Auditing The Art And Science of Assurance Engagements Canadian 12th Edition By Arens-Test Bank

Test Bank For Reviewing The Craft And Skill of Assurance Engagements Canadian 12th Edition By Arens

ISBN-10 ‏ : ‎ 0133405508, ISBN-13 ‏ : ‎ 978-0133405507

Chapter 1   The Need for an Auditing and Assurance Profession

1.1   Recognize the elements of an audit and clarify the rationale behind the demand for audits

1) Which instance portrays the meaning of auditing concerning the evidence analysis process?

1. A) accumulation and assessment of proof regarding balance sheet accounts
2. B) familiarizing oneself with various computing technologies, like mainframes
3. C) drafting an operational audit document customized to the client’s circumstances
4. D) ensuring the auditor is skilled and comprehends evidence collection

Answer:  A

Diff: 1     Type: MC     Page Ref: 5

Learning Obj.:   1-1  Recognize the elements of an audit and clarify the rationale behind the demand for audits

2) Auditing should be carried out by a qualified

1. A) chartered accountant.
2. B) certified management accountant.
3. C) competent and impartial individual.
4. D) professional accountant.

Answer:  C

Diff: 2     Type: MC     Page Ref: 5

Learning Obj.:   1-1  Recognize the elements of an audit and clarify the rationale behind the demand for audits

3) Which situation illustrates the meaning of auditing regarding the reporting process?

1. A) accumulation and assessment of proof regarding balance sheet accounts
2. B) reporting on the extent of alignment between financial statements and ASPE
3. C) drafting an operational audit document customized to the client’s circumstances
4. D) ensuring the auditor is skilled and comprehends evidence collection

Answer:  B

Diff: 2     Type: MC     Page Ref: 5

Learning Obj.:   1-1  Recognize the elements of an audit and clarify the rationale behind the demand for audits

4) In the audit of past financial statements by PA firms, the benchmarks utilized are

1. A) generally accepted auditing standards.
2. B) generally accepted accounting principles.
3. C) regulations of the Canada Revenue Agency.
4. D) regulations of the provincial securities commissions.

Answer:  B

Diff: 1     Type: MC     Page Ref: 5

Learning Obj.:   1-1  Recognize the elements of an audit and clarify the rationale behind the demand for audits

5) A prominent PA firm has evaluated evidence gathered during an assignment. Criteria employed to evaluate the financial statements were International Financial Reporting Standards (IFRS). An elevated level of assurance was attained. The kind of assignment carried out was a(n)

1. A) audit.
2. B) review.
3. C) management consultancy.
4. D) compilation.

Answer:  A

Diff: 2     Type: MC     Page Ref: 5

Learning Obj.:   1-1  Recognize the elements of an audit and clarify the rationale behind the demand for audits

6) The auditor and the entities should establish accord on the benchmarks to be adopted in the audit

1. A) prior to the audit initiation.
2. B) subsequent to completing the audit planning.
3. C) as they advance with the audit to determine the more suitable benchmarks.
4. D) at the conclusion of the audit.

Answer:  A

Diff: 1     Type: MC     Page Ref: 5

Learning Obj.:   1-1  Recognize the elements of an audit and clarify the rationale behind the demand for audits

7) George had a discussion with the accounting personnel and recorded details on how the accounting systems operate. He also placed duplicate accounting forms in his records. George is performing which action?

1. A) accounting methods
2. B) evidence collecting
3. C) tax examination
4. D) audit report development

Answer:  B

Diff: 3     Type: MC     Page Ref: 5

Learning Obj.:   1-1  Recognize the elements of an audit and clarify the rationale behind the demand for audits

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