Test Bank for Auditing and Assurance Services, 18th Edition By Alvin A. Arens, Randal J. Elder, Mark S. Beasley, Chris E. Hogan
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Course
Auditing and Assurance Services
Institution
Auditing And Assurance Services
Test Bank for Auditing and Assurance Services, 18th Edition By Alvin A. Arens, Randal J. Elder, Mark S. Beasley, Chris E. Hogan. Full Chapters included Chapter 1 to 26. 1.The Demand for Audit and Other Assurance Services. 2.The CPA Profession. 3.Audit Reports. 4.Professional Ethics. 5.Legal Liabili...
Auditing and Assurance Services, 18e (Arens) ANSWERS INCLUDED
Chapter 1 The Demand for Audit and Other Assurance Services
1.1 Learning Objective 1-1 ALL CHAPTERS
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.
M
Answer: C
Terms: Audit process
ED
Difficulty: Moderate
Objective: LO 1-1
AACSB: Reflective thinking
C
2) Which of the following is considered audit evidence?
O
A)
Oral statements
N
made by Written Auditor
management Communications Observations
N
Y N N
O
B)
Oral statements
IS
made by Written Auditor
management Communications Observations
SE
N Y Y
C)
Oral statements
U
made by Written Auditor
management Communications Observations
R
Y Y Y
D)
Oral statements
made by Written Auditor
management Communications Observations
N N Y
Answer: C
Terms: Audit evidence
Difficulty: Easy
Objective: LO 1-1
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)
C) Internal Revenue Code (IRC)
D) all of the above
Answer: D
Terms: Criteria by which an auditor evaluates information
Difficulty: Moderate
Objective: LO 1-1
AACSB: Reflective thinking
M
4) Auditors do not provide which of the following?
A) assurance on financial statements
ED
B) assurance on the effectiveness of system of internal controls over financial reporting
C) assurance on corporate sustainability reports
D) absolute assurance on the financial statements including assuming responsibility for them
Answer: D
C
Terms: Nature of Objectives of Auditing
Difficulty: Moderate
O
Objective: LO 1-1
AACSB: Reflective thinking
N
5) The accumulation and evaluation of evidence about information to determine and report on
N
the degree of correspondence between the information and some established criteria is defined as
A) accounting.
O
B) financial reporting.
C) tax reporting.
IS
D) auditing.
Answer: D
SE
Terms: Definition of auditing
Difficulty: Moderate
Objective: LO 1-1
U
AACSB: Reflective thinking
R
6) The criteria by which an auditor evaluates the information under audit may vary with the
information being audited.
Answer: TRUE
Terms: Criteria by which an auditor evaluates information
Difficulty: Easy
Objective: LO 1-1
AACSB: Reflective thinking
7) One criterion used by an external auditor to evaluate published financial statements is known
as generally accepted auditing standards.
Answer: FALSE
Terms: Criteria used by external auditor to evaluate published financial statements
Difficulty: Easy
Objective: LO 1-1
AACSB: Reflective thinking
8) Auditors strive to maintain a high level of independence to keep the confidence of users
relying on their reports.
Answer: TRUE
Terms: Independence
M
Difficulty: Easy
Objective: LO 1-1
ED
AACSB: Reflective thinking
9) To perform an audit, there must be information in a verifiable form and some criteria by
which the auditor can evaluate the information.
C
Answer: TRUE
Terms: Independence
O
Difficulty: Easy
Objective: LO 1-1
N
AACSB: Reflective thinking
N
10) An auditor must be competent and have an independent mental attitude.
Answer: TRUE
O
Terms: Criteria used by external auditor to evaluate published financial statements
Difficulty: Easy
IS
Objective: LO 1-1
AACSB: Reflective thinking
SE
11) Auditors are not allowed to audit subjective information like the effectiveness of computer
controls or the efficiency of manufacturing-related operations.
U
Answer: FALSE
Terms: Information and Established Criteria for the Performance of Audits
R
Difficulty: Moderate
Objective: LO 1-1
AACSB: Reflective thinking
12) In an audit of system of internal controls over financial reporting, the auditor may rely upon
the Internal Control - Integrated Framework issued by COSO.
Answer: TRUE
Terms: Information and Established Criteria for the Performance of Audits
Difficulty: Moderate
Objective: LO 1-1
AACSB: Reflective thinking
4
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