, AUDITING: A RISK-BASED APPROACH h h h
12e ||ZEHMS, GRAMLING, RITTENBERG||
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Solutions for Chapter 1
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Solutions Manual Reconciliation from 11e to 12e
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Question # for 11e
h h h Deleted/replaced/updated/new? Question # for 12e
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1 1
2 Deleted & replaced with
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question about regulatory
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enforcement
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3 3
4 4
5 5
6 6
7 7
8 Updated from a generic
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question to one specifically
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focused on the Theranos
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fraud.
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9 9
10 10
11 11
12 12
13 13
14 14
15 15
16 16
17 17
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19 19
20 20
21 21
22 Updated to reflect 2021
h h h 22
IESB Code of Ethics.
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23 23
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26 26
27 27
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29 29
1-1
,30 30
40 Changed order of learning h h h 31
objectives; same question
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41 Changed order of learning h h h 32
objectives; same question
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42 Changed order of learning h h h 33
objectives; same question
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31 34
32 Updated – added additional
h h h 35
content on poor judgments
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as documented in a
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PCAOB enforcement
h h
release
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33 36
34 37
35 38
36 39
37 40
38 41
39 42
New fraud case about
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Elizabeth Holmes &
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Theranos
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43 44
44 45
45 46
46 47
47 48
48 49
49 50
50 Updated to a 2021 PCAOB h h h h 51
enforcement case
h h
illustrating the same points.
h h h h
New case investigating the
h h h 52
outcome of the
h h h
Holmes/Theranos trial.
h h
New case simulation on
h h h 53
data analytics and CPA
h h h h
exam written
h h
communication.
h
51 Deleted Academic h
Research case; eliminating h h
this feature.
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1-2
, 52 Deleted Academic h
Research case; eliminating
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this feature.
h h
Answers to Check Your Basic Knowledge Questions
h h h h h h
1-1 T h
1-2 F h
1-3 d h
1-4 b h
1-5 T h
1-6 F h
1-7 a h
1-8 b h
1-9 T h
1-10 F h
1-11 d h
1-12 c h
1-13 T h
1-14 T h
1-15 b h
1-16 d h
1-17 T h
1-18 F h
1-19 d h
1-20 c h
1-21 T h
1-22 T h
1-23 b h
1-24 a h
Review Questions and Short Cases
h h h h
1-1
The objective of external auditing is to provide opinions on the reliability of the financial
h h h h h h h h h h h h h h
statements and, as part of an integrated audit, provide opinions on internal control effectiveness.
h h h h h h h h h h h h h h
The value of the external auditing profession is affirmed when the public has confidence in its
h h h h h h h h h h h h h h h h
objectivity and the accuracy of its opinions. The capital markets depend on accurate, reliable,
h h h h h h h h h h h h h h
and objective (neutral) data that portray the economic nature of an entity‘s business and in turn
h h h h h h h h h h h h h h h h
provide a base to judge current progress toward long-term objectives. If the market does not
h h h h h h h h h h h h h h h
receive reliable data, investors lose confidence in the system, make poor decisions, and may lose
h h h h h h h h h h h h h h h
a great deal of money; ultimately, the system may fail. By providing an independent audit
h h h h h h h h h h h h h h h
1-3
12e ||ZEHMS, GRAMLING, RITTENBERG||
h h h h
Solutions for Chapter 1
h h h
Solutions Manual Reconciliation from 11e to 12e
h h h h h h
Question # for 11e
h h h Deleted/replaced/updated/new? Question # for 12e
h h h
1 1
2 Deleted & replaced with
h h h 2
question about regulatory
h h h
enforcement
h
3 3
4 4
5 5
6 6
7 7
8 Updated from a generic
h h h 8
question to one specifically
h h h h
focused on the Theranos
h h h h
fraud.
h
9 9
10 10
11 11
12 12
13 13
14 14
15 15
16 16
17 17
18 18
19 19
20 20
21 21
22 Updated to reflect 2021
h h h 22
IESB Code of Ethics.
h h h h
23 23
24 24
25 25
26 26
27 27
28 28
29 29
1-1
,30 30
40 Changed order of learning h h h 31
objectives; same question
h h h
41 Changed order of learning h h h 32
objectives; same question
h h h
42 Changed order of learning h h h 33
objectives; same question
h h h
31 34
32 Updated – added additional
h h h 35
content on poor judgments
h h h h
as documented in a
h h h h
PCAOB enforcement
h h
release
h
33 36
34 37
35 38
36 39
37 40
38 41
39 42
New fraud case about
h h h 43
Elizabeth Holmes &
h h h
Theranos
h
43 44
44 45
45 46
46 47
47 48
48 49
49 50
50 Updated to a 2021 PCAOB h h h h 51
enforcement case
h h
illustrating the same points.
h h h h
New case investigating the
h h h 52
outcome of the
h h h
Holmes/Theranos trial.
h h
New case simulation on
h h h 53
data analytics and CPA
h h h h
exam written
h h
communication.
h
51 Deleted Academic h
Research case; eliminating h h
this feature.
h h
1-2
, 52 Deleted Academic h
Research case; eliminating
h h h
this feature.
h h
Answers to Check Your Basic Knowledge Questions
h h h h h h
1-1 T h
1-2 F h
1-3 d h
1-4 b h
1-5 T h
1-6 F h
1-7 a h
1-8 b h
1-9 T h
1-10 F h
1-11 d h
1-12 c h
1-13 T h
1-14 T h
1-15 b h
1-16 d h
1-17 T h
1-18 F h
1-19 d h
1-20 c h
1-21 T h
1-22 T h
1-23 b h
1-24 a h
Review Questions and Short Cases
h h h h
1-1
The objective of external auditing is to provide opinions on the reliability of the financial
h h h h h h h h h h h h h h
statements and, as part of an integrated audit, provide opinions on internal control effectiveness.
h h h h h h h h h h h h h h
The value of the external auditing profession is affirmed when the public has confidence in its
h h h h h h h h h h h h h h h h
objectivity and the accuracy of its opinions. The capital markets depend on accurate, reliable,
h h h h h h h h h h h h h h
and objective (neutral) data that portray the economic nature of an entity‘s business and in turn
h h h h h h h h h h h h h h h h
provide a base to judge current progress toward long-term objectives. If the market does not
h h h h h h h h h h h h h h h
receive reliable data, investors lose confidence in the system, make poor decisions, and may lose
h h h h h h h h h h h h h h h
a great deal of money; ultimately, the system may fail. By providing an independent audit
h h h h h h h h h h h h h h h
1-3
