TEST BANK FOR Auditing and Assurance Services 16th Edition by Alvin Arens |ISBN: 9780134435091| Guide A+

TEST BANK
Auditing and Assurance Services

Alvin Arens

16th Edition
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,Table of Contents
Part 1 – The Auditing Profession
1. The Demand for Audit and Other Assurance Services
2. The CPA Profession
3. Audit Reports
4. Professional Ethics
5. Legal Liability
Part 2 – The Audit Process
6. Audit Responsibilities and Objectives
7. Audit Evidence
8. Audit Planning and Materiality
9. Assessing the Risk of Material Misstatement
10. Assessing and Responding to Fraud Risks
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11. Internal Control and the COSO Framework
12. Assessing Control Risk and Reporting on Internal Controls
13. Overall Audit Strategy and Audit Program
Part 3 – Application of the Audit Process to the Sales &
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Collection Cycle
14. Audit of the Sales and Collection Cycle: Tests of Controls and
Substantive Tests of Transactions
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15. Audit Sampling for Tests of Controls and Substantive Tests of
Transactions
16. Completing the Tests in the Sales and Collection Cycle:
Accounts Receivable
17. Audit Sampling for Tests of Details of Balances
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Part 4 – Application of the Audit Process to Other Cycles
18. Audit of the Acquisition and Payment Cycle: Tests of Controls,
Substantive Tests of Transactions, and Accounts Payable
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19. Completing the Tests in the Acquisition and Payment Cycle:
Verification of Selected Accounts
20. Audit of the Payroll and Personnel Cycle
21. Audit of the Inventory and Warehousing Cycle
22. Audit of the Capital Acquisition and Repayment Cycle
23. Audit of Cash and Financial Instruments
Part 5 – Completing the Audit
24. Completing the Audit
Part 6 – Other Assurance & Non-assurance Services
25. Other Assurance Services
26. Internal and Governmental Financial Auditing and Operational
Auditing

,Auditing and Assurance Services, 16e (Arens/Elder/Beasley)
Chapter 1 The Demand for Audit and Other Assurance Services

1.1 Learning Objective 1-1

1) In the auditing process
A) the types and amounts of evidence remain constant from audit to audit.
B) the criteria for evaluating information will not vary depending on the information being
audited.
C) the audit report communicates the auditor's findings to users.
D) records are gathered by the auditor to determine whether the audited information is stated in
accordance with SEC standards.
Answer: C
Terms: Audit process
Diff: Moderate
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Objective: LO 1-1
AACSB: Reflective thinking

2) Which of the following is considered audit evidence?
A)
Oral statements Written Auditor
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made by management Communications Observation
Y N N
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B)
Oral statements Written Auditor
made by management Communications Observation
N Y Y

C)
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Oral statements Written Auditor
made by management Communications Observation
Y Y Y
C

D)
Oral statements Written Auditor
made by management Communications Observation
N N Y

Answer: C
Terms: Audit evidence
Diff: Easy
Objective: LO 1-1
AACSB: Reflective thinking

, 3) Which of the following can be used as a criteria for evaluating information being audited?
A) International Financial Reporting Standards (IFRS)
B) Generally Accepted Accounting Principles (GAAP)
C) Internal Revenue Code (IRC)
D) all of the above
Answer: D
Terms: Criteria by which an auditor evaluates information
Diff: Moderate
Objective: LO 1-1
AACSB: Reflective thinking

4) Evidence is paramount to audit and attestation engagements. List the four basic types of audit
evidence.
Answer: The four types of audit and attestation evidence include
1. Electronic and documentary data about transactions
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2. Written and electronic communications with outsiders
3. Observations by the auditor
4. Oral testimony of the auditee (client)
Terms: Basic types of audit evidence
Diff: Easy
Objective: LO 1-1
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AACSB: Reflective thinking

5) The criteria by which an auditor evaluates the information under audit may vary with the
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information being audited.
Answer: TRUE
Terms: Criteria by which an auditor evaluates information
Diff: Easy
Objective: LO 1-1
AACSB: Reflective thinking
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6) One criteria used by an external auditor to evaluate published financial statements is known as
generally accepted auditing standards.
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Answer: FALSE
Terms: Criteria used by external auditor to evaluate published financial statements
Diff: Easy
Objective: LO 1-1
AACSB: Reflective thinking

7) Auditors strive to maintain a high level of independence to keep the confidence of users
relying on their reports.
Answer: TRUE
Terms: Independence
Diff: Easy
Objective: LO 1-1
AACSB: Reflective thinking

8) To perform an audit, there must be information in a verifiable form and some criteria by
which the auditor can evaluate the information.