Exam (elaborations)
Chapter 1 The Demand for Audit and Other Assurance Services
Auditing and Assurance Services 14th Edition Test Bank
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Auditing and Assurance Services, 14e (Arens)Chapter 1 The Demand for Audit and Other Assurance Services
Learning Objective 1-1
1)The Sarbanes-Oxley Act applies to which of the following
companies? A) All companies.
B) Privately held
companies. C) Public
companies.
D) All public companies and privately held companies with assets greater than $500
million.
Answer: C
Terms: Sarbanes-Oxley Act
Diff: Easy
Objective: LO 1-1
AACSB: Reflective thinking skills
Topic: SOX
2)Which of the following is considered audit evidence?
A)
Oral statements Written Auditor
made by
management Communications Observation
Y N N
B)
Oral statements Written Auditor
made by
management Communications Observation
N Y Y
C)
Oral statements Written Auditor
made by
management Communications Observation
Y Y Y
D)
Oral statements Written Auditor
made by
management Communications Observation
N N Y
Answer: C
Terms: Audit evidence
Diff: Moderate
Objective: LO 1-1
AACSB: Reflective thinking skills
1
Copyright © 2012 Pearson Education, Inc. publishing as Prentice Hall
, 3)Evidence is paramount to audit and attestation engagements. List the four basic
types of audit evidence.
Answer: The four types of audit and attestation evidence include:
1. Electronic and documentary data about economic transactions
2. Written and electronic communications with outsiders
3. Observations by the auditor
4. Oral testimony of the auditee (client)
Terms: Basic types if audit evidence
Diff: Easy
Objective: LO 1-1
AACSB: Reflective thinking skills
4)The criteria by which an auditor evaluates the information under audit may vary with
the information being audited.
A) True
B) False
Answer:
A
Terms: Criteria which an auditor evaluates information
Diff: Easy
Objective: LO 1-1
AACSB: Reflective thinking skills
5)The criteria used by an external auditor to evaluate published financial statements
are known as generally accepted auditing standards.
A) True
B) False
Answer:
B
Terms: Criteria used by external auditor to evaluate published financial statements
Diff: Easy
Objective: LO 1-1
AACSB: Reflective thinking skills
6)The Sarbanes-Oxley Act establishes standards related to the audits of privately held
companies.
A) True
B)False
Answer: B
Terms: Sarbanes-Oxley Act
Diff: Easy
Objective: LO 1-1
AACSB: Reflective thinking skills
Topic: SOX
2
Copyright © 2012 Pearson Education, Inc. publishing as Prentice Hall
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