Test Bank for Auditing: A Practical Approach 4th Edition – Moroney, Campbell, Hamilton

https://browsegrades.net/singlePaper/416762/testbank-for-auditing-a-practical-approach-4th-c


TESTBANKlFORlAUDITINGlAlPRACTICALlAPPROACH,l4

THlCANADIANlEDITIONl4THlEDITION,lKINDLElEDITIONlBYl

ROBYNlMORONEYl,lFIONAlCAMPBELLl,lJANElHAMILTO

Nl,lVALERIElWARREN

, TESTlBANKlforlAuditinglAlPracticallApproach,l4thlCanadianlEditionlMoroney,lCampbell,lWarren
Stuvia.coml-lThelMarketplaceltolBuylandlSelllyourlStudylMaterial
https://browsegrades.net/singlePaper/416762/testbank-for-auditing-a-practical-approach-4th-c

CHAPTER 1 l




INTRODUCTIONlANDlOVERVIEWlOFlAUDITlANDlASSURANCE

CHAPTERlLEARNINGlOBJECTIVES



1. Definelanlassurancelengagement.
Anlassurancelengagementlinvolveslanlassurancelproviderlarrivinglatanlopinionlaboutlsomelinf
ormationlbeinglprovidedlbyltheirlclientltoalthirdlparty.lAlfinanciallstatementlauditlisloneltypelofla
ssuranceengagement.lThislengagementlinvolveslanlauditorlarrivinglatlanlopinionaboutlthelfair
lpresentationloflthelfinanciallstatements.lThelauditreportlisladdressedltolthelshareholdersloflth

elcompanylbeinglaudited,butlotherluserslmaylreadlthelfinanciallstatements.lLearninglaboutau
ditinglandlassurancelrequireslanlunderstandingloflauditinglandassurancelterminology,lincludi
ngltermslsuchlaslauditlrisk,lmateriality,internallcontrols,llistedlentity,landlassertions.




2. Explainlwhyltherelislaldemandlforlauditlandlassurancelservices.
Financiallstatementluserslincludelinvestorsl(shareholders),lsuppliers,customers,llenders,lem
ployees,lgovernments,landlthelgenerallpublic.Theselgroupsloflusersldemandlauditedlfinanciall
statementslbecauseloftheirlremotenesslfromlthelentity,laccountinglcomplexity,ltheirincentives
competinglwithlthoseloflthelentity‘slmanagers,landltheirlneedforlreliablelinformationlonlwhichlto
lbaseldecisions.lTheltheorieslusedtoldescribeltheldemandlforlauditlandlassurancelserviceslarel

agencytheory,lthelinformationlhypothesis,landlthelinsurancelhypothesis.




3. Differentiatelbetweenltypesloflassurancelservices.
Assurancelserviceslincludelfinanciallstatementlaudits,lcomplianceaudits,lperformancelaudits,l
comprehensivelaudits,linternallaudits,andlassurancelonlcorporatelsociallresponsibilityl(CSR)l
disclosures.




4. Explainltheldifferentllevelsloflassurance.
Theldifferentllevelsloflassurancelincludelreasonablelassurance,lwhichislthelhighestllevelloflass
urance,llimitedlassurance,landlnolassurance.Reasonablelassurancelislprovidedlonlanlauditlofl
alcompany‘sfinanciallstatements.lLimitedlassurancelislprovidedlinlalreviewlof




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, TESTlBANKlforlAuditinglAlPracticallApproach,l4thlCanadianlEditionlMoroney,lCampbell,lWarren
Stuvia.coml-lThelMarketplaceltolBuylandlSelllyourlStudylMaterial
https://browsegrades.net/singlePaper/416762/testbank-for-auditing-a-practical-approach-4th-c

5. Outlineldifferentlauditlopinions
Anlauditorlcanlissuelanlunmodifiedlopinion,lalsolknownlaslalcleanreport,lorlanlunmodifiedlopini
onlwithlanlemphasisloflmatterlparagraph.Alternatively,lalmodifiedlopinionlmaylbelissuedlaslalq
ualified,lanadverse,lorlaldisclaimerloflopinion.




6. Differentiatelbetweenlthelrolesloflthelpreparerlandlthelauditor,landldiscussltheldif
ferentlfirmslthatlprovidelassurancelservices.
Itlislthelresponsibilityloflalcompany‘slgoverninglbodyltolensurelthatitslfinanciallstatementslarelr
elevant,lreliable,lcomparable,lunderstandable,andltruelandlfair.lItlislthelresponsibilityloflthelaud
itorltolformlanopinionlonlthelfairlpresentationloflthelfinanciallstatements.lInldoing,sol1-
l2lAuditing:lAlPracticallApproach,lFourthlCanadianlEdition




thelauditorlmustlmaintainlprofessionallscepticismlandlutilizelprofessionaljudgementlandlduelca
re.


ThelfirmslthatlprovidelassurancelserviceslincludelthelBig-
4internationallfirms,lthelnationallfirmsl(withlinternationalllinks),locallandlregionallfirms,landlcon
sultinglfirmslthatltendltolspecializeinlassuranceloflCSRlandlenvironmentalldisclosures.




7. Identifyltheldifferentlregulators,llegislation,landlregulationslsurroundinglthela
ssurancelprocess.
lOM l l l l l ll l l
oA R c P S D | 3 08 78 49 5




IntroductionlandlOverviewloflAuditlandlAssurance 1l-l3




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, TESTlBANKlforlAuditinglAlPracticallApproach,l4thlCanadianlEditionlMoroney,lCampbell,lWarren
Stuvia.coml-lThelMarketplaceltolBuylandlSelllyourlStudylMaterial
https://browsegrades.net/singlePaper/416762/testbank-for-auditing-a-practical-approach-4th-c
TRUE-FALSElSTATEMENTS

1. Onlylcurrentlinvestorsl(notlpotentiallinvestors)larelconsideredltolbelusersloflthelfinanciallstat
ements.


Answer:lFalse


Bloomcode:lKnowledgelDiffic
ulty:lEasy
LearninglObjective:lExplainlwhyltherelislaldemandlforlauditlandlassurancelservices.lSectionlR
eference:l1.2lDemandlforlauditlandlassurancelservices
CPAlCompetency:lAuditlandlAssurancelAACSB:l
Analytic




2. Insurancelhypothesislislalmeanslwherebylthelinvestorlcanlguaranteelthelsuccesslofltheirlinv
estment.


Answer:lFalse


Bloomcode:lComprehensionl
Difficulty:lMedium
LearninglObjective:lExplainlwhyltherelislaldemandlforlauditlandlassurancelservices.lSectionlR
eference:l1.2lDemandlforlauditlandlassurancelservices
CPAlCompetency:lAuditlandlAssurancelAACSB:l
Analytic




3. Alcompliancelauditlinvolveslgatheringlevidenceltolascertainlwhetherlthelpersonlorlentitylun
derlreviewlhaslfollowedlthelrules,lpolicies,lprocedures,llawslandlregulationslwithlwhichltheyl
mustlconform


Answer:lTrue


Bloomcode:lComprehensionl
Difficulty:lMedium
LearninglObjective:lDifferentiatelbetweenltypesloflassurancelservices.lSection
lReference:l1.3lDifferentlassurancelservices

CPAlCompetency:lAuditlandlAssurancelAACSB:l
Analytic

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3