting.
a. True
b. False
ANSWER: True
POINTS: 1
QUESTION TYPE: True / False
HAS VARIABLES: False
LEARNING OBJECTIVES:AUD.ZEHMS.24.01.01 - Define financial statement auditing in relation to decision makers’
demands for reliable financial and internal control information
NATIONAL STANDARDS: United States - BUSPROG: Comprehension
STATE STANDARDS: United States - AK - AICPA BB-Critical thinking
DATE CREATED: 5/26/2023 5:01 AM
DATE MODIFIED: 5/26/2023 5:02 AM
4. An integrated audit requires the auditor to assess the effectiveness of internal controls.
Page 1
,Chapter 01
a. True
b. False
ANSWER: True
POINTS: 1
QUESTION TYPE: True / False
HAS VARIABLES: False
LEARNING OBJECTIVES:AUD.ZEHMS.24.01.01 - Define financial statement auditing in relation to decision makers’
demands for reliable financial and internal control information
NATIONAL STANDARDS: United States - BUSPROG: Comprehension
STATE STANDARDS: United States - AK - AICPA BB-Critical thinking
DATE CREATED: 5/26/2023 5:02 AM
DATE MODIFIED: 5/26/2023 5:03 AM
5. Auditors obtain and evaluate evidence regarding assertions about economic actions and events to verify the
accuracy of those assertions.
a. True
b. False
ANSWER: False
POINTS: 1
QUESTION TYPE: True / False
HAS VARIABLES: False
LEARNING OBJECTIVES:AUD.ZEHMS.24.01.01 - Define financial statement auditing in relation to decision makers’
demands for reliable financial and internal control information
NATIONAL STANDARDS: United States - BUSPROG: Comprehension
STATE STANDARDS: United States - AK - AICPA BB-Critical thinking
DATE CREATED: 5/26/2023 5:03 AM
DATE MODIFIED: 5/26/2023 5:04 AM
6. Auditing is the process of verifying and assuring the complete accuracy of the financial statements.
a. True
b. False
ANSWER: False
POINTS: 1
QUESTION TYPE: True / False
HAS VARIABLES: False
LEARNING OBJECTIVES: AUD.ZEHMS.24.01.01 - Define financial statement auditing in relation to decision makers’
demands for reliable financial and internal control information
NATIONAL STANDARDS: United States - BUSPROG: Comprehension
STATE STANDARDS: United States - AK - AICPA BB-Critical thinking
DATE CREATED: 5/26/2023 5:04 AM
DATE MODIFIED: 5/26/2023 5:05 AM
7. Management may have incentives to present biased financial information, but the various users of the
statements are likely to have the same interest in the financial information.
a. True
Page 2
,Chapter 01
b. False
ANSWER: False
POINTS: 1
QUESTION TYPE: True / False
HAS VARIABLES: False
LEARNING OBJECTIVES:AUD.ZEHMS.24.01.01 - Define financial statement auditing in relation to decision makers’
demands for reliable financial and internal control information
NATIONAL STANDARDS: United States - BUSPROG: Comprehension
STATE STANDARDS: United States - AK - AICPA BB-Critical thinking
DATE CREATED: 5/26/2023 5:05 AM
DATE MODIFIED: 5/26/2023 5:06 AM
8. Auditing exists because users need unbiased information on which to assess management performance and
make economic decisions.
a. True
b. False
ANSWER: True
POINTS: 1
QUESTION TYPE: True / False
HAS VARIABLES: False
LEARNING OBJECTIVES:AUD.ZEHMS.24.01.01 - Define financial statement auditing in relation to decision makers’
demands for reliable financial and internal control information
NATIONAL STANDARDS: United States - BUSPROG: Comprehension
STATE STANDARDS: United States - AK - AICPA BB-Critical thinking
DATE CREATED: 5/26/2023 5:06 AM
DATE MODIFIED: 5/26/2023 5:07 AM
9. Users rely on the auditors' independent assessment of financial statement presentation because few users
have direct knowledge of the company's operations.
a. True
b. False
ANSWER: True
POINTS: 1
QUESTION TYPE: True / False
HAS VARIABLES: False
LEARNING OBJECTIVES:AUD.ZEHMS.24.01.01 - Define financial statement auditing in relation to decision makers’
demands for reliable financial and internal control information
NATIONAL STANDARDS: United States - BUSPROG: Comprehension
STATE STANDARDS: United States - AK - AICPA BB-Critical thinking
DATE CREATED: 5/26/2023 5:07 AM
DATE MODIFIED: 5/26/2023 5:08 AM
10. If the auditor has no reservations about management’s financial statements, then the auditor will issue a
qualified opinion.
a. True
Page 3
, Chapter 01
b. False
ANSWER: False
POINTS: 1
QUESTION TYPE: True / False
HAS VARIABLES: False
LEARNING OBJECTIVES:AUD.ZEHMS.24.01.01 - Define financial statement auditing in relation to decision makers’
demands for reliable financial and internal control information
NATIONAL STANDARDS: United States - BUSPROG: Comprehension
STATE STANDARDS: United States - AK - AICPA BB-Critical thinking
DATE CREATED: 5/26/2023 5:08 AM
DATE MODIFIED: 5/26/2023 5:09 AM
11. Independence is often referred to as the cornerstone of the auditing profession.
a. True
b. False
ANSWER: True
POINTS: 1
QUESTION TYPE: True / False
HAS VARIABLES: False
LEARNING OBJECTIVES: AUD.ZEHMS.24.01.01 - Define financial statement auditing in relation to decision makers’
demands for reliable financial and internal control information
NATIONAL STANDARDS: United States - BUSPROG: Comprehension
STATE STANDARDS: United States - AK - AICPA BB-Critical thinking
DATE CREATED: 5/26/2023 5:09 AM
DATE MODIFIED: 5/26/2023 5:11 AM
12. Auditors generally need quantitative and mathematical skills more than they need communication and
leadership skills.
a. True
b. False
ANSWER: False
POINTS: 1
QUESTION TYPE: True / False
HAS VARIABLES: False
LEARNING OBJECTIVES:AUD.ZEHMS.24.01.01 - Define financial statement auditing in relation to decision makers’
demands for reliable financial and internal control information
NATIONAL STANDARDS: United States - BUSPROG: Comprehension
STATE STANDARDS: United States - AK - AICPA BB-Critical thinking
DATE CREATED: 5/26/2023 5:11 AM
DATE MODIFIED: 5/26/2023 5:12 AM
13. The overall objective of an audit is to guarantee the financial statements are free of misstatement.
a. True
b. False
ANSWER: False
Page 4
Chapter - 01
1. The need for independent assurance arises because the interests of the users of information may be different
from the interests of those responsible for providing information.
a. True
b. False
ANSWER: True
POINTS: 1
QUESTION TYPE: True / False
HAS VARIABLES: False
LEARNING OBJECTIVES:AUD.ZEHMS.24.01.01 - Define financial statement auditing in relation to decision makers’
demands for reliable financial and internal control information
NATIONAL STANDARDS: United States - BUSPROG: Comprehension
STATE STANDARDS: United States - AK - AICPA BB-Critical thinking
DATE CREATED: 5/26/2023 4:48 AM
DATE MODIFIED: 5/26/2023 4:49 AM
2. A financial statement audit is a systematic process of objectively obtaining and evaluating evidence.
a. True
b. False
ANSWER: True
POINTS: 1
QUESTION TYPE: True / False
HAS VARIABLES: False
LEARNING OBJECTIVES: AUD.ZEHMS.24.01.01 - Define financial statement auditing in relation to decision makers’
demands for reliable financial and internal control information
NATIONAL STANDARDS: United States - BUSPROG: Comprehension
STATE STANDARDS: United States - AK - AICPA BB-Critical thinking
DATE CREATED: 5/26/2023 4:59 AM
DATE MODIFIED: 5/26/2023 5:00 AM
3. A bank using Milton Company's financial statements to evaluate Milton’s loan application is an example of a
user’s need for unbiased reporting.
a. True
b. False
ANSWER: True
POINTS: 1
QUESTION TYPE: True / False
HAS VARIABLES: False
LEARNING OBJECTIVES:AUD.ZEHMS.24.01.01 - Define financial statement auditing in relation to decision makers’
demands for reliable financial and internal control information
NATIONAL STANDARDS: United States - BUSPROG: Comprehension
STATE STANDARDS: United States - AK - AICPA BB-Critical thinking
DATE CREATED: 5/26/2023 5:01 AM
DATE MODIFIED: 5/26/2023 5:02 AM
4. An integrated audit requires the auditor to assess the effectiveness of internal controls.
Page 1
,Chapter 01
a. True
b. False
ANSWER: True
POINTS: 1
QUESTION TYPE: True / False
HAS VARIABLES: False
LEARNING OBJECTIVES:AUD.ZEHMS.24.01.01 - Define financial statement auditing in relation to decision makers’
demands for reliable financial and internal control information
NATIONAL STANDARDS: United States - BUSPROG: Comprehension
STATE STANDARDS: United States - AK - AICPA BB-Critical thinking
DATE CREATED: 5/26/2023 5:02 AM
DATE MODIFIED: 5/26/2023 5:03 AM
5. Auditors obtain and evaluate evidence regarding assertions about economic actions and events to verify the
accuracy of those assertions.
a. True
b. False
ANSWER: False
POINTS: 1
QUESTION TYPE: True / False
HAS VARIABLES: False
LEARNING OBJECTIVES:AUD.ZEHMS.24.01.01 - Define financial statement auditing in relation to decision makers’
demands for reliable financial and internal control information
NATIONAL STANDARDS: United States - BUSPROG: Comprehension
STATE STANDARDS: United States - AK - AICPA BB-Critical thinking
DATE CREATED: 5/26/2023 5:03 AM
DATE MODIFIED: 5/26/2023 5:04 AM
6. Auditing is the process of verifying and assuring the complete accuracy of the financial statements.
a. True
b. False
ANSWER: False
POINTS: 1
QUESTION TYPE: True / False
HAS VARIABLES: False
LEARNING OBJECTIVES: AUD.ZEHMS.24.01.01 - Define financial statement auditing in relation to decision makers’
demands for reliable financial and internal control information
NATIONAL STANDARDS: United States - BUSPROG: Comprehension
STATE STANDARDS: United States - AK - AICPA BB-Critical thinking
DATE CREATED: 5/26/2023 5:04 AM
DATE MODIFIED: 5/26/2023 5:05 AM
7. Management may have incentives to present biased financial information, but the various users of the
statements are likely to have the same interest in the financial information.
a. True
Page 2
,Chapter 01
b. False
ANSWER: False
POINTS: 1
QUESTION TYPE: True / False
HAS VARIABLES: False
LEARNING OBJECTIVES:AUD.ZEHMS.24.01.01 - Define financial statement auditing in relation to decision makers’
demands for reliable financial and internal control information
NATIONAL STANDARDS: United States - BUSPROG: Comprehension
STATE STANDARDS: United States - AK - AICPA BB-Critical thinking
DATE CREATED: 5/26/2023 5:05 AM
DATE MODIFIED: 5/26/2023 5:06 AM
8. Auditing exists because users need unbiased information on which to assess management performance and
make economic decisions.
a. True
b. False
ANSWER: True
POINTS: 1
QUESTION TYPE: True / False
HAS VARIABLES: False
LEARNING OBJECTIVES:AUD.ZEHMS.24.01.01 - Define financial statement auditing in relation to decision makers’
demands for reliable financial and internal control information
NATIONAL STANDARDS: United States - BUSPROG: Comprehension
STATE STANDARDS: United States - AK - AICPA BB-Critical thinking
DATE CREATED: 5/26/2023 5:06 AM
DATE MODIFIED: 5/26/2023 5:07 AM
9. Users rely on the auditors' independent assessment of financial statement presentation because few users
have direct knowledge of the company's operations.
a. True
b. False
ANSWER: True
POINTS: 1
QUESTION TYPE: True / False
HAS VARIABLES: False
LEARNING OBJECTIVES:AUD.ZEHMS.24.01.01 - Define financial statement auditing in relation to decision makers’
demands for reliable financial and internal control information
NATIONAL STANDARDS: United States - BUSPROG: Comprehension
STATE STANDARDS: United States - AK - AICPA BB-Critical thinking
DATE CREATED: 5/26/2023 5:07 AM
DATE MODIFIED: 5/26/2023 5:08 AM
10. If the auditor has no reservations about management’s financial statements, then the auditor will issue a
qualified opinion.
a. True
Page 3
, Chapter 01
b. False
ANSWER: False
POINTS: 1
QUESTION TYPE: True / False
HAS VARIABLES: False
LEARNING OBJECTIVES:AUD.ZEHMS.24.01.01 - Define financial statement auditing in relation to decision makers’
demands for reliable financial and internal control information
NATIONAL STANDARDS: United States - BUSPROG: Comprehension
STATE STANDARDS: United States - AK - AICPA BB-Critical thinking
DATE CREATED: 5/26/2023 5:08 AM
DATE MODIFIED: 5/26/2023 5:09 AM
11. Independence is often referred to as the cornerstone of the auditing profession.
a. True
b. False
ANSWER: True
POINTS: 1
QUESTION TYPE: True / False
HAS VARIABLES: False
LEARNING OBJECTIVES: AUD.ZEHMS.24.01.01 - Define financial statement auditing in relation to decision makers’
demands for reliable financial and internal control information
NATIONAL STANDARDS: United States - BUSPROG: Comprehension
STATE STANDARDS: United States - AK - AICPA BB-Critical thinking
DATE CREATED: 5/26/2023 5:09 AM
DATE MODIFIED: 5/26/2023 5:11 AM
12. Auditors generally need quantitative and mathematical skills more than they need communication and
leadership skills.
a. True
b. False
ANSWER: False
POINTS: 1
QUESTION TYPE: True / False
HAS VARIABLES: False
LEARNING OBJECTIVES:AUD.ZEHMS.24.01.01 - Define financial statement auditing in relation to decision makers’
demands for reliable financial and internal control information
NATIONAL STANDARDS: United States - BUSPROG: Comprehension
STATE STANDARDS: United States - AK - AICPA BB-Critical thinking
DATE CREATED: 5/26/2023 5:11 AM
DATE MODIFIED: 5/26/2023 5:12 AM
13. The overall objective of an audit is to guarantee the financial statements are free of misstatement.
a. True
b. False
ANSWER: False
Page 4
