Auditing Chapter 8 A company can inflate their books by charging expense items to fixed assets accounts. Understating or capitalizing expenses is a means often used to mislead financial statement users. When expenses can be matched with revenues (mat
Chapter 1
Checkpoints- 1,2,3,4,5,6,8,10,12,14-17,19,20,22,1-25
Multiple choice- 23-51
Exercise problems- 52,54,59
1.) A business risk is the risk that a business will not obtain its objectives.
2.) The conditions that increase the demand for reliable info
Chapter 4
Review Check Points: 1-19
Multiple Choice: 20-50
Exercise Problems: 58, 62
1.) Business risks are risks that could adversely affect companies ability to
achieve objectives and execute strategies.
2.) The ERM can help address business risks by fa
Chapter 12
Review Check Points: 1-29
Multiple Choice: 30-44
Exercise Problems: 51 & 54
1.) The reports that accompany the financial statements of public entities and
non-public entities. Public entities financial statements include audited
financial state
Chapter 3
Review Check Points: 2,3,4,9-17,19,26
Multiple Choice: 27-52
Exercise and problems:53,56
2.) The audit client must grant its approval before the communication can occur
between the prospective auditor to reduce the risk of accepting a problem cl
Chapter 5
Review Check Points: 1-17, 19, 20,21, 22, 24-32
Multiple Choice: 33-60
1.) According to COSO Report, three goals of internal control system are
reliability of financial reporting, effectiveness and efficiency of operations,
and compliance with a
Chapter 2
Review check points: 1-25
Multiple choice 26-51
Exercise problems:59,60,63
1.) GAAS are auditing standards that identify necessary qualifications and
characteristics of auditors and guide the conduct of the audit examination.
The purpose of GAAS
Lakeside Case 5
Discussion Questions
1.) An inquiry is a good form of secondary audit procedures, however it is not as strong
as evidence obtained straight from the auditor. The AICPA states Audit evidence
obtained directly by the auditor (for example, ob
Auditing Chapter 11 We have learned so far, the auditor's use of the audit risk model to limit exposure to audit risk, the auditor's tests of controls to determine the operating effectiveness of internal control and to assess control risk, and the au
Inherent limitations in internal control (such as collusion and management override) prevent complete assurance that every fraud scheme will be detected before a loss is incurred. Although the AICPA auditing standards concentrate on management fraud,
Review Checkpoint- 1,2,5-8,10,11,15-18
Multiple Choice- 23-40
1.) the short-term effect on the financial statements for improperly capitalizing
expenditures is an increase in net income because items that should be
expensed are included as assets. The lon
