TestBank for Auditing A Practical Approach, 4th Canadian Edition 4th Edition, Kindle Edition by Robyn Moroney , Fiona Campbell , Jane Hamilton , Valerie Warren /// DR ERIC INTRODUCTION AND OVERVIEW OF AUDIT AND ASSURANCE CHAPTER LEARNING OBJECTI

TestBank for Auditing A Practical Approach, 4th Canadian Edition 4th Edition, Kindle Edition by Robyn Moroney , Fiona Campbell , Jane Hamilton , Valerie Warren /// DR ERIC INTRODUCTION AND OVERVIEW OF AUDIT AND ASSURANCE CHAPTER LEARNING OBJECTIVES 1. Define an assurance engagement. An assurance engagement involves an assurance provider arriving atan opinion about some information being provided by their client toa third party. A financial statement audit is one type of assuranceengagement. This engagement involves an auditor arriving at an opinionabout the fair presentation of the financial statements. The auditreport is addressed to the shareholders of the company being audited,but other users may read the financial statements. Learning aboutauditing and assurance requires an understanding of auditing andassurance terminology, including terms such as audit risk, materiality,internal controls, listed entity, and assertions. 2. Explain why there is a demand for audit and assurance services. Financial statement users include investors (shareholders), suppliers,customers, lenders, employees, governments, and the general public.These groups of users demand audited financial statements because oftheir remoteness from the entity, accounting complexity, theirincentivescompeting with those of the entity‘s managers, and their needfor reliable information on which to base decisions. The theories usedto describe the demand for audit and assurance services are agencytheory, the information hypothesis, and the insurance hypothesis. 3. Differentiate between types of assurance services. Assurance services include financial statement audits, complianceaudits, performance audits, comprehensive audits, internal audits,and assurance on corporate social responsibility (CSR) disclosures. 4. Explain the different levels of assurance. The different levels of assurance include reasonable assurance, whichis the highest level of assurance, limited assurance, and no assurance.Reasonable assurance is provided on an audit of a company‘sfinancial statements. Limited assurance is provided in a review of acompany‘s financialDsotwante lom ade ednbts y:.BN Ro IGH aTsEsRuSra TUnDcIe ESis| jp am roohvriadbe hd asa in 70a@c gm om ail.p co ilm ationengagemWeannttt.o earn $1.236 Distribution of this document is illegal extra pePr a yegaer? 2 A+ TEST BANK for Auditing A Practical Approach, 4th Canadian Edition Moroney, Campbell, Warren S - The Marketplace to Buy and Sell your Study Material 3 Downloaded by: BRIGHTERSTUDIES | Distribution of this document is illegal Want to earn $1.236 extra pePr a yegaer? A+ 5. Outline different audit opinions An auditor can issue an unmodified opinion, also known as a cleanreport, or an unmodified opinion with an emphasis of matter paragraph.Alternatively, a modified opinion may be issued as a qualified, anadverse, or a disclaimer of opinion. 6. Differentiate between the roles of the preparer and the auditor, and discuss the different firms that provide assurance services. It is the responsibility of a company‘s governing body to ensure thatits financial statements are relevant, reliable, comparable, understandable,and true and fair. It is the responsibility of the auditor to form anopinion on the fair presentation of the financial statements. In doing,so 1- 2 Auditing: A Practical Approach, Fourth Canadian Edition the auditor must maintain professional scepticism and utilize professionaljudgement and due care. The firms that provide assurance services include the Big-4international firms, the national firms (with international links),local and regional firms, and consulting firms that tend to specializein assurance of CSR and environmental disclosures. 7. Identify the different regulators, legislation, and regulations surrounding the assurance process. lOMoAR cPSD| Introduction and Overview of Audit and Assurance 1 - 3 TEST BANK for Auditing A Practical Approach, 4th Canadian Edition Moroney, Campbell, Warren S - The Marketplace to Buy and Sell your Study Material TRUE-FALSE STATEMENTS 1. Only current investors (not potential investors) are considered to be users of the financial statements. Answer: False Bloomcode: Knowledge Difficulty: Easy Learning Objective: Explain why there is a demand for audit and assurance services. Section Reference: 1.2 Demand for audit and assurance services CPA Competency: Audit and Assurance AACSB: Analytic 2. Insurance hypothesis is a means whereby the investor can guarantee the success of their investment. Answer: False Bloomcode: Comprehension Difficulty: Medium Learning Objective: Explain why there is a demand for audit and assurance services. Section Reference: 1.2 Demand for audit and assurance services CPA Competency: Audit and Assurance AACSB: Analytic 3. A compliance audit involves gathering evidence to ascertain whether the person or entity under review has followed the rules, policies, procedures, laws and regulations with which they must conform Answer: True Bloomcode: Comprehension Difficulty: Medium Learning Objective: Differentiate between types of assurance services. Section Reference: 1.3 Different assurance services CPA Competency: Audit and Assurance AACSB: Analytic Downloaded by: BRIGHTERSTUDIES | A+ Distribution of this document is illegal Want to earn $1.236 extra pePr a yegaer? 4 TEST BANK for Auditing A Practical Approach, 4th Canadian Edition Moroney, Campbell, Warren S - The Marketplace to Buy and Sell your Study Material 4. An operational audit is an example of a compliance audit. Answer: False Bloomcode: Knowledge Difficulty: Medium Learning Objective: Differentiate between types of assurance services. Section Reference: 1.3 Different assurance services CPA Competency: Audit and Assurance AACSB: Analytic 1- 4 Auditing: A Practical Approach, Fourth Canadian Edition 5. The most common types of assurance engagements are financial statement audits, confirmation audits, performance audits, comprehensive audits and assurance on corporate social responsibility (CSR) disclosures. Answer: False Bloomcode: Comprehension Difficulty: Medium Learning Objective: Differentiate between types of assurance services. Section Reference: 1.3 Different assurance services CPA Competency: Audit and Assurance AACSB: Analytic 6. The nature of audit procedures refers to the reliance on evidence provided by the client and its management. Answer: True Bloomcode: Knowledge Difficulty: Medium Learning Objective: Differentiate between types of assurance services. Section Reference: 1.3 Different assurance services CPA Competency: Audit and Assurance AACSB: Analytic 7. It is the auditor‘s responsibility to prepare the financial statements. Downloaded by: BRIGHTERSTUDIES | A+ Distribution of this document is illegal Want to earn $1.236 extra pePr a yegaer? 4 TEST BANK for Auditing A Practical Approach, 4th Canadian Edition Moroney, Campbell, Warren S - The Marketplace to Buy and Sell your Study Material Answer: False Bloomcode: Knowledge Difficulty: Medium Learning Objective: Differentiate between types of assurance services. Section Reference: 1.3 Different assurance services CPA Competency: Audit and Assurance AACSB: Analytic 8. An auditor can provide a reasonable level of assurance on information other than historical financial information. Answer: True Bloomcode: Comprehension Difficulty: Easy Learning Objective: Explain the different levels of assurance. Section Reference: 1.4 Different levels of assurance CPA Competency: Audit and Assurance AACSB: Analytic 9. A reasonable level of assurance is the highest level of assurance that an auditor can provide. . Answer: True Bloomcode: Comprehension Difficulty: Medium Learning Objective: Explain the different levels of assurance. Section Reference: 1.4 Different levels of assurance CPA Competency: Audit and Assurance AACSB: Analytic 10. A no assurance engagement is of little use as no assurance is given to the client. Answer: False Bloomcode: Comprehension