Test Bank — Auditing and Assurance Services, 17th Edition — Alvin A. Arens, Randal J. Elder, Mark S. Beasley & Chris E. Hogan — ISBN 9780135635131

Auditing and Assurance Services
TU
– 17th Edition


TEST BANK
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Alvin A. Arens, Randal J. Elder, Mark S. Beasley &

Chris E. Hogan
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Complete Test Bank for Instructors and
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Students
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© Alvin A. Arens, Randal J. Elder, Mark S. Beasley & Chris E. Hogan

All rights reserved. Reproduction or distribution without permission is prohibited.
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, Auditing and Assurance Services, 17e (Arens/Elder/Beasley)
Chapter 1 The Demand for Audit and Other Assurance Services
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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
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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
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accordance with SEC standards.
Answer: C
Terms: Audit process
Difficulty: Moderate
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Objective: LO 1-1
AACSB: Reflective thinking

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

B)
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Oral statements Written Auditor
made by management Communications Observations
N Y Y

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

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

Answer: C
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Terms: Audit evidence
Difficulty: Easy
Objective: LO 1-1
AACSB: Reflective thinking
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, 3) Which of the following can be used as a criterion for evaluating information being audited?
A) International Financial Reporting Standards (IFRS)
B) Generally Accepted Accounting Principles (GAAP)
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C) Internal Revenue Code (IRC)
D) all of the above
Answer: D
Terms: Criteria by which an auditor evaluates information
Difficulty: Moderate
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Objective: LO 1-1
AACSB: Reflective thinking
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4) Auditors do not provide which of the following?
A) assurance on financial statements
B) assurance on the effectiveness of internal controls over financial reporting
C) assurance on corporate sustainability reports
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D) absolute assurance on the financial statements including assuming responsibility for them
Answer: D
Terms: Nature of Objectives of Auditing
Difficulty: Moderate
Objective: LO 1-1
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AACSB: Reflective thinking

5) The accumulation and evaluation of evidence about information to determine and report on
the degree of correspondence between the information and some established criteria is defined as
A) accounting.
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B) financial reporting.
C) tax reporting.
D) auditing.
Answer: D
Terms: Definition of auditing
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Difficulty: Moderate
Objective: LO 1-1
AACSB: Reflective thinking

6) The criteria by which an auditor evaluates the information under audit may vary with the
information being audited.
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Answer: TRUE
Terms: Criteria by which an auditor evaluates information
Difficulty: Easy
Objective: LO 1-1
AACSB: Reflective thinking
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, 7) One criterion used by an external auditor to evaluate published financial statements is known
as generally accepted auditing standards.
Answer: FALSE
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Terms: Criteria used by external auditor to evaluate published financial statements
Difficulty: Easy
Objective: LO 1-1
AACSB: Reflective thinking
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8) Auditors strive to maintain a high level of independence to keep the confidence of users
relying on their reports.
Answer: TRUE
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Terms: Independence
Difficulty: Easy
Objective: LO 1-1
AACSB: Reflective thinking
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9) To perform an audit, there must be information in a verifiable form and some criteria by
which the auditor can evaluate the information.
Answer: TRUE
Terms: Independence
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Difficulty: Easy
Objective: LO 1-1
AACSB: Reflective thinking

10) An auditor must be competent and have an independent mental attitude.
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Answer: TRUE
Terms: Criteria used by external auditor to evaluate published financial statements
Difficulty: Easy
Objective: LO 1-1
AACSB: Reflective thinking
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11) Auditors are not allowed and should not audit subjective information like the effectiveness
of computer controls or the efficiency of manufacturing-related operations.
Answer: FALSE
Terms: Information and Established Criteria for the Performance of Audits
Difficulty: Moderate
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Objective: LO 1-1
AACSB: Reflective thinking

12) In an audit of internal controls over financial reporting, the auditor may rely upon Internal
Control - Integrated Framework issued by COSO.
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Answer: TRUE
Terms: Information and Established Criteria for the Performance of Audits
Difficulty: Moderate
Objective: LO 1-1
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AACSB: Reflective thinking


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