Solutions Manual – Auditing: A Practical Approach with Data Analytics, 2nd Edition – Laura Davis Wiley, Raymond N. Johnson, Robyn Moroney – ISBN 9781119785996 (All Chapters Covered 1–16)

Auditing:
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A Practical Approach with
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Data Analytics, 2nd Edition
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SOLUTIONS
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MANUAL
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Laura Davis Wiley
Raymond N. Johnson
Robyn Moroney
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Comprehensive Solutions Manual for Instructors
and Students
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9781119785996
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© Laura Davis Wiley, Raymond N. Johnson, & Robyn Moroney. All
rights reserved. Reproduction or distribution without permission is
prohibited.




© MEDCONNOISSEUR

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Auditing: A Practical Approach — Solutions Manual
Robyn Moroney, Fiona Campbell, Jane Hamilton and Valerie Warren
ISBN: 9781119785996
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Chapter 1: Introduction and Overview of Audit and Assurance
Chapter 2: Ethics, Legal Liability, and Quality Control
Chapter 3: Risk Assessment Part I
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Chapter 4: Risk Assessment Part II
Chapter 5: Audit Evidence
Chapter 6: Gaining an Understanding of the Client’s System of Internal Control
Chapter 7: Risk Response: Performing Tests of Controls
Chapter 8: Substantive Testing and Audit Data Analytics
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Chapter 9: Audit Sampling
Chapter 10: Execution of the Audit: Revenue Cycle
Chapter 11: Execution of the Audit: Purchasing and Payroll Cycles
Chapter 12: Execution of the Audit: Inventory and Cash
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Chapter 13: Execution of the Audit: Non-Current Assets and Liabilities
Chapter 14: Completing the Audit
Chapter 15: Reporting on the Audit
Chapter 16: Other Assurance Services
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© MEDCONNOISSEUR

, SOLUTION MANUAL FOR
Auditing A Practical Approach with Data Analytics, 2nd Edition Raymond N. Johnson,
Laura Davis Wiley, Robyn Moroney, Fiona Campbell, Jane Hamilton
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Chapter 1-16
CHAPTER 1
Introduction and Overview of Audit and Assurance
Learning Objectives
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1. Differentiate among assurance, attestation, and auditing services.
2. Describe the different types of assurance services.
3. Explain the demand for audit and assurance services.
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.
6. Explain the concepts of reasonable assurance, materiality, and the nature of an unquali-
fied/unmodified report on the audit of financial statements.
7. Explain the concept of reasonable assurance and the nature of an unqualified report on
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internal controls over financial reporting.
8. Discuss the audit expectation gap.



ANSWERS TO MULTIPLE-CHOICE QUESTIONS
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1. C
LO 1, BT: C, Difficulty: Easy, TOT: 2 min., AACSB: None, AICPA AC: Risk Assessment, Analysis and Management,
Section: 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,
Section: 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,
Section: Different Assurance Services


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


5. C
LO 3, BT: C, Difficulty: Medium, TOT: 2 min., AACSB: None, AICPA AC: Risk Assessment, Analysis and Management,
Section: Demand for Audit and Assurance Services

For Instructor Use Only

, 6. B
LO 4, BT: C, Difficulty: Easy, TOT: 2 min., AACSB: None, AICPA AC: Risk Assessment, Analysis and Management,
Section: 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
Regulations
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8. D
LO 5, BT: C, Difficulty: Easy, TOT: 2 min., AACSB: None, AICPA BC: Governance Perspective, Section: The Role of
Regulators and Regulations


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


10. C
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LO 6, BT: C, Difficulty: Easy, TOT: 2 min., AACSB: None, AICPA AC: Reporting, Section: Audit Report on the Financial
Statements


11. B
LO 7, BT: C, Difficulty: Easy, TOT: 2 min., AACSB: None, AICPA AC: Reporting, Section: Audit Report on Internal
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Controls over Financial Reporting


12. B
LO 8, BT: C, Difficulty: Medium, TOT: 2 min., AACSB: None, AICPA PC: Professional Behavior, Section: The Audit
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Expectation Gap

ANSWERS TO REVIEW QUESTIONS
R1.1 An assurance service is any service provided by an independent practitioner that im-
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
intend to use the information for decision making. An assurance engagement has three parties:
the assurance provider (auditor/practitioner), the party responsible for providing the information
(client), and the intended users of the information (investors/lenders/others who rely on the in-
formation).
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LO 1, BT: C, Difficulty: Easy, TOT: 5 min., AACSB: None, AICPA AC: Risk Assessment, Analysis and Management,
Section: Assurance, Attestation, and Audit Services


R1.2 The criterion used in a financial statement audit to measure and evaluate subject matter is
the applicable financial reporting framework used by the client. The most common framework


For Instructor Use Only