CHAPTER 1 THE ACCOUNTANT'S ROLE IN THE ORGANIZATION ACCOUNTANT'
See the front matter of this Solutions Manual for suggestions regarding your choices of assignment material for each chapter.
1-1 Management accounting measures, analyzes and reports financia
Solution Manual of ARENS
Auditing and Assurance Service 13e
Consist of : 26 chapters
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Internal and Governmental Financial Auditing and Operational Auditing
26-1 Internal auditors who perform financial auditing are responsible for evaluating whether their company's internal controls are designed and operating ef
Other Assurance Services and Nonassurance Services
25-1 Levels of assurance represent the degree of certainty the practitioner has attained, and wishes to convey, that the conclusions stated in his or her report are correct. A
Chapter 24 Completing the Audit
Review Questions There are four presentation and disclosure-related audit objectives:
PRESENTATION AND DISCLOSURE-RELATED AUDIT OBJECTIVES Occurrence and rights and obligations Completeness Accuracy and valuation Class
1Chapter 22 Audit of the Capital Acquisition and Repayment Cycle
Review Questions 22-1 Four examples of interest bearing liability accounts commonly found on balance sheets are: 1. 2. 3. 4. Notes payable Contracts payable Mortgages payable Bonds payable
Chapter 21 Audit of the Inventory and Warehousing Cycle
21-1 Inventory is often the most difficult and time consuming part of many audit engagements because: 1. 2. 3. 4. 5. Inventory is generally a major item on the balance sheet and ofte
1Chapter 20 Audit of the Payroll and Personnel Cycle
20-1 General ledger accounts that are likely to be affected by the payroll and personnel cycle in most audits include the following: Cash Inventory Construction in progress Wages payabl
Chapter 18 Audit of the Acquisition and Payment Cycle: Tests of Controls, Substantive Tests of Transactions, and Accounts Payable
Review Questions a. Asset accounts:
Office supplies Delivery equipment Machinery and equipment Land Cash in bank Prepa
1Chapter 16 Completing the Tests in the Sales and Collection Cycle: Accounts Receivable
16-1 Tests of details of balances are designed to determine the reasonableness of the balances in sales, accounts receivable, and other account balanc
1Chapter 15 Audit Sampling for Tests of Controls and Substantive Tests of Transactions
15-1 A representative sample is one in which the characteristics of interest for the sample are approximately the same as for the population (that is,
1Chapter 12 The Impact of Information Technology on the Audit Process
12-1 The proper installation of IT can lead to internal control enhancements by replacing manually-performed controls with computer-performed controls. ITbased accounti
1Chapter 11 Fraud Auditing
11-1 Fraudulent financial reporting is an intentional misstatement or omission of amounts or disclosures with the intent to deceive users. Two examples of fraudulent financial reporting are accelerating the timi
1Chapter 10 Section 404 Audits of Internal Control and Control Risk
10-1 Management typically has three broad objectives in designing an effective internal control system. 1. Reliability of Financial Reporting Management is responsible fo
1Chapter 9 Materiality and Risk
9-1 The parts of planning are: accept client and perform initial planning, understand the clients business and industry, assess client business risk, perform preliminary analytical procedures, set materiali
1Chapter 6 Audit Responsibilities and Objectives
6-1 The objective of the audit of financial statements by the independent auditor is the expression of an opinion on the fairness with which the financial statements present financial posit
Review Questions The six core ethical values described by the Josephson Institute are: 1. Trustworthiness 2. Respect 3. Responsibility 4. Fairness 5. Caring 6. Citizenship
There are many other potential sources of ethica
1Chapter 4 Legal Liability
4-1 Several factors that have affected the increased number of lawsuits against CPAs are: 1. The growing awareness of the responsibilities of public accountants on the part of users of financial statements. 2. A
1Chapter 2 The CPA Profession
Review Questions The four major services that CPAs provide are: 1. Audit and assurance services Assurance services are independent professional services that improve the quality of information for decision makers. Assurance s
CHAPTER 19 (PROFESSIONAL ETHICS)
1. A client company has not paid its 2004 audit fees. According to the AICPA Code of Professional
Conduct, for the auditor to be considered independent with respect to the 2005 audit, the 2004
CHAPTER 17 (ASSURANCE & ATTESTATION SERVICES)
Which of the following is generally more important in a review than in a compilation?
Determining the accounting basis on which the financial statements are to be presented.
CHAPTER 16 (COMPLETING AN ENGAGEMENT)
1. An auditor accepted an engagement to audit the 2005 financial statements of EFG Corporation
and began the fieldwork on September 30. EFG gave the auditor the 2005 financial statements on
1. Client strategy templates provide a means for an auditor to
Acquire, evaluate, and document evidence.
Focus on transactions likely to affect audit risk.
Compile the strategies and characteristics of an entity.
Of the following, which is the least persuasive type of audit evidence?
Documents mailed by outsiders to the auditor.
Correspondence between auditor and vendors.
Copies of sales invoices inspected by the auditor.
1. An auditor's report contains the following sentences:
We did not audit the financial statements of B Company, a consolidated subsidiary, which
statements reflect total assets and revenues constituting 20 percent and 22 perce
1. To become a Certified Public Accountant (CPA), an individual must pass the Uniform CPA
a. Demonstrate his or her independence.
b. Comply with state education and experience requirements.
c. Obtain employment
CHAPTER 20 (LEGAL LIABILITY)
1. Which of the following best describes a trend in litigation involving CPAs?
a. A CPA cannot render an opinion on a company unless the CPA has audited all affiliates of that
b. A CPA may successful
CHAPTER 18 (COMPLIANCE & INTERNAL AUDITING)
1. In addition to assessing the fairness of the entity's financial statements, a governmental financial
statement audit is concerned with evaluating
a. Internal control.
Due professional care requires
A critical review of the work done at every level of supervision.
The examination of all corroborating evidence available.
The exercise of error-free judgment.
A consideration of i
1. When an auditor selects a sample of items from the vouchers payable register for the last month
of the period audited and traces the items to underlying documents, the auditor is gathering
evidence primarily in support of t