https://www.stuvia.com/user/THEPROWESS
SOLUTION MANUAL FOR
Principles Of Auditing And Other Assurance Services
23rd Edition By Ray Whittington Kurt
ALL Chapters (1 - 21)
https://www.stuvia.com/user/THEPROWESS
,https://www.stuvia.com/user/THEPROWESS
• 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
https://www.stuvia.com/user/THEPROWESS
,https://www.stuvia.com/user/THEPROWESS
CHAPTER 1 cv
The Role of the cv cv cv
cv Public Accountant in
cv cv
cv the
American Economy cv
Review cvQuestions
1-1 The cv―crisis cvof cvcredibility‖ cvlargely cvarose cvfrom cvthe cvnumber cvof cvcompanies cvthat cvrestated cvtheir
cvpreviously cvissued cvfinancial cvstatements cv as cv a cv result cv of c v accounting cvirregularities cv and cvfraud.
c v Especially cvresponsible cvwerevcthe cvvery cvvisible cvEnron cv and cvWorldCom cvfraud cv cases. cvBoth cvcompanies
c v filed cv for cv bankruptcy cvand cv constituted cvthe cvlargest cv companies cv in cvAmerican cvhistory cvto cvdo cvso.
c v The cvextent cv of cv the cvaccounting cvirregularities cv and cvfraud cvbeing cvinvestigated cvand cvdisclosed cvbrought
cv into cvquestion cvthe cveffectiveness cv of cv financial cvstatement cv audits. c v In cvaddition, cvthe cvcriminal
cvconviction cvof cvArthur cvAndersen, cvLLP, cvone cvof cvthe cvthen cvBig cv5 cv accounting cvfirms, cvon cvcharges cv of
cv destroying cvdocuments cv related cvto cv the cvEnron cvcase cvbrought cv into cvquestion cvthe cvethics cv standards cv of
cvthe cvprofession.
1-2 Assurance cvservices cvare cvprofessional cvservices cvthat cvenhance cvthe cvquality cvof cvinformation, cvor cvits
cvcontext, cvfor cvdecision-making. cvThe cvtwo cvtypes cvare: cv(a) cvthose cvthat cvincrease cvthe cvreliability cvof
cvinformation cvand cv(b) cvthose cvthat cvinvolve cvputting cvinformation cvin cva cvform cvor cvcontext cvthat
cvfacilitates cvdecision-making.
1-3 A cvfinancial cvstatement cv audit cv is, cvby cvfar, cvthe cvmost cv common cvtype cvof cv attest cv engagement. c v The
cvoverall cvassertion,vm
c ade cvby cvmanagement, cvmost cvfrequently cvis cvthat cvthe cvfinancial cvstatements cvfollow
cvgenerally cvaccepted cvaccounting cvprinciples.
1-4 A cvlarge cvcorporation cvwith cvsecurities cvlisted cvon cva cvstock cvexchange cvis cvrequired cvby cvthe cvrules cvof cvthe
cvstock cvexchange cvand cvby cvthe cvrules cv of cv the cvSecurities c v and cvExchange cvCommission cvto cvprovide cvan
cvaudit cv report cv with cvthevcannual cvfinancial cvstatements cv furnished cvto cvits cv stockholders. c v It cv also cvis
cv required cvto cvengage cvthe cvauditors cv to cvprovide cvan cvopinion cvon cvits cvinternal cvcontrol. cvApart cvfrom
cvlegal cvrequirements, cvhowever, cva cvlarge cvlisted cvcorporation cvrecognizes cv that cv it cv must cv maintain
cvinvestor cvconfidence cvin cv the cvreliability cvof cv its cv financial cvstatements c v and cv internal cv control cv over
c v financial cv reporting c v if c v it c v is c v to cv continue cv to cv be cv able cv to cv secure cv capital cvfrom cvthe cvpublic. cv The
cvreport cv by cva cv firm cvof cv certified cvpublic cvaccountants cv adds cv credibility cvto cvthe cvfinancial cvstatements
cv prepared cvby cvthe cvcorporation. c v When cva cv small cvfamily-owned cventerprise cvelects cv to cvhave cvan cvaudit,
https://www.stuvia.com/user/THEPROWESS
, https://www.stuvia.com/user/THEPROWESS
cvthe cvpurpose cvusually cvis cv to cvuse cvthe cvauditors' cvreport cv to cvsupport cv an cvapplication c v for cv a cvbank cvloan.
https://www.stuvia.com/user/THEPROWESS
SOLUTION MANUAL FOR
Principles Of Auditing And Other Assurance Services
23rd Edition By Ray Whittington Kurt
ALL Chapters (1 - 21)
https://www.stuvia.com/user/THEPROWESS
,https://www.stuvia.com/user/THEPROWESS
• 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
https://www.stuvia.com/user/THEPROWESS
,https://www.stuvia.com/user/THEPROWESS
CHAPTER 1 cv
The Role of the cv cv cv
cv Public Accountant in
cv cv
cv the
American Economy cv
Review cvQuestions
1-1 The cv―crisis cvof cvcredibility‖ cvlargely cvarose cvfrom cvthe cvnumber cvof cvcompanies cvthat cvrestated cvtheir
cvpreviously cvissued cvfinancial cvstatements cv as cv a cv result cv of c v accounting cvirregularities cv and cvfraud.
c v Especially cvresponsible cvwerevcthe cvvery cvvisible cvEnron cv and cvWorldCom cvfraud cv cases. cvBoth cvcompanies
c v filed cv for cv bankruptcy cvand cv constituted cvthe cvlargest cv companies cv in cvAmerican cvhistory cvto cvdo cvso.
c v The cvextent cv of cv the cvaccounting cvirregularities cv and cvfraud cvbeing cvinvestigated cvand cvdisclosed cvbrought
cv into cvquestion cvthe cveffectiveness cv of cv financial cvstatement cv audits. c v In cvaddition, cvthe cvcriminal
cvconviction cvof cvArthur cvAndersen, cvLLP, cvone cvof cvthe cvthen cvBig cv5 cv accounting cvfirms, cvon cvcharges cv of
cv destroying cvdocuments cv related cvto cv the cvEnron cvcase cvbrought cv into cvquestion cvthe cvethics cv standards cv of
cvthe cvprofession.
1-2 Assurance cvservices cvare cvprofessional cvservices cvthat cvenhance cvthe cvquality cvof cvinformation, cvor cvits
cvcontext, cvfor cvdecision-making. cvThe cvtwo cvtypes cvare: cv(a) cvthose cvthat cvincrease cvthe cvreliability cvof
cvinformation cvand cv(b) cvthose cvthat cvinvolve cvputting cvinformation cvin cva cvform cvor cvcontext cvthat
cvfacilitates cvdecision-making.
1-3 A cvfinancial cvstatement cv audit cv is, cvby cvfar, cvthe cvmost cv common cvtype cvof cv attest cv engagement. c v The
cvoverall cvassertion,vm
c ade cvby cvmanagement, cvmost cvfrequently cvis cvthat cvthe cvfinancial cvstatements cvfollow
cvgenerally cvaccepted cvaccounting cvprinciples.
1-4 A cvlarge cvcorporation cvwith cvsecurities cvlisted cvon cva cvstock cvexchange cvis cvrequired cvby cvthe cvrules cvof cvthe
cvstock cvexchange cvand cvby cvthe cvrules cv of cv the cvSecurities c v and cvExchange cvCommission cvto cvprovide cvan
cvaudit cv report cv with cvthevcannual cvfinancial cvstatements cv furnished cvto cvits cv stockholders. c v It cv also cvis
cv required cvto cvengage cvthe cvauditors cv to cvprovide cvan cvopinion cvon cvits cvinternal cvcontrol. cvApart cvfrom
cvlegal cvrequirements, cvhowever, cva cvlarge cvlisted cvcorporation cvrecognizes cv that cv it cv must cv maintain
cvinvestor cvconfidence cvin cv the cvreliability cvof cv its cv financial cvstatements c v and cv internal cv control cv over
c v financial cv reporting c v if c v it c v is c v to cv continue cv to cv be cv able cv to cv secure cv capital cvfrom cvthe cvpublic. cv The
cvreport cv by cva cv firm cvof cv certified cvpublic cvaccountants cv adds cv credibility cvto cvthe cvfinancial cvstatements
cv prepared cvby cvthe cvcorporation. c v When cva cv small cvfamily-owned cventerprise cvelects cv to cvhave cvan cvaudit,
https://www.stuvia.com/user/THEPROWESS
, https://www.stuvia.com/user/THEPROWESS
cvthe cvpurpose cvusually cvis cv to cvuse cvthe cvauditors' cvreport cv to cvsupport cv an cvapplication c v for cv a cvbank cvloan.
https://www.stuvia.com/user/THEPROWESS
