Topic: Tips for Learning Auditing TRUE AACSB: Communication AICPA BB: Industry AICPA FN: Decision Making Blooms: Understand Difficulty: 1 Easy Learning Objective: 01-02 Understand the
Trang 1Test Bank for Auditing and Assurance Services : A
Systematic Approach 9th Edition Messier, Glover, Prawitt
Chapter 01
An Introduction to Assurance and Financial Statement Auditing
True / False Questions
Trang 2are correct or not.
access to all of the financial information of the company
elements of auditing?
Trang 3
10 Which of the following statements about the study of auditing is NOT true?
whether or not they plan to become auditors
the relevance and reliability of information
analyze financial statements
techniques useful for gathering and analyzing evidence about others' assertions
Trang 4
1-4
fact, materially misstated
business entity's industry, should
statements?
asserted
Trang 518 In the context of agency theory, information asymmetry refers to the idea that
absentee owners (i.e stockholders)
on the fair presentation of financial statements?
and changes in cash flows without the expertise of an independent auditor
financial information shown in its financial statements
considered objective with respect to its own financial statements
management's stewardship in managing the affairs of the business
for an independent auditor to report on financial statements?
independent
using the statements
to ensure that financial statements are not misstated
Trang 61-6
having the external auditor appointed by the board of directors or elected by the stockholders?
regarding assertions " What is meant by "systematic process"?
transactions
to its online privacy policies
Trang 724 Which of the following statements is not true with respect to assurance, attest, and audit
services?
criteria
understanding of internal controls primarily to
Trang 8
1-8
preliminary audit plan
statements are accompanied by an auditor's unqualified report From this, the investor may conclude that
that all account balances are precisely correct
Trang 9
32 An auditor would issue an adverse opinion if
management
operations of the company
generally accepted accounting standards
applicable auditing standards
the auditor's best judgment
statements issued by the FASB
report?
Trang 10
1-10
transactions, and account balances
Sally would like to expand to two locations, but the bank has asked for an independent audit before it will provide financing Sally hires her brother-in-law, George Thompson, to perform the audit George has experience in auditing non-profit organizations and he decides to perform the audit the same way as his other audits After completing all the steps of the audit process, George issues an unqualified opinion indicating that he is certain that the company's financial statements contain no misstatements Comment on any potential problems with George's audit of Sally's Shoes
Trang 11
37 Explain the relationship between audit, attest and assurance services
your discussion how information asymmetry is reduced
and hiring a house inspector Name three desirable qualities of a house inspector or an auditor and discuss how those qualities apply to an auditor and why those qualities are important for an auditor to possess
Trang 12
1-12
"evidence," and "report."
to your first audit, your supervisor tests your knowledge and asks you to explain the term "scope"
in the context of a financial statement audit
Required:
A Provide a definition of scope
B Describe what influences an auditor's determination of scope
Trang 13
42 Why must an auditor assess materiality?
one way you might obtain direct evidence and one way you might obtain indirect evidence that the inventory account balance is fairly stated
Trang 14
1-14
paragraph in some circumstances Provide a brief (one sentence) description for each paragraph
Trang 15
Chapter 01 An Introduction to Assurance and Financial Statement
True / False Questions
Learning Objective: 01-01 Understand why studying auditing can be valuable to you whether or not you plan to become an
auditor; and why it is different from studying accounting
Topic: Tips for Learning Auditing
TRUE
AACSB: Communication AICPA BB: Industry AICPA FN: Decision Making Blooms: Understand Difficulty: 1 Easy
Learning Objective: 01-02 Understand the demand for auditing and be able to explain the desired characteristics of auditors and
audit services through an analogy to a house inspector and a house inspection service
Topic: The Demand for Auditing and Assurance
Trang 16Learning Objective: 01-02 Understand the demand for auditing and be able to explain the desired characteristics of auditors and
audit services through an analogy to a house inspector and a house inspection service
Topic: The Demand for Auditing and Assurance
TRUE
AACSB: Communication AICPA BB: Industry AICPA FN: Reporting Blooms: Apply Difficulty: 2 Medium
Learning Objective: 01-02 Understand the demand for auditing and be able to explain the desired characteristics of auditors and
audit services through an analogy to a house inspector and a house inspection service
Topic: The Demand for Auditing and Assurance
FALSE
AACSB: Communication AICPA BB: Industry AICPA FN: Reporting Blooms: Understand Difficulty: 1 Easy Learning Objective: 01-03 Understand the relationships among auditing; attestation; and assurance services
Topic: Auditing, Attest, and Assurance Services Defined
Trang 176 Auditing is a type of attest service
TRUE
AACSB: Communication AICPA BB: Industry AICPA FN: Reporting Blooms: Understand Difficulty: 1 Easy Learning Objective: 01-03 Understand the relationships among auditing; attestation; and assurance services
Learning Objective: 01-04 Know the basic definition of a financial statement audit
Topic: Auditing, Attest, and Assurance Services Defined
TRUE
AACSB: Communication AICPA BB: Critical Thinking AICPA FN: Decision Making
Blooms: Apply Difficulty: 2 Medium
Learning Objective: 01-06 Be able to explain why on most audit engagements an auditor tests only a sample of transactions that
occurred Topic: Sampling: Inferences Based on Limited Observations
Multiple Choice Questions
Trang 18
1-18
statements are correct or not
have access to all of the financial information of the company
AACSB: Communication AICPA BB: Industry AICPA FN: Decision Making Blooms: Understand Difficulty: 1 Easy
Learning Objective: 01-06 Be able to explain why on most audit engagements an auditor tests only a sample of transactions that
occurred Topic: Sampling: Inferences Based on Limited Observations
elements of auditing?
assurance
AACSB: Analytic AICPA BB: Critical Thinking AICPA FN: Risk Analysis
Blooms: Apply Difficulty: 2 Medium
Learning Objective: 01-06 Be able to explain why on most audit engagements an auditor tests only a sample of transactions that
occurred Topic: Sampling: Inferences Based on Limited Observations
Trang 1910 Which of the following statements about the study of auditing is NOT true?
whether or not they plan to become auditors
evaluate the relevance and reliability of information
to analyze financial statements
techniques useful for gathering and analyzing evidence about others' assertions
AACSB: Communication AICPA BB: Industry AICPA FN: Decision Making
Blooms: Analyze Difficulty: 2 Medium
Learning Objective: 01-01 Understand why studying auditing can be valuable to you whether or not you plan to become an
auditor; and why it is different from studying accounting
Topic: Tips for Learning Auditing
AACSB: Communication AICPA BB: Critical Thinking AICPA FN: Reporting Blooms: Remember Difficulty: 1 Easy Learning Objective: 01-03 Understand the relationships among auditing; attestation; and assurance services
Learning Objective: 01-04 Know the basic definition of a financial statement audit
Trang 20Topic: Auditing, Attest, and Assurance Services Defined
AACSB: Analytic AICPA BB: Critical Thinking AICPA FN: Measurement Blooms: Understand Difficulty: 1 Easy Learning Objective: 01-05 Understand three fundamental concepts that underlie financial statement auditing
Topic: Fundamental Concepts in Conducting a Financial Statement Audit
Trang 2114 Which of the following best describes the concept of audit risk?
in fact, materially misstated
AACSB: Analytic AICPA BB: Critical Thinking AICPA FN: Risk Analysis Blooms: Understand Difficulty: 2 Medium Learning Objective: 01-05 Understand three fundamental concepts that underlie financial statement auditing
Topic: Fundamental Concepts in Conducting a Financial Statement Audit
the business entity's industry, should
AACSB: Ethics AICPA BB: Industry AICPA FN: Decision Making
Blooms: Apply Difficulty: 2 Medium
Learning Objective: 01-07 Be able to describe the basic financial statement auditing process and the phases in which an audit is
carried out Learning Objective: 01-09 Understand why auditing demands logic; reasoning; and resourcefulness
Topic: Logic, Reason, and Resourcefulness
Topic: The Audit Process
Trang 221-22
statements?
AACSB: Communication AICPA BB: Legal AICPA FN: Reporting Blooms: Remember Difficulty: 1 Easy
Learning Objective: 01-07 Be able to describe the basic financial statement auditing process and the phases in which an audit is
carried out Topic: The Audit Process
asserted
AACSB: Communication AICPA BB: Resource Management AICPA FN: Decision Making
Blooms: Apply Difficulty: 2 Medium
Learning Objective: 01-07 Be able to describe the basic financial statement auditing process and the phases in which an audit is
carried out Topic: The Audit Process
Trang 2318 In the context of agency theory, information asymmetry refers to the idea that
absentee owners (i.e stockholders)
AACSB: Communication AICPA BB: Critical Thinking AICPA FN: Risk Analysis Blooms: Understand Difficulty: 1 Easy
Learning Objective: 01-02 Understand the demand for auditing and be able to explain the desired characteristics of auditors and
audit services through an analogy to a house inspector and a house inspection service
Topic: An Assurance Analogy Topic: The Demand for Auditing and Assurance
Trang 241-24
opinion on the fair presentation of financial statements?
and changes in cash flows without the expertise of an independent auditor
financial information shown in its financial statements
considered objective with respect to its own financial statements
on management's stewardship in managing the affairs of the business
AACSB: Reflective Thinking AICPA BB: Critical Thinking AICPA FN: Reporting Blooms: Apply Difficulty: 2 Medium
Learning Objective: 01-02 Understand the demand for auditing and be able to explain the desired characteristics of auditors and
audit services through an analogy to a house inspector and a house inspection service
Topic: An Assurance Analogy Topic: The Demand for Auditing and Assurance
Trang 2520 Which of the following best describes the fundamental, underlying reason for why there is demand for an independent auditor to report on financial statements?
independent
using the statements
responsibility to ensure that financial statements are not misstated
AACSB: Reflective Thinking AICPA BB: Critical Thinking AICPA FN: Reporting Blooms: Analyze Difficulty: 2 Medium
Learning Objective: 01-02 Understand the demand for auditing and be able to explain the desired characteristics of auditors and
audit services through an analogy to a house inspector and a house inspection service
Topic: The Demand for Auditing and Assurance
having the external auditor appointed by the board of directors or elected by the stockholders?
management
AACSB: Ethics AICPA BB: Legal AICPA FN: Risk Analysis Blooms: Analyze
Trang 261-26
regarding assertions " What is meant by "systematic process"?
AACSB: Analytic AICPA BB: Critical Thinking AICPA FN: Decision Making Blooms: Understand Difficulty: 2 Medium Learning Objective: 01-03 Understand the relationships among auditing; attestation; and assurance services
Learning Objective: 01-04 Know the basic definition of a financial statement audit
Topic: Auditing, Attest, and Assurance Services Defined
transactions
relating to its online privacy policies
AACSB: Communication AICPA BB: Industry AICPA FN: Decision Making Blooms: Understand Difficulty: 2 Medium Learning Objective: 01-03 Understand the relationships among auditing; attestation; and assurance services
Topic: Auditing, Attest, and Assurance Services Defined
Trang 2724 Which of the following statements is not true with respect to assurance, attest, and audit
services?
criteria
AACSB: Communication AICPA BB: Industry AICPA FN: Decision Making
Blooms: Apply Difficulty: 2 Medium Learning Objective: 01-03 Understand the relationships among auditing; attestation; and assurance services
Topic: Auditing, Attest, and Assurance Services Defined
AACSB: Analytic AICPA BB: Critical Thinking AICPA FN: Risk Analysis
Blooms: Apply Difficulty: 2 Medium Learning Objective: 01-05 Understand three fundamental concepts that underlie financial statement auditing
Topic: Fundamental Concepts in Conducting a Financial Statement Audit
Trang 281-28
an understanding of internal controls primarily to
AACSB: Analytic AICPA BB: Industry AICPA FN: Risk Analysis Blooms: Understand Difficulty: 2 Medium Learning Objective: 01-05 Understand three fundamental concepts that underlie financial statement auditing
Learning Objective: 01-07 Be able to describe the basic financial statement auditing process and the phases in which an audit is
carried out Topic: Fundamental Concepts in Conducting a Financial Statement Audit
Topic: The Audit Process
AACSB: Analytic AICPA BB: Critical Thinking AICPA FN: Measurement Blooms: Understand Difficulty: 2 Medium Learning Objective: 01-05 Understand three fundamental concepts that underlie financial statement auditing
Topic: Fundamental Concepts in Conducting a Financial Statement Audit
Trang 2928 Before accepting an engagement to audit a new entity, an auditor is required to
preliminary audit plan
AACSB: Communication AICPA BB: Industry AICPA FN: Decision Making Blooms: Remember Difficulty: 2 Medium
Learning Objective: 01-07 Be able to describe the basic financial statement auditing process and the phases in which an audit is
carried out Topic: The Audit Process
Trang 301-30
the statements are accompanied by an auditor's unqualified report From this, the investor may conclude that
satisfaction
and that all account balances are precisely correct
company
AACSB: Communication AICPA BB: Industry AICPA FN: Reporting Blooms: Understand Difficulty: 2 Medium
Learning Objective: 01-07 Be able to describe the basic financial statement auditing process and the phases in which an audit is
carried out Learning Objective: 01-08 Know what an audit report is and understand the nature of an unqualified report
Topic: Evaluate Results and Issue Audit Report
Topic: The Audit Process
AACSB: Analytic AICPA BB: Resource Management AICPA FN: Decision Making Blooms: Remember Difficulty: 2 Medium
Learning Objective: 01-07 Be able to describe the basic financial statement auditing process and the phases in which an audit is
carried out Topic: The Audit Process