SOLUTION MANUAL FOR Auditing: A Practical Approach with Data Analytics 2nd Edition by Raymond N. Johnson, Laura D. Wiley, Robyn Moroney ISBN: 978-1119785996 COMPLETE GUIDE 100% VERIFIED A+ GRADE ASSURED!!!!!NEW LATEST UPDATE!!!!!

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,SOLUTION MANUAL FOR dt dt




Auditing A Practical Approach with Data Analytics, 2nd Edition Raymond N. Johnson, Lau
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ra Davis Wiley, Robyn Moroney, Fiona Campbell, Jane Hamilton
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Chapter 1-16 dt




CHAPTER 1 dt




Introduction and Overview of Audit and Assurance dt dt dt dt dt dt




Learning Objectives dt




1. Differentiate among assurance, attestation, and auditing services. dt dt dt dt dt dt




2. Describe the different types of assurance services.dt dt dt dt dt dt




3. Explain the demand for audit and assurance services.
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4. Discuss the different roles of the financial statement preparer and the auditor.
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5. Identify the roles of different regulators and organizations that affect the audit profession.
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6. Explain the concepts of reasonable assurance, materiality, and the nature of an unquali-
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fied/unmodified report on the audit of financial statements.
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7. Explain the concept of reasonable assurance and the nature of an unqualified report on i
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nternal controls over financial reporting.
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8. Discuss the audit expectation gap. dt dt dt dt




ANSWERS TO MULTIPLE-CHOICE QUESTIONS dt dt dt




1. C
LO 1, BT: C, Difficulty: Easy, TOT: 2 min., AACSB: None, AICPA AC: Risk Assessment, Analysis and Management, Secti
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on: Assurance, Attestation, and Audit Services
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2. A
LO 2, BT: C, Difficulty: Easy, TOT: 2 min., AACSB: None, AICPA AC: Risk Assessment, Analysis and Management, Secti
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on: Different Assurance Services
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3. B
LO 2, BT: C, Difficulty: Easy, TOT: 2 min., AACSB: None, AICPA AC: Risk Assessment, Analysis and Management, Secti
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on: Different Assurance Services
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4. C
LO 2, BT: C, Difficulty: Medium, TOT: 2 min., AACSB: None, AICPA AC: Risk Assessment, Analysis and Management, Se
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ction: Different Assurance Services
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5. C
LO 3, BT: C, Difficulty: Medium, TOT: 2 min., AACSB: None, AICPA AC: Risk Assessment, Analysis and Management, Se
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ction: Demand for Audit and Assurance Services
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,6. B
LO 4, BT: C, Difficulty: Easy, TOT: 2 min., AACSB: None, AICPA AC: Risk Assessment, Analysis and Management, Secti
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on: Preparers and Auditors
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7. A
LO 5, BT: C, Difficulty: Easy, TOT: 2 min., AACSB: None, AICPA AC: Reporting, Section: The Role of Regulators and Re
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gulations


8. D
LO 5, BT: C, Difficulty: Easy, TOT: 2 min., AACSB: None, AICPA BC: Governance Perspective, Section: The Role of Reg
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ulators and Regulations dt dt




9. D
LO 6, BT: C, Difficulty: Easy, TOT: 2 min., AACSB: None, AICPA AC: Risk Assessment, Analysis and Management, Secti
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on: Audit Report on Financial Statements
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10. C
LO 6, BT: C, Difficulty: Easy, TOT: 2 min., AACSB: None, AICPA AC: Reporting, Section: Audit Report on the Financial S
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tatements


11. B
LO 7, BT: C, Difficulty: Easy, TOT: 2 min., AACSB: None, AICPA AC: Reporting, Section: Audit Report on Internal Contr
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ols over Financial Reporting
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12. B
LO 8, BT: C, Difficulty: Medium, TOT: 2 min., AACSB: None, AICPA PC: Professional Behavior, Section: The Audit Expec
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tation Gap dt




ANSWERS TO REVIEW QUESTIONS dt dt dt




R1.1 An assurance service is any service provided by an independent practitioner that im-
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proves the quality of information, or its context, for decision makers. An independent practitioner
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can verify that the information meets relevant criteria, which provides assurance to users who inte
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nd to use the information for decision making. An assurance engagement has three parties: the a
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ssurance provider (auditor/practitioner), the party responsible for providing the information (client)
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, and the intended users of the information (investors/lenders/others who rely on the in-
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formation).
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LO 1, BT: C, Difficulty: Easy, TOT: 5 min., AACSB: None, AICPA AC: Risk Assessment, Analysis and Management, Secti
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on: Assurance, Attestation, and Audit Services
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R1.2 The criterion used in a financial statement audit to measure and evaluate subject matter is t
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he applicable financial reporting framework used by the client. The most common framework
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, used in the U.S. is Generally Accepted Accounting Principles (GAAP).
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LO 1, BT: C, Difficulty: Easy, TOT: 5 min., AACSB: None, AICPA AC: Measurement Analysis and Interpretation, Sec-
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dt tion: Assurance, Attestation, and Audit Services
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R1.3 Financial statements are not guaranteed to be free from error or fraud due to several limi-
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tations. These limitations include the nature of financial reporting, the nature of audit procedures
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and the need for the audit to be conducted within a reasonable period of time and within a rea-
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sonable budget. The nature of financial reporting causes limitations because it includes man-
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agement‘s judgment when applying accounting standards and estimates. The nature of the au-
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dit procedures is a limitation because the auditors have to rely on management to provide all the
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necessary documentation needed for the audit. The auditor may arrive at an inappropriate con-
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clusion if information is tampered with or excluded. The last limitation refers to the limited re-
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sources of time and money for an audit engagement. It would be impractical for auditors to ex-
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amine every transaction. Therefore, auditors rely on sampling measures to provide an accurate r
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epresentation of the population, and sampling cannot provide absolute assurance. dt dt dt dt dt dt dt dt dt




LO 2, BT: C, Difficulty: Medium, TOT: 15 min., AACSB: None, AICPA AC: Risk Assessment, Analysis and Management,
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Section: Different Assurance Services dt dt dt




R1.4 Management and those charged with governance can request an operational audit to help i
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mprove the efficiency and effectiveness of a company‘s operations. An organization‘s internal au
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dit department typically conducts operational audits.
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LO 2, BT: C, Difficulty: Easy, TOT: 5 min., AACSB: None, AICPA BC: Governance Perspective, Section: Different As-
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dt surance Services dt




R1.5 Investors are interested in the information that financial statements can provide about their
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investment. This includes, but is not limited to, information regarding the profitability of the com-
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pany, return on investment, going concern/continuity of operations, and dividend distributions. A
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n independent audit helps to ensure that the information in the financial statements is credible an
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d of high quality.
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LO 3, BT: C, Difficulty: Easy, TOT: 10 min., AACSB: None, AICPA BC: Governance Perspective, Section: Demand for Au
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dit and Assurance Services
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R1.6 Both the preparer and the auditor have responsibilities regarding the company‘s financial st
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atements. Management (the preparer) is in charge of preparing the financial statements. This incl
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udes ensuring the information is presented fairly and in compliance with GAAP, or other ap-
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plicable financial reporting framework. Management is responsible for designing, implementing,
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and maintaining internal control over financial reporting, as well as providing auditors with all the n
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ecessary documentation and personnel needed to complete the audit. Auditors are responsible fo
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r providing an opinion on whether the financial statements are presented fairly and in accord-
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ance with the applicable financial reporting framework. The three responsibilities of auditors are t
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o conduct the audit in accordance with the appropriate audit standards, plan and perform the audi
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t with professional skepticism, and exercise professional judgment.
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LO 4, BT: C, Difficulty: Medium, TOT: 15 min., AACSB: None, AICPA AC: Reporting, Section: Preparers and Auditors
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