auditing assurance services 5th edition louwers te
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8/31/23, 12:38 PM Auditing assurance services 5th edition louwers test bank
Chapter 02
Professional Standards
True / FFalse
alse Questions
1. Auditors may be independent in fact but not independent in appearance.
True False
2. Auditing Standards issued by the PCAOB are the sole source of guidance for audits
of public entities.
True False
3. Attestation standards provide guidance for a wide variety of engagements
different in scope than an audit.
True False
4. Generally accepted auditing standards must be followed on all audit
engagements.
True False
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5. The reporting principle relates to a firm's system of quality control criteria for
conducting an audit.
True False
6. Auditors cannot effectively satisfy the responsibilities principle requiring due care if
they have not also satisfied the performance principle.
True False
7. Substantive procedures performed by the audit team are most closely related to
the risk of material misstatement.
True False
8. Auditing procedures are the same as auditing standards.
True False
9. The concept of due care reflects the need to plan and perform the audit with an
appropriate level of professional skepticism.
True False
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10. Under the performance principle, auditors are required to provide absolute
assurance that the client's financial statements do not contain material
misstatements.
True False
11. The performance principle sets forth the quality criteria for conducting an audit.
True False
12. Auditors of public entities registered with the Securities and Exchange Commission
are required to register with the Public Company Accounting Oversight Board.
True False
13. Control risk is the probability that a material misstatement (error or fraud) could
occur and not be prevented or detected on a timely basis by the auditors'
substantive procedures.
True False
14. The word appropriateness refers to the number of transactions or components of
an account balance examined by auditors.
True False
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15. To be considered material, an item must be one that would influence the decision
of financial statement users.
True False
16. The contents of the auditors' report are guided by the performance principle of
GAAS.
True False
17. An unqualified opinion indicates that the financial statements present the entity's
financial condition, results of operations, and cash flows in conformity with GAAP.
True False
18. The auditors' report should either contain an expression of opinion on the financial
statements taken as a whole or an assertion to the effect that an opinion cannot be
expressed.
True False
19. Evidence is considered appropriate when it is both valid and relevant.
True False
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