SOLUTION,MANUAL,FOR
,Principles,Of,Auditing,And,Other,Assurance,Services,
23rd,Edition,By,Ray,Whittington,Kurt,
ALL,Chapters,(1,-,21)
, Table,of,Contents
Chapter,1:,The,Role,of,the,Public,Accountant,in,the,AmericanEconomy
Chapter,2:,Professional,Standards
Chapter,3:,Professional,Ethics
Chapter,4:,Legal,Liability,of,CPAs
Chapter,5:,Audit,Evidence,and,Documentation
Chapter,6:,Audit,Planning,,Understanding,the,Client,,AssessingRisks,,and,Responding
Chapter,7:,Internal,Control
Chapter,8:,Consideration,of,Internal,Control,in,an,InformationTechnology,Environment
Chapter,9:,Audit,Sampling
Chapter,10:,Cash,and,Financial,Investments
Chapter,11:,Accounts,Receivable,,Notes,Receivable,,andRevenue
Chapter,12:,Inventories,and,Cost,of,Goods,Sold
Chapter,13:,Property,,Plant,,and,Equipment:,Depreciation,andDepletion
Chapter,14:,Accounts,Payable,and,Other,Liabilities
Chapter,15:,Debt,and,Equity,Capital
Chapter,16:,Auditing,Operations,and,Completing,the,Audit
Chapter,17:,Auditors’,Reports
Chapter,18:,Integrated,Audits,of,Public,Companies
Chapter,19:,Additional,Assurance,Services:,Historical,FinancialInformation
Chapter,20:,Additional,Assurance,Services:,Other,Information
Chapter,21:,Internal,,Operational,,and,Compliance,Auditing
,CHAPTER, 1
The,Role,of, the,Publi
c, Accountant, in, the
American, Economy
Review,Questions
1-1 The,―crisis,of,credibility‖,largely,arose,from,the,number,of,companies,that,restated,their,previously,issu
ed,financial,statements, as, a, result, of, accounting,irregularities, and,fraud., Especially,responsible,were,the
,very,visible,Enron,and,WorldCom,fraud,cases.,Both,companies, filed,for, bankruptcy,and,constituted,th
e,largest, companies, in,American,history,to,do,so., The,extent, of,the,accounting,irregularities, and,fraud,
being,investigated,and,disclosed,brought, into,question,the,effectiveness, of, financial,statement, audits., In
,addition,,the,criminal,conviction,of,Arthur,Andersen,,LLP,,one,of,the,then,Big,5,accounting,firms,,on,c
harges, of,destroying,documents, related,to,the,Enron,case,brought, into,question,the,ethics, standards, of,t
he,profession.
1-2 Assurance,services,are,professional,services,that,enhance,the,quality,of,information,,or,its,context,,for
,decision-
making.,The,two,types,are:,(a),those,that,increase,the,reliability,of,information,and,(b),those,that,inv
olve,putting,information,in,a,form,or,context,that,facilitates,decision-making.
1-3 A,financial,statement, audit, is,,by,far,, the,most, common,type,of, attest, engagement., The,overall,assertion
,,made,by,management,,most,frequently,is,that,the,financial,statements,follow,generally,accepted,accoun
ting,principles.
1-4 A,large,corporation,with,securities,listed,on,a,stock,exchange,is,required,by,the,rules,of,the,stock,exchan
ge,and,by,the,rules, of, the,Securities, and,Exchange,Commission,to,provide,an,audit, report, with,the,annu
al,financial,statements, furnished,to,its, stockholders., It, also,is, required,to,engage,the,auditors, to,provide,
an,opinion,on,its,internal,control.,Apart,from,legal,requirements,,however,,a,large,listed,corporation,re
cognizes,that,it,must, maintain,investor,confidence,in,the,reliability,of,its,financial,statements, and, interna
l, control, over, financial, reporting, if, it, is, to, continue,to, be,able,to, secure,capital,from,the,public., The,rep
ort, by,a,firm,of,certified,public,accountants, adds, credibility,to,the,financial,statements, prepared,by,the,c
orporation., When,a, small,family-
, owned,enterprise,elects, to,have,an,audit,,the,purpose,usually,is,to,use,the,auditors',report,to,support,an,a
pplication, for,a,bank,loan.
,Principles,Of,Auditing,And,Other,Assurance,Services,
23rd,Edition,By,Ray,Whittington,Kurt,
ALL,Chapters,(1,-,21)
, Table,of,Contents
Chapter,1:,The,Role,of,the,Public,Accountant,in,the,AmericanEconomy
Chapter,2:,Professional,Standards
Chapter,3:,Professional,Ethics
Chapter,4:,Legal,Liability,of,CPAs
Chapter,5:,Audit,Evidence,and,Documentation
Chapter,6:,Audit,Planning,,Understanding,the,Client,,AssessingRisks,,and,Responding
Chapter,7:,Internal,Control
Chapter,8:,Consideration,of,Internal,Control,in,an,InformationTechnology,Environment
Chapter,9:,Audit,Sampling
Chapter,10:,Cash,and,Financial,Investments
Chapter,11:,Accounts,Receivable,,Notes,Receivable,,andRevenue
Chapter,12:,Inventories,and,Cost,of,Goods,Sold
Chapter,13:,Property,,Plant,,and,Equipment:,Depreciation,andDepletion
Chapter,14:,Accounts,Payable,and,Other,Liabilities
Chapter,15:,Debt,and,Equity,Capital
Chapter,16:,Auditing,Operations,and,Completing,the,Audit
Chapter,17:,Auditors’,Reports
Chapter,18:,Integrated,Audits,of,Public,Companies
Chapter,19:,Additional,Assurance,Services:,Historical,FinancialInformation
Chapter,20:,Additional,Assurance,Services:,Other,Information
Chapter,21:,Internal,,Operational,,and,Compliance,Auditing
,CHAPTER, 1
The,Role,of, the,Publi
c, Accountant, in, the
American, Economy
Review,Questions
1-1 The,―crisis,of,credibility‖,largely,arose,from,the,number,of,companies,that,restated,their,previously,issu
ed,financial,statements, as, a, result, of, accounting,irregularities, and,fraud., Especially,responsible,were,the
,very,visible,Enron,and,WorldCom,fraud,cases.,Both,companies, filed,for, bankruptcy,and,constituted,th
e,largest, companies, in,American,history,to,do,so., The,extent, of,the,accounting,irregularities, and,fraud,
being,investigated,and,disclosed,brought, into,question,the,effectiveness, of, financial,statement, audits., In
,addition,,the,criminal,conviction,of,Arthur,Andersen,,LLP,,one,of,the,then,Big,5,accounting,firms,,on,c
harges, of,destroying,documents, related,to,the,Enron,case,brought, into,question,the,ethics, standards, of,t
he,profession.
1-2 Assurance,services,are,professional,services,that,enhance,the,quality,of,information,,or,its,context,,for
,decision-
making.,The,two,types,are:,(a),those,that,increase,the,reliability,of,information,and,(b),those,that,inv
olve,putting,information,in,a,form,or,context,that,facilitates,decision-making.
1-3 A,financial,statement, audit, is,,by,far,, the,most, common,type,of, attest, engagement., The,overall,assertion
,,made,by,management,,most,frequently,is,that,the,financial,statements,follow,generally,accepted,accoun
ting,principles.
1-4 A,large,corporation,with,securities,listed,on,a,stock,exchange,is,required,by,the,rules,of,the,stock,exchan
ge,and,by,the,rules, of, the,Securities, and,Exchange,Commission,to,provide,an,audit, report, with,the,annu
al,financial,statements, furnished,to,its, stockholders., It, also,is, required,to,engage,the,auditors, to,provide,
an,opinion,on,its,internal,control.,Apart,from,legal,requirements,,however,,a,large,listed,corporation,re
cognizes,that,it,must, maintain,investor,confidence,in,the,reliability,of,its,financial,statements, and, interna
l, control, over, financial, reporting, if, it, is, to, continue,to, be,able,to, secure,capital,from,the,public., The,rep
ort, by,a,firm,of,certified,public,accountants, adds, credibility,to,the,financial,statements, prepared,by,the,c
orporation., When,a, small,family-
, owned,enterprise,elects, to,have,an,audit,,the,purpose,usually,is,to,use,the,auditors',report,to,support,an,a
pplication, for,a,bank,loan.
