Test Bank for Auditing and Assurance Services, 18th edition by Arens Alvin, Elder Randal, Beasley Mark & Hogan Chris, All Chapters 1-23 LATEST

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,Auditing rand rAssurance rServices, r18e r(Arens/Elder/Beasley)
rChapterr1 r The rDemand rforrAuditrand rOtherrA ssurance rServices




Learning rObjective r1-1

1) TherSarbanes-OxleyrAct rapplies rto rwhichrofrtherfollowing rcompanies?
A) Allrcompanies
B) Privatelyrheld rcompanies
C) Publicrcompanies
D) All rpublic rcompanies rand rprivatelyrheld rcompanies rwith rassets rgreaterrthan r$500 rmillion
rAnswer: r C

Terms: rSarbanes-OxleyAct
rDiff: r Easy

Objective: r LO r1-1
AACSB:rReflectivethinkingskills
rTopic: r SOX




2) Whichrofrtherfollowingris rconsidered raudit revidence?
rA)

Oralrstatements Written Auditor
rmadebymanagement rCommunications rObservation

Y N N

B)
Oralrstatements Written Auditor
r madebymanagement r Communications Observatio
rn

N Y Y

C)
Oralrstatements Written Auditor
r madebymanagement r Communications r Observation
Y Y Y

D)
Oralrstatements Written Auditor
r madebymanagement r Communications r Observation
N N Y

Answer: r C
Terms: rAuditevidence
rDiff: rModerate

rObjective: r LO r1-1

AACSB: r Reflectiverthinking rskills




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,3) Evidencerisrparamount rtoraudit randrattestationrengagements. rList rtherfourrbasicrt ypesrofraudit
revidence.

Answer: r Therfourrt ypes rofraudit rand rattestation revidencerinclude:
1. Electronicrand rdocumentaryrdata rabout rtransactions
2. Writtenrand relectronicrcommunications rwith routsiders
3. Observations rbyrthe rauditor
4. Oraltestimonyoftheauditee(client)
rTerms: rBasic rtypes rof raudit revidence

rDiff: r Easy

Objective: r LO r1-1
AACSB: r Reflectiverthinking rskills

4) Thercriteriarbywhich ranrauditor revaluatesrtherinformationrunderraudit rmayrvaryrwithrthe
r information r being r audited.

A) True
B) False
rAnswer:

rA

Terms:rCriteriarwhichran rauditorrevaluates rinformation
rDiff: r Easy

Objective: r LO r1-1
AACSB: r Reflectiverthinking rskills

5) Thercriteriarusedrbyranrexternalrauditorrtorevaluaterpublished rfinancialrstatementsrarerknownras
rgenerally raccepted rauditing rstandards.

A) True
B) False
rAnswer:

rB

Terms: r Criteriarusedrbyrexternalrauditorrto revaluaterpublishedrfinancialrstatements rDiff:
r Easy

Objective: r LO r1-1
AACSB: r Reflectiverthinking rskills

6) TherSarbanes-OxleyrAct restablishesrstandardsrrelatedrtortherauditsrofrprivatelyheld
rcompanies.

A) True
B) False
rAnswer:

rB

Terms: rSarbanes-OxleyAct
rDiff: r Easy

Objective: r LO r1-1
AACSB:rReflectivethinkingskills
rTopic: r SOX




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, 7) TherSarbanes-OxleyrAct risrwidelyviewedras rhavingrusheredrinrsweepingrchanges rtorauditing
rand r financial rreporting.

A) True
B) False
rAnswer:

rA

Terms: rSarbanes-OxleyAct
rDiff: r Easy

Objective: r LO r1-1
AACSB:rReflectivethinkingskills
rTopic: r SOX




8) Anrauditor rmust rbe rcompetent rand rhave ran rindependent rmental rattitude.
A) True
B) False
rAnswer:

rA

Terms: r Competenceand rindependentmentalattitude
rDiff: r Easy

Objective: r LO r1-1
AACSB:rReflectivethinkingskills

r Learning rObjective r1-2

1) Recording, rclassifying, randrsummarizingreconomicreventsrinrarlogicalrmanner rforrtherpurpose rof
rproviding r financial r information r for rdecision r making r is rcommonly rcalled:

A) finance.
B) auditing.
C) accounting.
D) economics.
rAnswer: r C

Terms: r Recording,rclassifying,randsummarizingreconomicrevents
rDiff: r Easy

Objective: r LO r1-2
AACSB: r Reflectiverthinking rskills

2) Anraccountant:
A) must rpossessrexpertise rin rtheraccumulationrofraudit revidence.
B) must rdecide rthernumberrand rtypes rofritems rto rtest.
C) must rhaveranrunderstandingro frtherprinciples rand rrules rthat rprovidertherbasis rforrpreparingrthe
raccounting rinformation.

D) mustrberarCPA.
rAnswer: r C

Terms: r Distinguishesauditorsfromaccountants
rDiff: r Moderate

Objective: r LO r1-2
AACSB: r Reflectiverthinking rskills

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