Auditing: A Practical Approach 4th Canadian Edition by Robyn Moroney Test bank
Answer: False
Bloomcode: Comprehension
Difficulty: Easy
Learning Objective: Explain why there is a demand for audit and assurance services.
Section Reference: 1.2 Demand for audit and assurance services
CPA Competency: Audit and Assurance
AACSB: Analytic
3. A compliance audit involves gathering evidence to ascertain whether the person or entity under review has followed the rules, policies, procedures, laws, and regulations with which they must conform.
Answer: True
Bloomcode: Comprehension
Difficulty: Easy
Learning Objective: Differentiate between types of assurance services.
Section Reference: 1.3 Different assurance services
CPA Competency: Audit and Assurance
AACSB: Analytic
4. An operational audit is an example of a compliance audit.
Answer: False
Bloomcode: Knowledge
Difficulty: Easy
Learning Objective: Differentiate between types of assurance services.
Section Reference: 1.3 Different assurance services
CPA Competency: Audit and Assurance
AACSB: Analytic
5. The most common types of assurance engagements are financial statement audits, confirmation audits, performance audits, comprehensive audits, and assurance on corporate social responsibility (CSR) disclosures.
Answer: False
Bloomcode: Comprehension
Difficulty: Easy
Learning Objective: Differentiate between types of assurance services.
Section Reference: 1.3 Different assurance services
CPA Competency: Audit and Assurance
AACSB: Analytic
6. The nature of audit procedures refers to the reliance on evidence provided by the client and its management.
Answer: True
Bloomcode: Knowledge
Difficulty: Easy
Learning Objective: Differentiate between types of assurance services.
Section Reference: 1.3 Different assurance services
CPA Competency: Audit and Assurance
AACSB: Analytic
7. It is the auditor’s responsibility to prepare the financial statements.
Answer: False
Bloomcode: Knowledge
Difficulty: Easy
Learning Objective: Differentiate between types of assurance services.
Section Reference: 1.3 Different assurance services
CPA Competency: Audit and Assurance
AACSB: Analytic
8. An auditor can provide a reasonable level of assurance on information other than historical financial information.
Answer: True
Bloomcode: Comprehension
Difficulty: Easy
Learning Objective: Explain the different levels of assurance.
Section Reference: 1.4 Different levels of assurance
CPA Competency: Audit and Assurance
AACSB: Analytic
9. A reasonable level of assurance is the highest level of assurance that an auditor can provide.
Answer: True
Bloomcode: Comprehension
Difficulty: Easy
Learning Objective: Explain the different levels of assurance.
Section Reference: 1.4 Different levels of assurance
CPA Competency: Audit and Assurance
AACSB: Analytic
10. A no assurance engagement is of little use as no assurance is given to the client.
Answer: False
Bloomcode: Comprehension
Difficulty: Easy
Learning Objective: Explain the different levels of assurance.
Section Reference: 1.4 Different levels of assurance
CPA Competency: Audit and Assurance
AACSB: Analytic
11. The Compilation Engagement Report explicitly states that no assurance is being provided.
Answer: True
Bloomcode: Knowledge
Difficulty: Easy
Learning Objective: Explain the different levels of assurance.
Section Reference: 1.4 Different levels of assurance
CPA: Audit and Assurance
CPA: Audit and Assurance
AACSB: Analytic
12. When conducting a review engagement, a practitioner must obtain an understanding of the entity and test the effectiveness of the entity’s internal controls.
Answer: False
Bloomcode: Comprehension
Difficulty: Easy
Learning Objective: Explain the different levels of assurance.
Section Reference: 1.4 Different levels of assurance
CPA: Audit and Assurance
AACSB: Analytic
13. A negative expression of opinion is only given when there is a disagreement with management and the auditor.
Answer: False
Bloomcode: Knowledge
Difficulty: Easy
Learning Objective: Outline different audit opinions.
Section Reference: 1.5 Different audit opinions