Test Bank all Chapters

Auditing, Assurance Services & Ethics in Australia. 10e Arens, Best, Shailer, Fiedler, Elder, Beasley

(Test Bank all Chapters)

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Copyright ©2017 Pearson Australia (a division of Pearson Australia Group Pty Ltd) –9781488609138 /Arens/Auditing Assurance Services and Ethics in Australia/10e

Chapter One:

MULTIPLE CHOICE. Choose the one alternative that best completes the statement or answers the question.1) As businesses become more complex and need more reliable information, public accountants play a vital role

in:

• providing tax services.
• providing business advisory services.
• providing assurance on information other than financial reports.
• all of the above

Answer: D

Diff: 1

Topic: Assurance services

AACSB: Written and Oral Communication

Objective: LO 1.1. Describe assurance services, and distinguish audit services from other assurance and non-assurance services provided by public accountants.

2) Auditors are valued for their experience in assisting companies to improve operations and:

• independence in providing assurances. B) technical knowledge.
• competence. D) all of the above

Answer: D

Diff: 1

Topic: Assurance services

AACSB: Written and Oral Communication

Objective: LO 1.1. Describe assurance services, and distinguish audit services from other assurance and non-assurance services provided by public accountants.

3) Any service in which the public accounting firm issues a written communication expressing a conclusion with respect to the reliability of a written assertion that is the responsibility of another party is:

• an accounting and bookkeeping service. B) a management advisory service.
• a tax service. D) an attestation service.

Answer: D

Diff: 1

Topic: Assurance services

AACSB: Written and Oral Communication

Objective: LO 1.1. Describe assurance services, and distinguish audit services from other assurance and non-assurance services provided by public accountants.

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Copyright ©2017 Pearson Australia (a division of Pearson Australia Group Pty Ltd) –9781488609138 /Arens/Auditing Assurance Services and Ethics in Australia/10e

4) Which of the following is classified as an attestation service?

• Compilation B) Tax planning engagement
• Consulting engagement D) Audit of historical financial statements

Answer: D

Diff: 1

Topic: Assurance services

AACSB: Written and Oral Communication

Objective: LO 1.1. Describe assurance services, and distinguish audit services from other assurance and non- assurance services provided by public accountants.

5) When a business contacts an auditor for a service providing no assurances, what type of engagement is being requested?

• Audit B) Tax Planning
• Review D) Compliance

Answer B

Diff: 1

Topic: Assurance services

AACSB: Written and Oral Communication

Objective: LO 1.1. Describe assurance services, and distinguish audit services from other assurance and non- assurance services provided by public accountants.

6)

An audit of historical financial statements is a form of:

• assurance service in which the auditor issues a written report expressing an opinion about whether the

financial statements are in material conformity with auditing standards.

• attestation service in which the auditor issues a written report expressing an opinion about whether the

financial statements are in material conformity with auditing standards.

• attestation service in which the auditor issues a written report expressing an opinion about whether the

financial statements are in material conformity with accounting standards.

• none of the above

Answer: C

Diff: 1

Topic: Assurance services

AACSB: Written and Oral Communication

Objective: LO 1.1. Describe assurance services, and distinguish audit services from other assurance and non-assurance services provided by public accountants.

7) Privately held companies have annual financial statement audits:

• to obtain financing from banks.
• because external users rely on it.
• because they are required to under the Corporations Act.
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