SOLUTION MANUAL FOR Principles Of Auditing And Other Assurance Services 23rd Edition By Ray Whittington Kurt ALL Chapters (1 - 21) Complete Solutions

SOLUTION MANUAL FOR

Principles Of Auditing And Other Assurance Services



23rd Edition By Ray Whittington Kurt
ALL Chapters (1 - 21)




•

•

•

•

•

•

•

•

, •

• Table of Contents vr vr




Chapter 1: The Role of the Public Accountant in the AmericanEconomy
vr vr vr vr vr vr vr vr vr vr




Chapter 2: Professional Standards
vr vr vr




Chapter 3: Professional Ethics
vr vr vr




Chapter 4: Legal Liability of CPAs
vr vr vr vr vr




Chapter 5: Audit Evidence and Documentation
vr vr vr vr vr




Chapter 6: Audit Planning, Understanding the Client, AssessingRisks, and Responding
vr vr vr vr vr vr vr vr vr




Chapter 7: Internal Control
vr vr vr




Chapter 8: Consideration of Internal Control in an InformationTechnology Environment
vr vr vr vr vr vr vr vr vr




Chapter 9: Audit Sampling
vr vr vr




Chapter 10: Cash and Financial Investments
vr vr vr vr vr




Chapter 11: Accounts Receivable, Notes Receivable, andRevenue
vr vr vr vr vr vr




Chapter 12: Inventories and Cost of Goods Sold
vr vr vr vr vr vr vr




Chapter 13: Property, Plant, and Equipment: Depreciation andDepletion
vr vr vr vr vr vr vr




Chapter 14: Accounts Payable and Other Liabilities
vr vr vr vr vr vr




Chapter 15: Debt and Equity Capital
vr vr vr vr vr




Chapter 16: Auditing Operations and Completing the Audit
vr vr vr vr vr vr vr




Chapter 17: Auditors’ Reports
vr vr vr




Chapter 18: Integrated Audits of Public Companies
vr vr vr vr vr vr




Chapter 19: Additional Assurance Services: Historical FinancialInformation
vr vr vr vr vr vr




Chapter 20: Additional Assurance Services: Other Information
vr vr vr vr vr vr




Chapter 21: Internal, Operational, and Compliance Auditing
vr vr vr vr vr vr

,CHAPTER 1 vr




The Role of the Public vr vr vr vr




Accountant in the
r vr v r




American Economy v r




Review Questions
vr




1-1 The ―crisis of credibility‖ largely arose from the number of companies that restated their previously issued
vr vr vr vr vr vr vr vr vr vr vr vr vr vr vr v



financial statements as a result of accounting irregularities and fraud. Especially responsible werethe ver
r vr vr vr vr vr vr vr vr vr vr vr vr vr vr



y visible Enron and WorldCom fraud cases. Both companies filed for bankruptcy and constituted the larg
vr vr vr vr vr vr vr vr vr vr vr vr vr vr vr



est companies in American history to do so. The extent of the accounting irregularities and fraud being i
vr vr vr vr vr vr vr vr vr vr vr vr vr vr vr vr vr



nvestigated and disclosed brought into question the effectiveness of financial statement audits. In additio
vr vr vr vr vr vr vr vr vr vr vr vr vr



n, the criminal conviction of Arthur Andersen, LLP, one of the then Big 5 accounting firms, on charges of
vr vr vr vr vr vr vr vr vr vr vr vr vr vr vr vr vr vr



destroying documents related to the Enron case brought into question the ethics standards of the professi
vr vr vr vr vr vr vr vr vr vr vr vr vr vr vr vr



on.

1-2 Assurance services are professional services that enhance the quality of information, or its context, for
vr vr vr vr vr vr vr vr vr vr vr vr vr vr vr



decision-
making. The two types are: (a) those that increase the reliability of information and (b) those that invol
vr vr vr vr vr vr vr vr vr vr vr vr vr vr vr vr vr



ve putting information in a form or context that facilitates decision-making.
vr vr vr vr vr vr vr vr vr vr




1-3 A financial statement audit is, by far, the most common type of attest engagement. The overall assertion,
vr vr vr vr vr vr vr vr vr vr vr vr vr vr vr vr vr



made by management, most frequently is that the financial statements follow generally accepted accounti
vr vr vr vr vr vr vr vr vr vr vr vr vr



ng principles. vr




1-4 A large corporation with securities listed on a stock exchange is required by the rules of the stock exchang
vr vr vr vr vr vr vr vr vr vr vr vr vr vr vr vr vr vr



e and by the rules of the Securities and Exchange Commission to provide an audit report with theannual f
vr vr vr vr vr vr vr vr vr vr vr vr vr vr vr vr vr vr vr



inancial statements furnished to its stockholders. It also is required to engage the auditors to provide an o
vr vr vr vr vr vr vr vr vr vr vr vr vr vr vr vr vr

, pinion on its internal control. Apart from legal requirements, however, a large listed corporation recogni
vr vr vr vr vr vr vr vr vr vr vr vr vr vr



zes that it must maintain investor confidence in the reliability of its financial statements and internal contr
vr vr vr vr vr vr vr vr vr vr vr vr vr vr vr vr



ol over financial reporting if it is to continue to be able to secure capital from the public. The report by a
vr vr vr vr vr vr vr vr vr vr vr vr vr vr vr vr vr vr vr vr vr v



firm of certified public accountants adds credibility to the financial statements prepared by the corporatio
r vr vr vr vr vr vr vr vr vr vr vr vr vr vr



n. When a small family-
v r vr vr vr



owned enterprise elects to have an audit, the purpose usually is to use the auditors' report to support an ap
vr vr vr vr vr vr vr vr vr vr vr vr vr vr vr vr vr vr vr



plication for a bank loan. vr vr vr vr