TESTBANK FOR AUDITING A PRACTICAL APPROACH,
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4TH CANADIAN EDITION 4TH EDITION, KINDLE EDITION
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BY ROBYN MORONEY , FIONA CAMPBELL , JANE HAMI
d$ d$ d$ d$ d$ d$ d$ d$
LTON , VALERIE WARREN
d$ d$ d$
,TEST BANK for Auditing A Practical Approach, 4th Canadian Edition Moroney, Campbell, Warr
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Stuvia.com -
en
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The Marketplace to Buy and Sell your Study Material d$ d$ d$ d$ d$ d$ d$ d$ d$
CHAPTER 1 d $
INTRODUCTION AND OVERVIEW OF AUDIT AND ASSURANC d$ d$ d$ d$ d$ d$
E
CHAPTER LEARNING OBJECTIVES d$ d$
1. Define an assurance engagement. d$ d$ d$
An assurance engagement involves an assurance provider arriving atan opinion about so
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me information being provided by their client toa third party. A financial statement audit
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is one type of assuranceengagement. This engagement involves an auditor arriving at a
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n opinionabout the fair presentation of the financial statements. The auditreport is addre
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ssed to the shareholders of the company being audited,but other users may read the fin
d$ d$ d$ d$ d$ d$ d$ d$ d$ d$ d$ d$ d$ d$
ancial statements. Learning aboutauditing and assurance requires an understanding of a
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uditing andassurance terminology, including terms such as audit risk, materiality,internal
d$ d$ d$ d$ d$ d$ d$ d$ d$ d$
controls, listed entity, and assertions.d$ d$ d$ d$
2. Explain why there is a demand for audit and assurance services.
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Financial statement users include investors (shareholders), suppliers,customers, lenders,
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$ employees, governments, and the general public.These groups of users demand audite
d$ d$ d$ d$ d$ d$ d$ d$ d$ d$
d financial statements because oftheir remoteness from the entity, accounting complexity
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, theirincentivescompeting with those of the entity‘s managers, and their needfor reliable
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$ information on which to base decisions. The theories usedto describe the demand for au
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dit and assurance services are agencytheory, the information hypothesis, and the insura
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nce hypothesis. d$
3. Differentiate between types of assurance services. d$ d$ d$ d$ d$
Assurance services include financial statement audits, complianceaudits, performance aud
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its, comprehensive audits, internal audits,and assurance on corporate social responsibilit
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y (CSR) disclosures.
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4. Explain the different levels of assurance. d$ d$ d$ d$ d$
The different levels of assurance include reasonable assurance, whichis the highest level
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of assurance, limited assurance, and no assurance.Reasonable assurance is provided o
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n an audit of a company‘sfinancial statements. Limited assurance is provided in a revie
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acompany‘s financial Dsotwante
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,TEST BANK for Auditing A Practical Approach, 4th Canadian Edition Moroney, Campbell, Warr
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Stuvia.com -
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The Marketplace to Buy and Sell your Study Material
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w ofd$
acompany‘s financial Dsotwante
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, TEST BANK for Auditing A Practical Approach, 4th Canadian Edition Moroney, Campbell, Warr
d$ d$ d$ d$ d$ d$ d$ d$ d$ d$ d$ d$
Stuvia.com -
en
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The Marketplace to Buy and Sell your Study Material d$ d$ d$ d$ d$ d$ d$ d$ d$
5. Outline different audit opinionsd$ d$ d$
An auditor can issue an unmodified opinion, also known as a cleanreport, or an unmodifi
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ed opinion with an emphasis of matter paragraph.Alternatively, a modified opinion may
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be issued as a qualified, anadverse, or a disclaimer of opinion.
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6. Differentiate between the roles of the preparer and the auditor, and discuss t
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he different firms that provide assurance services.
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It is the responsibility of a company‘s governing body to ensure thatits financial stateme
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nts are relevant, reliable, comparable, understandable,and true and fair. It is the responsi
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bility of the auditor to form anopinion on the fair presentation of the financial statements.
d$ d$ d$ d$ d$ d$ d$ d$ d$ d$ d$ d$ d$ d$ d
$ In doing,so 1- 2 Auditing: A Practical Approach, Fourth Canadian Edition
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the auditor must maintain professional scepticism and utilize professionaljudgement and d
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ue care. d$
The firms that provide assurance services include the Big-
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4international firms, the national firms (with international links),local and regional firms, a
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nd consulting firms that tend to specializein assurance of CSR and environmental disclo
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sures.
7. Identify the different regulators, legislation, and regulations surrounding th
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e assurance process.
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lO M d$ d$ d$ d$ d$ d$ d$ d$ d$
o AR c P S D | 3 08 78 49 5
Introduction and Overview of Audit and Assurance d$ d$ d$ d$ d$ d$ 1 - 3
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4TH CANADIAN EDITION 4TH EDITION, KINDLE EDITION
d$ d$ d$ d$ d$ d$ d$
BY ROBYN MORONEY , FIONA CAMPBELL , JANE HAMI
d$ d$ d$ d$ d$ d$ d$ d$
LTON , VALERIE WARREN
d$ d$ d$
,TEST BANK for Auditing A Practical Approach, 4th Canadian Edition Moroney, Campbell, Warr
d$ d$ d$ d$ d$ d$ d$ d$ d$ d$ d$ d$
Stuvia.com -
en
d$
The Marketplace to Buy and Sell your Study Material d$ d$ d$ d$ d$ d$ d$ d$ d$
CHAPTER 1 d $
INTRODUCTION AND OVERVIEW OF AUDIT AND ASSURANC d$ d$ d$ d$ d$ d$
E
CHAPTER LEARNING OBJECTIVES d$ d$
1. Define an assurance engagement. d$ d$ d$
An assurance engagement involves an assurance provider arriving atan opinion about so
d$ d$ d$ d$ d$ d$ d$ d$ d$ d$ d$
me information being provided by their client toa third party. A financial statement audit
d$ d$ d$ d$ d$ d$ d$ d$ d$ d$ d$ d$ d$ d$
is one type of assuranceengagement. This engagement involves an auditor arriving at a
d$ d$ d$ d$ d$ d$ d$ d$ d$ d$ d$ d$
n opinionabout the fair presentation of the financial statements. The auditreport is addre
d$ d$ d$ d$ d$ d$ d$ d$ d$ d$ d$ d$
ssed to the shareholders of the company being audited,but other users may read the fin
d$ d$ d$ d$ d$ d$ d$ d$ d$ d$ d$ d$ d$ d$
ancial statements. Learning aboutauditing and assurance requires an understanding of a
d$ d$ d$ d$ d$ d$ d$ d$ d$ d$
uditing andassurance terminology, including terms such as audit risk, materiality,internal
d$ d$ d$ d$ d$ d$ d$ d$ d$ d$
controls, listed entity, and assertions.d$ d$ d$ d$
2. Explain why there is a demand for audit and assurance services.
d$ d$ d$ d$ d$ d$ d$ d$ d$ d$
Financial statement users include investors (shareholders), suppliers,customers, lenders,
d$ d$ d$ d$ d$ d$ d$ d
$ employees, governments, and the general public.These groups of users demand audite
d$ d$ d$ d$ d$ d$ d$ d$ d$ d$
d financial statements because oftheir remoteness from the entity, accounting complexity
d$ d$ d$ d$ d$ d$ d$ d$ d$ d$
, theirincentivescompeting with those of the entity‘s managers, and their needfor reliable
d$ d$ d$ d$ d$ d$ d$ d$ d$ d$ d$ d
$ information on which to base decisions. The theories usedto describe the demand for au
d$ d$ d$ d$ d$ d$ d$ d$ d$ d$ d$ d$ d$
dit and assurance services are agencytheory, the information hypothesis, and the insura
d$ d$ d$ d$ d$ d$ d$ d$ d$ d$ d$
nce hypothesis. d$
3. Differentiate between types of assurance services. d$ d$ d$ d$ d$
Assurance services include financial statement audits, complianceaudits, performance aud
d$ d$ d$ d$ d$ d$ d$ d$
its, comprehensive audits, internal audits,and assurance on corporate social responsibilit
d$ d$ d$ d$ d$ d$ d$ d$ d$
y (CSR) disclosures.
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4. Explain the different levels of assurance. d$ d$ d$ d$ d$
The different levels of assurance include reasonable assurance, whichis the highest level
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of assurance, limited assurance, and no assurance.Reasonable assurance is provided o
d$ d$ d$ d$ d$ d$ d$ d$ d$ d$
n an audit of a company‘sfinancial statements. Limited assurance is provided in a revie
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acompany‘s financial Dsotwante
l om ednbtsy:.BNRo
ade d $ aTsEsRuSrTaUnDcIeESis| jp
I GH amroohvriadbehd in70a@cgm
asa omail.p
coilm
ationengagem
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extrad $ pePrd$ayegae
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2
,TEST BANK for Auditing A Practical Approach, 4th Canadian Edition Moroney, Campbell, Warr
d$ d$ d$ d$ d$ d$ d$ d$ d$ d$ d$ d$
Stuvia.com -
en
d$
The Marketplace to Buy and Sell your Study Material
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w ofd$
acompany‘s financial Dsotwante
d $ l om ednbtsy:.BNRo
ade aTsEsRuSrTaUnDcIeESis| jp
I GH amroohvriadbehd
d $ in70a@cgm
asa omail.p
coilm
ationengagem
Weannttt.o d $ earnd $ $1.23
6
extrad $ pePrd$ayegae
A+ Distributiond$ofd$thisd$documentd$isd$ille
gal
2
, TEST BANK for Auditing A Practical Approach, 4th Canadian Edition Moroney, Campbell, Warr
d$ d$ d$ d$ d$ d$ d$ d$ d$ d$ d$ d$
Stuvia.com -
en
d$
The Marketplace to Buy and Sell your Study Material d$ d$ d$ d$ d$ d$ d$ d$ d$
5. Outline different audit opinionsd$ d$ d$
An auditor can issue an unmodified opinion, also known as a cleanreport, or an unmodifi
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ed opinion with an emphasis of matter paragraph.Alternatively, a modified opinion may
d$ d$ d$ d$ d$ d$ d$ d$ d$ d$ d$ d$
be issued as a qualified, anadverse, or a disclaimer of opinion.
d$ d$ d$ d$ d$ d$ d$ d$ d$ d$
6. Differentiate between the roles of the preparer and the auditor, and discuss t
d$ d$ d$ d$ d$ d$ d$ d$ d$ d$ d$ d$
he different firms that provide assurance services.
d$ d$ d$ d$ d$ d$
It is the responsibility of a company‘s governing body to ensure thatits financial stateme
d$ d$ d$ d$ d$ d$ d$ d$ d$ d$ d$ d$ d$
nts are relevant, reliable, comparable, understandable,and true and fair. It is the responsi
d$ d$ d$ d$ d$ d$ d$ d$ d$ d$ d$ d$
bility of the auditor to form anopinion on the fair presentation of the financial statements.
d$ d$ d$ d$ d$ d$ d$ d$ d$ d$ d$ d$ d$ d$ d
$ In doing,so 1- 2 Auditing: A Practical Approach, Fourth Canadian Edition
d$ d$ d$ d$ d$ d$ d$ d$ d$ d$
the auditor must maintain professional scepticism and utilize professionaljudgement and d
d$ d$ d$ d$ d$ d$ d$ d$ d$ d$
ue care. d$
The firms that provide assurance services include the Big-
d$ d$ d$ d$ d$ d$ d$ d$
4international firms, the national firms (with international links),local and regional firms, a
d$ d$ d$ d$ d$ d$ d$ d$ d$ d$ d$
nd consulting firms that tend to specializein assurance of CSR and environmental disclo
d$ d$ d$ d$ d$ d$ d$ d$ d$ d$ d$ d$
sures.
7. Identify the different regulators, legislation, and regulations surrounding th
d$ d$ d$ d$ d$ d$ d$ d$
e assurance process.
d$ d$
lO M d$ d$ d$ d$ d$ d$ d$ d$ d$
o AR c P S D | 3 08 78 49 5
Introduction and Overview of Audit and Assurance d$ d$ d$ d$ d$ d$ 1 - 3
d$ d$
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