Louwers Solutions Audit 1 All Chapters

Louwers Solutions Audit 1 All Chapters - SOLUTIONS FOR...

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SOLUTIONS FOR MULTIPLE CHOICE-QUESTIONS 1.23. a. Incorrect This is an attestation to the prize promoter's claims. b. Incorrect This is an audit engagement to give an opinion on financial statements. c. Incorrect This is an assurance engagement on newspaper's circulation data. d. Incorrect This is an assurance engagement on the performance of golf balls. e. Correct Since attestation and audit engagements are subsets of assurance engagements, all are assurance engagements. 1.24 a. Correct This statement characterizes professional skepticism. b. Incorrect "Exclusively an auditor" is not an idea that seems to speak of "skepticism." c. Incorrect Professional obligations" is not an idea that seems to speak of "skepticism." d. Incorrect This is more an assumption of necessity than of skepticism. 1.25 a. Incorrect While work on a forecast is covered by the attestation standards, the auditors should give assurance or a disclaimer. b. Correct This is the basic definition of attestation--giving a report on reliability of an assertion one party makes to another. c. Incorrect Tax work is not an attestation service. d. Incorrect Litigation and expert witness services are not attestation services. 1.26 a. Incorrect The objective of environmental auditing is to help achieve and maintain compliance with environmental laws and regulations and to help identify and correct unregulated environmental hazards b. Incorrect The objective of financial auditing is to obtain assurance on the conformity of financial statements with generally accepted accounting principles. c. Incorrect The objective of compliance auditing is the entity’s compliance with laws and regulations. d. Correct Operational auditing refers to the study of business operations for the purpose of making recommendations about the economic and efficient use of resources, effective achievement of business objectives, and compliance with company policies. 1.27 a. Incorrect While not the primary objective of an operational audit, auditors should still be concerned about compliance with financial accounting standards. b. Correct This statement is part of the basic definition of operational auditing. c. Incorrect An operational audit does not focus on the financial statements. d. Incorrect Analytical tools and skills are an important part of financial auditing. 1.28 a. Correct The proper reference is to GAAP. b. Incorrect The AICPA does not refer only to the FASB for GAAP. c. Incorrect The reference to the SEC is wrong. d. Incorrect This is an abstract of the AAA definition. 1.29 d. Correct While "complexity," "remoteness," and "consequences" are good answers, "skepticism," or potential conflict of interest, generally drives the demand for audited financial statements. 1.30
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This note was uploaded on 05/27/2011 for the course ACC 450 taught by Professor Null during the Spring '11 term at GWU.

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Louwers Solutions Audit 1 All Chapters - SOLUTIONS FOR...

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