Auditing: A Practical Approach, 4th Canadian Edition – Test Bank (Kindle Edition)

TESTBANK FOR AUDITING A PRACTICAL APPROACH, 4
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TH CANADIAN EDITION 4TH EDITION, KINDLE EDITION BY
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ROBYN MORONEY , FIONA CAMPBELL , JANE HAMILTO
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N , VALERIE WARREN
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, TESTvBANKvforvAuditingvAvPracticalvApproach,v4thvCanadianvEditionvMoroney,vCampbell,vWarren
Stuvia.comv-vThevMarketplacevtovBuyvandvSellvyourvStudyvMaterial
https://browsegrades.net/singlePaper/416762/testbank-for-auditing-a-practical-approach-4th-c

CHAPTER 1 v




INTRODUCTION AND OVERVIEW OF AUDIT AND ASSURANCE
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CHAPTER LEARNING OBJECTIVES
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1. Definevanvassurancevengagement.
Anvassurancevengagementvinvolvesvanvassurancevprovidervarrivingvatanvopinionvaboutvsomevi
nformationvbeingvprovidedvbyvtheirvclientvtoavthirdvparty.vAvfinancialvstatementvauditvisvonevtyp
evofvassuranceengagement.vThisvengagementvinvolvesvanvauditorvarrivingvatvanvopinionabout
v thevfairvpresentationvofvthevfinancialvstatements.vThevauditreportvisvaddressedvtovthevsharehol
dersvofvthevcompanyvbeingvaudited,butvothervusersvmayvreadvthevfinancialvstatements.vLearni
ngvaboutauditingvandvassurancevrequiresvanvunderstandingvofvauditingvandassurancevtermin
ology,vincludingvtermsvsuchvasvauditvrisk,vmateriality,internalvcontrols,vlistedventity,vandvasserti
ons.




2. Explainvwhyvtherevisvavdemandvforvauditvandvassurancevservices.
Financialvstatementvusersvincludevinvestorsv(shareholders),vsuppliers,customers,vlenders,ve
mployees,vgovernments,vandvthevgeneralvpublic.Thesevgroupsvofvusersvdemandvauditedvfinan
cialvstatementsvbecausevoftheirvremotenessvfromvtheventity,vaccountingvcomplexity,vtheirince
ntivescompetingvwithvthosevofvtheventity‘svmanagers,vandvtheirvneedforvreliablevinformationvon
v whichvtovbasevdecisions.vThevtheoriesvusedtovdescribevthevdemandvforvauditvandvassurancevs
ervicesvarevagencytheory,vthevinformationvhypothesis,vandvthevinsurancevhypothesis.




3. Differentiatevbetweenvtypesvofvassurancevservices.
Assurancevservicesvincludevfinancialvstatementvaudits,vcomplianceaudits,vperformancevaudits
,vcomprehensivevaudits,vinternalvaudits,andvassurancevonvcorporatevsocialvresponsibilityv(CS
R)vdisclosures.




4. Explainvthevdifferentvlevelsvofvassurance.
Thevdifferentvlevelsvofvassurancevincludevreasonablevassurance,vwhichisvthevhighestvlevelvofva
ssurance,vlimitedvassurance,vandvnovassurance.Reasonablevassurancevisvprovidedvonvanvau
ditvofvavcompany‘sfinancialvstatements.vLimitedvassurancevisvprovidedvinvavreviewvof




acompany‘sv financial Dsotwante
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, TESTvBANKvforvAuditingvAvPracticalvApproach,v4thvCanadianvEditionvMoroney,vCampbell,vWarren
Stuvia.comv-vThevMarketplacevtovBuyvandvSellvyourvStudyvMaterial
https://browsegrades.net/singlePaper/416762/testbank-for-auditing-a-practical-approach-4th-c

5. Outlinevdifferentvauditvopinions
Anvauditorvcanvissuevanvunmodifiedvopinion,valsovknownvasvavcleanreport,vorvanvunmodifiedvop
inionvwithvanvemphasisvofvmattervparagraph.Alternatively,vavmodifiedvopinionvmayvbevissuedva
svavqualified,vanadverse,vorvavdisclaimervofvopinion.




6. Differentiatevbetweenvthevrolesvofvthevpreparervandvthevauditor,vandvdiscussvthev
differentvfirmsvthatvprovidevassurancevservices.
Itvisvthevresponsibilityvofvavcompany‘svgoverningvbodyvtovensurevthatitsvfinancialvstatementsvar
evrelevant,vreliable,vcomparable,vunderstandable,andvtruevandvfair.vItvisvthevresponsibilityvofvth
evauditorvtovformvanopinionvonvthevfairvpresentationvofvthevfinancialvstatements.vInvdoing,sov1-
v 2vAuditing:vAvPracticalvApproach,vFourthvCanadianvEdition



thevauditorvmustvmaintainvprofessionalvscepticismvandvutilizevprofessionaljudgementvandvduev
care.


ThevfirmsvthatvprovidevassurancevservicesvincludevthevBig-
4internationalvfirms,vthevnationalvfirmsv(withvinternationalvlinks),localvandvregionalvfirms,vandvc
onsultingvfirmsvthatvtendvtovspecializeinvassurancevofvCSRvandvenvironmentalvdisclosures.




7. Identifyvthevdifferentvregulators,vlegislation,vandvregulationsvsurroundingvthev
assurancevprocess.
lO M v v v v v vv v v
o AR c P S D | 30 8 78 49 5




IntroductionvandvOverviewvofvAuditvandvAssurance 1v-v3




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Stuvia.comv-vThevMarketplacevtovBuyvandvSellvyourvStudyvMaterial
https://browsegrades.net/singlePaper/416762/testbank-for-auditing-a-practical-approach-4th-c
TRUE-FALSE STATEMENTS v




1. Onlyvcurrentvinvestorsv(notvpotentialvinvestors)varevconsideredvtovbevusersvofvthevfinancialv
statements.


Answer:vFalse


Bloomcode:vKnowledgevDiffic
ulty:vEasy
LearningvObjective:vExplainvwhyvtherevisvavdemandvforvauditvandvassurancevservices.vSectio
nvReference:v1.2vDemandvforvauditvandvassurancevservices
CPAvCompetency:vAuditvandvAssurancevAACSB
:vAnalytic




2. Insurancevhypothesisvisvavmeansvwherebyvthevinvestorvcanvguaranteevthevsuccessvofvtheirvi
nvestment.


Answer:vFalse


Bloomcode:vComprehensionv
Difficulty:vMedium
LearningvObjective:vExplainvwhyvtherevisvavdemandvforvauditvandvassurancevservices.vSectio
nvReference:v1.2vDemandvforvauditvandvassurancevservices
CPAvCompetency:vAuditvandvAssurancevAACSB
:vAnalytic




3. Avcompliancevauditvinvolvesvgatheringvevidencevtovascertainvwhethervthevpersonvorventityv
undervreviewvhasvfollowedvthevrules,vpolicies,vprocedures,vlawsvandvregulationsvwithvwhichvt
heyvmustvconform


Answer:vTrue


Bloomcode:vComprehensionv
Difficulty:vMedium
LearningvObjective:vDifferentiatevbetweenvtypesvofvassurancevservices.vSecti
onvReference:v1.3vDifferentvassurancevservices
CPAvCompetency:vAuditvandvAssurancevAACSB
:vAnalytic

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