TEST BANK - Principles of Auditing and Other Assurance
Services 22nd Edition by Ray Whittington, Kurt Pany
,Table of Content
Chapter 1 The Role of the Public Accountant in the American Economy
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, Assessing Risks, and
Responding
Chapter 7 Internal Control
Chapter 8 Consideration of Internal Control in an Information Technology
Environment
Chapter 9 Audit Sampling
Chapter 10 Cash and Financial Investments
Chapter 11 Accounts Receivable, Notes Receivable, and Revenue
Chapter 12 Inventories and Cost of Goods Sold
Chapter 13 Property, Plant, and Equipment: Depreciation and Depletion
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 Financial
Information
Chapter 20 Additional Assurance Services: Other Information
Chapter 21 Internal, Operational, and Compliance Auditing
, Full Test Bank for Principles of Auditing and Other Assurance
Services 22ndEdition by Ray Whittington, Kurt Pany
Answers Vare Vat Vthe Vend Vof Veach Vchapter
V Chapter V1
Student Vname: V
1) Accountants Vare Vregulated Vby Va Vvariety Vof Vorganizations. VMatch Vthe
Vstatements V withthe Vmost Vdirectly Vrelated Vorganization:
● Accounting Vand VReview VServices VCommittee.
● American VInstitute Vof VCertified VPublic VAccountants.
● Auditing VStandards VBoard.
● Federal VAccounting VStandards VAdvisory VBoard.
● Financial VAccounting VStandards VBoard.
● General VAccounting VOffice.
● Government VAccounting VStandards VBoard.
● Public VCompany VAccounting VOversight VBoard.
● Securities Vand VExchange VCommission.
● State VBoards Vof VAccountancy.
Organizations Vmay Vbe Vused Vonce, Vmore Vthan Vonce, Vor Vnot Vat Vall.
Statements Organizations
A. DevelopsVaccounting
Vstandardsfor V public Vand Vnonpublic
Vcompanies.
B. DevelopsVaccounting Vstandardsfor Vthe
U.S. VGovernment.
C. Improves Vstandards Vof Vfinancial
V accounting Vfor Vstate Vand Vlocal
Vgovernment V entities.
D. Issues Vauditing Vstandards
Vforpublic V companies.
E. Issues VCPA Vcertificates.
F. Prepares Vthe VCPA Vexam.
Organizations: VAmerican VInstitute Vof VCertified VPublic VAccountants, VFederal
VAccounting V Standards VAdvisory VBoard, VFinancial VAccounting VStandards VBoard,
VGovernment V Accounting VStandards VBoard, VPublic VCompany VAccounting VOversight
VBoard, VState VBoards V of VAccountancy.
, 2) The VSarbanes-Oxley VAct Vof V2002 Vmade Vsignificant Vreforms Vfor Vpublic
Vcompanies V andtheir Vauditors.
a. Describe Vthe Vevents Vthat Vled Vup Vto Vthe Vpassage Vof Vthe VAct.
b. Describe Vthe Vmajor Vchanges Vmade Vby Vthe VAct.
3) Many Vpeople Vconfuse Vthe Vresponsibilities Vof Vthe Vindependent
Vauditors V and Vtheclient's Vmanagement Vwith Vrespect Vto Vaudited Vfinancial
Vstatements.
a. Describe Vmanagement's Vresponsibility Vregarding Vaudited Vfinancial Vstatements.
b. Describe Vthe Vindependent Vauditors' Vresponsibility Vregarding Vaudited Vfinancial
V statements.
c. Evaluate Vthe Vfollowing Vstatement: V"If Vthe Vauditors Vdisagree Vwith
Vmanagement V regarding Van Vaccounting Vprinciple Vused Vin Vthe Vfinancial Vstatements,
Vthe Vauditors Vshould V expresstheir Vviews Vin Vthe Vnotes Vto Vthe Vfinancial Vstatements."
4) An Vinvestor Vis Vconsidering Vinvesting Vin Vone Vof Vtwo Vcompanies. VThe Vcompanies
Vhave V verysimilar Vreported Vfinancial Vposition Vand Vresults Vof Voperations. VHowever,
Vonly Vone Vof V the Vcompanies Vhas Vits Vfinancial Vstatements Vaudited.
a. Describe V what V creates V the V demand V for V an V audit V in Vthis V situation.
V Include V a V discussion Vof V how V audited V financial V statements V facilitate V this
V investment V transaction, V and Vthe Veffect Vof Vtheaudit Von Vbusiness Vrisk Vand
Vinformation Vrisk.
b. Identify V the V potential V consequences V to V the V company V of V not
V having V its V financialstatements Vaudited.
5) A Vsummary Vof Vfindings Vrather Vthan Vassurance Vis Vmost Vlikely Vto Vbe Vincluded Vin Va(n):
A) Agreed-upon Vprocedures Vreport.
B) Compilation Vreport.
C) Audit Vreport.
D) Review Vreport.
Services 22nd Edition by Ray Whittington, Kurt Pany
,Table of Content
Chapter 1 The Role of the Public Accountant in the American Economy
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, Assessing Risks, and
Responding
Chapter 7 Internal Control
Chapter 8 Consideration of Internal Control in an Information Technology
Environment
Chapter 9 Audit Sampling
Chapter 10 Cash and Financial Investments
Chapter 11 Accounts Receivable, Notes Receivable, and Revenue
Chapter 12 Inventories and Cost of Goods Sold
Chapter 13 Property, Plant, and Equipment: Depreciation and Depletion
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 Financial
Information
Chapter 20 Additional Assurance Services: Other Information
Chapter 21 Internal, Operational, and Compliance Auditing
, Full Test Bank for Principles of Auditing and Other Assurance
Services 22ndEdition by Ray Whittington, Kurt Pany
Answers Vare Vat Vthe Vend Vof Veach Vchapter
V Chapter V1
Student Vname: V
1) Accountants Vare Vregulated Vby Va Vvariety Vof Vorganizations. VMatch Vthe
Vstatements V withthe Vmost Vdirectly Vrelated Vorganization:
● Accounting Vand VReview VServices VCommittee.
● American VInstitute Vof VCertified VPublic VAccountants.
● Auditing VStandards VBoard.
● Federal VAccounting VStandards VAdvisory VBoard.
● Financial VAccounting VStandards VBoard.
● General VAccounting VOffice.
● Government VAccounting VStandards VBoard.
● Public VCompany VAccounting VOversight VBoard.
● Securities Vand VExchange VCommission.
● State VBoards Vof VAccountancy.
Organizations Vmay Vbe Vused Vonce, Vmore Vthan Vonce, Vor Vnot Vat Vall.
Statements Organizations
A. DevelopsVaccounting
Vstandardsfor V public Vand Vnonpublic
Vcompanies.
B. DevelopsVaccounting Vstandardsfor Vthe
U.S. VGovernment.
C. Improves Vstandards Vof Vfinancial
V accounting Vfor Vstate Vand Vlocal
Vgovernment V entities.
D. Issues Vauditing Vstandards
Vforpublic V companies.
E. Issues VCPA Vcertificates.
F. Prepares Vthe VCPA Vexam.
Organizations: VAmerican VInstitute Vof VCertified VPublic VAccountants, VFederal
VAccounting V Standards VAdvisory VBoard, VFinancial VAccounting VStandards VBoard,
VGovernment V Accounting VStandards VBoard, VPublic VCompany VAccounting VOversight
VBoard, VState VBoards V of VAccountancy.
, 2) The VSarbanes-Oxley VAct Vof V2002 Vmade Vsignificant Vreforms Vfor Vpublic
Vcompanies V andtheir Vauditors.
a. Describe Vthe Vevents Vthat Vled Vup Vto Vthe Vpassage Vof Vthe VAct.
b. Describe Vthe Vmajor Vchanges Vmade Vby Vthe VAct.
3) Many Vpeople Vconfuse Vthe Vresponsibilities Vof Vthe Vindependent
Vauditors V and Vtheclient's Vmanagement Vwith Vrespect Vto Vaudited Vfinancial
Vstatements.
a. Describe Vmanagement's Vresponsibility Vregarding Vaudited Vfinancial Vstatements.
b. Describe Vthe Vindependent Vauditors' Vresponsibility Vregarding Vaudited Vfinancial
V statements.
c. Evaluate Vthe Vfollowing Vstatement: V"If Vthe Vauditors Vdisagree Vwith
Vmanagement V regarding Van Vaccounting Vprinciple Vused Vin Vthe Vfinancial Vstatements,
Vthe Vauditors Vshould V expresstheir Vviews Vin Vthe Vnotes Vto Vthe Vfinancial Vstatements."
4) An Vinvestor Vis Vconsidering Vinvesting Vin Vone Vof Vtwo Vcompanies. VThe Vcompanies
Vhave V verysimilar Vreported Vfinancial Vposition Vand Vresults Vof Voperations. VHowever,
Vonly Vone Vof V the Vcompanies Vhas Vits Vfinancial Vstatements Vaudited.
a. Describe V what V creates V the V demand V for V an V audit V in Vthis V situation.
V Include V a V discussion Vof V how V audited V financial V statements V facilitate V this
V investment V transaction, V and Vthe Veffect Vof Vtheaudit Von Vbusiness Vrisk Vand
Vinformation Vrisk.
b. Identify V the V potential V consequences V to V the V company V of V not
V having V its V financialstatements Vaudited.
5) A Vsummary Vof Vfindings Vrather Vthan Vassurance Vis Vmost Vlikely Vto Vbe Vincluded Vin Va(n):
A) Agreed-upon Vprocedures Vreport.
B) Compilation Vreport.
C) Audit Vreport.
D) Review Vreport.
