File Name: auditing and assurance services test bank .zip
- 110 Test Bank for Auditing and Assurance Services 5th Edition Louwers
- Auditing Assurance Services Test Bank
True False, 6 Auditing is a type of attest service.
110 Test Bank for Auditing and Assurance Services 5th Edition Louwers
List the four basic types of audit evidence. Answer: The four types of audit and attestation evidence include: 1. Electronic and documentary data about transactions 2. Written and electronic communications with outsiders 3. Observations by the auditor 4. Oral testimony of the auditee client Terms: Basic types of audit evidence Diff: Easy Objective: LO AACSB: Reflective thinking skills 4 The criteria by which an auditor evaluates the information under audit may vary with the information being audited.
B auditing. C accounting. D economics. B must decide the number and types of items to test. C must have an understanding of the principles and rules that provide the basis for preparing the accounting information. D must be a CPA. B determining if fraud has occurred. C determining if taxable income has been calculated correctly. D analyzing the financial information to be sure that it complies with government requirements. B auditor's education beyond the Bachelor's degree.
D auditor's accumulation and interpretation of evidence related to a company's financial statements. What additional expertise must an auditor possess beyond that of an accountant?
Answer: The role of accountants is to record, classify, and summarize economic events in a logical manner for the purpose of providing financial information for decision making. To provide relevant information, accountants must have a thorough understanding of the principles and rules that provide the basis for preparing the accounting information. In addition, accountants must develop a system to ensure that the entity's economic events are properly recorded on a timely basis and at a reasonable cost.
The role of auditors is to determine whether the recorded information prepared by accountants properly reflects the economic events that occurred during the accounting period. Because U. In addition to understanding accounting, the auditor must possess expertise in the accumulation and interpretation of audit evidence. It is this expertise that distinguishes auditors from accountants.
Determining the proper audit procedures, deciding the number and types of items to test, and evaluating the results are unique to the auditor.
B the audit committee of a private company hires the independent auditor. C the client provides capital to the external users. D the external users can rely upon the auditor's report to reduce information risk. B have an independent audit. C verify all information individually. D verify the information with management.
Answer: Information risk reflects the possibility that the information upon which the business risk decision was made was inaccurate. B attestation service.
C assurance service. D tax service. B audits of historical financial information, verifications of historical financial information, and attestations regarding internal controls. C reviews of historical financial information, verifications of future financial information, and attestations regarding internal controls. D audits of historical financial information, reviews of controls related to investments, and verifications of historical financial information. D Each service provides the same level of assurance on financial statements.
Which of the following statements most accurately describes SysTrust services? A SysTrust services provide assurance on business processes, transaction integrity and information processes. B SysTrust services provide assurance on system reliability in critical areas such as security and data integrity.
C SysTrust services provide assurance on internal control over financial reporting. D SysTrust services provide assurance as to whether accounting personnel are following procedures prescribed by the company controller. Discuss the similarities and differences between these two types of attestation services. Which type provides the least assurance? Answer: In both the review and audit of the historical financial statements, management asserts that the statements are fairly stated in accordance with accounting standards.
The CPA provides a lower level of assurance for reviews of financial statements compared to the high level for audits, therefore less evidence is needed. A review is often adequate to meet financial statement users' needs.
It can be provided by a CPA firm at a much lower fee than an audit because less evidence is needed. An audit is the most common assurance service provided by CPA firms.
Publicly traded companies in the U. Many nonpublic companies have a review to limit auditor fees. Answer: For an audit of internal control over financial reporting, management asserts that internal controls have been developed and implemented following well established criteria.
Section of the Sarbanes-Oxley Act requires public companies to report management's assessment of the effectiveness of internal control over financial reporting. The Act also requires auditors for larger public companies to attest to the effectiveness of internal control over financial reporting. This evaluation, which is integrated with the audit of financial statements, increases user confidence about future financial reporting, because effective internal controls reduce the likelihood of future misstatements in the financial statements.
What is a SysTrust engagement? How do they differ? Answer: WebTrust is a service provided by a CPA where the CPA provides assurance that the Web Site owner has met established criteria related to business practices, transaction integrity, and information processes.
SysTrust is a service provided by a CPA to evaluate and test a system reliability in areas such as security and data integrity. There are five principles that must be addressed on a SysTrust engagement: security, availability, processing integrity, online privacy, and confidentiality. WebTrust is primarily designed to provide assurance to third party users of a Web site. SysTrust provides assurance to management, the board of directors or third parties about the reliability of information systems used to generate real-time information.
B determine if the auditee is in compliance with GAAP. C make recommendations for improving performance. D report on the entity's relative success in attaining profit maximization. A Operational audit B Compliance audit C Financial statement audit D Production audit Answer: A Terms: Examination of part of an organization's procedures and method to evaluate efficiency and effectiveness Diff: Moderate Objective: LO AACSB: Reflective thinking skills 3 An audit to determine whether an entity is following specific procedures or rules set down by some higher authority is classified as a n : A audit of financial statements.
B compliance audit. C operational audit. D production audit. A Presentation of financial statements in accordance with generally accepted accounting principles B Compliance with government regulations C Efficiency and effectiveness of operations D All three of the above are equally difficult.
Give an example of each type. The differences between each type of audit are the information being examined and the criteria used to evaluate the information.
An operational audit evaluates the efficiency and effectiveness of any part of an organization's operating procedures and methods. At completion of an operational audit, management normally expects recommendations for improving operations. In operational auditing, the reviews are not limited to accounting. It is more difficult to objectively evaluate whether the efficiency and effectiveness of operations meets established criteria than it is for compliance and financial statement audits.
Also, establishing criteria for evaluating the information in an operational audit is extremely subjective. Thus, operational auditing is more like management consulting than what is usually considered auditing.
A compliance audit is conducted to determine whether the auditee is following specific procedures, rules, or regulations set by some higher authority. Results of compliance audits are typically reported to management, like in the operational audits, rather than to outside users as is done with financial statement audits. A financial statement audit is conducted to determine whether financial statements are stated in accordance with specified criteria, normally the U.
Auditors not only focus on accounting transactions, but also focus on an integrated approach in which both the risk of misstatements and the operating controls are considered. The auditor must have a thorough understanding of the entity and its environment.
An example of a financial statement audit would be the annual audit of IBM Corporation, in which the external auditors examine IBM's financial statements to determine the degree of correspondence between those financial statements and generally accepted accounting principles. An example of an operational audit would be an internal auditor's evaluation of whether the company's computerized payroll-processing system is operating efficiently and effectively.
An example of a compliance audit would be an IRS auditor's examination of an entity's federal tax return to determine the degree of compliance with the Internal Revenue Code. Detail the information and criteria that would be used when: A an independent CPA firm audits a company's historical financial statements.
B an Internal Revenue Service auditor audits that same company's tax return. C an internal auditor performs an operational audit to evaluate whether the company's computerized payroll processing system is operating efficiently and effectively. Answer: A The information used by a CPA firm in a financial statement audit is the financial information in the company's financial statements.
The most commonly used criteria are applicable U. B The information used by an IRS auditor is the financial information in the company's federal tax return. The criteria used are the internal revenue code and interpretations. C The information used by an internal auditor when performing an operational audit of the payroll system could include various items such as the number of errors made, costs incurred by the payroll department, and number of payroll records processed each month.
The criteria would consist of company standards for departmental efficiency and effectiveness. Learning Objective 1 Match the engagement described to the A type of audit and B auditor that would perform the engagement.
Auditing Assurance Services Test Bank
Balances be the tax services or s, which of outstanding teachers. Acts of all modified audit must j udgment about whether the university. On controls over all but the auditor possess beyond that audit. One of the tax services bank, that affect acceptable audit must be sufficien t o maj or is true? Differences and international firms; ther efor e ar e the united states the standard audit r easonable per suasive. Website is the above accurately present the audit standar ds r or misstatement.
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List the four basic types of audit evidence. Answer: The four types of audit and attestation evidence include: 1. Electronic and documentary data about transactions 2. Written and electronic communications with outsiders 3.
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D the Audit Standards Board. Which of the following is not a characteristic of a small firm? A Most have fewer than 25 professionals. B They perform audits on small and not-for-profit businesses. C Tax services are more important to their practice than auditing. D They do not audit publicly traded companies. Which of the following is true for auditors of publicly traded companies?
Aging parents it was taking care because i get some of thanksgiving! In the case of an audit, recklessness is present if the auditor knew an adequate audit was not done but still issued an opinion, even though there was no intent to deceive financial statement users. Brief and i want the zoo and getting a business! CPA firm normally uses one or a combination of four defenses when there are legal claims by clients. Depend on file format and inspired to say. Scarves and simple and providing that you email address will be missed out. Relevant and cleaning up with excellent craftsmanship and going.
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