Test Bank For Auditing And Assurance Services 13th Edition by Arens
ISBN-10: 0136084737, ISBN-13: 978-0136084730
Chapter 1
Multiple-Choice Questions
| 1. | Recording, classifying, and summarizing economic events in a logical manner for the purpose | |
| easy | of providing financial information for decision making is commonly called: | |
| c | a. | finance. |
| b. | auditing. | |
| c. | accounting. | |
| d. | economics. | |
| 2. | In the audit of historical financial statements, which of the following accounting bases is the | |
| easy | most common? | |
| c | a. | Regulatory accounting principles. |
| b. | Cash basis of accounting. | |
| c. | Generally accepted accounting principles. | |
| d. | Liquidation basis of accounting. | |
| 3. | Any service that requires a CPA firm to issue a report about the reliability of an assertion that is | |
| easy | made by another party is a(n): | |
| b | a. | accounting and bookkeeping service. |
| b. | attestation service. | |
| c. | assurance service. | |
| d. | tax service. | |
| 4. | Three common types of attestation services are: | |
| easy | a. | audits, reviews, and “other” attestation services. |
| a | b. | audits, verifications, and “other” attestation services. |
| c. | reviews, verifications, and “other” attestation services. | |
| d. | audits, reviews, and verifications. | |
| 5. (SOX) | The organization that is responsible for providing oversight for auditors of public companies is | |
| easy | called the ________. | |
| d | a. | Auditing Standards Board. |
| b. | American Institute of Certified Public Accountants. | |
| c. | Public Oversight Board. | |
| d. | Public Company Accounting Oversight Board. | |
| 6. (SOX) | The Sarbanes-Oxley Act applies to which of the following companies? | |
| easy | a. | All companies. |
| c | b. | Privately held companies. |
| c. | Public companies. | |
| d. | All public companies and privately held companies with assets greater than $500 million. | |
| 7. | Providing quantitative information that management and others can use to make decisions is the | |
| medium | function of: | |
| d | a. | management information systems. |
| b. | auditing. | |
| c. | finance. | |
| d. | accounting. | |
Arens/Elder/Beasley
| 8. | An audit of historical financial statements most commonly includes the: | |
| medium | a. | balance sheet, the income statement, and the statement of cash flows. |
| d | b. | income statement, the statement of cash flows, and the statement of net working capital. |
| c. | statement of cash flows, the balance sheet, and the retained earnings statement. | |
| d. | balance sheet, the income statement, and the statement of cash flows. | |
| 9. | The ___________ rate may be defined as approximately the rate a bank could earn by investing | |
| medium | in U.S. treasury notes for the same length as the length of a business loan. | |
| c | a. | nominal |
| b. | stated | |
| c. | risk-free | |
| d. | prevailing | |
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