SOLUTION MANUAL FOR
Principles Of Auditing And Other Assurance Services
23rd Edition By Ray Whittington Kurt
ALL Chapters (1 - 21)
, Table of Contents
oo oo
Chapteroo1:ooTheooRoleooofootheooPublicooAccountantooinootheooAmericanEconomy
Chapteroo2:ooProfessionalooStandards
Chapteroo3:ooProfessionalooEthics
Chapteroo4:ooLegalooLiabilityooofooCPAs
Chapteroo5:ooAuditooEvidenceooandooDocumentation
Chapteroo6:ooAuditooPlanning,ooUnderstandingootheooClient,ooAssessingRisks,ooandooResponding
Chapteroo7:ooInternalooControl
Chapteroo8:ooConsiderationooofooInternalooControlooinooanooInformationTechnologyooEnvironment
Chapteroo9:ooAuditooSampling
Chapteroo10:ooCashooandooFinancialooInvestments
Chapteroo11:ooAccountsooReceivable,ooNotesooReceivable,ooandRevenue
Chapteroo12:ooInventoriesooandooCostooofooGoodsooSold
Chapteroo13:ooProperty,ooPlant,ooandooEquipment:ooDepreciationooandDepletion
Chapteroo14:ooAccountsooPayableooandooOtherooLiabilities
Chapteroo15:ooDebtooandooEquityooCapital
Chapteroo16:ooAuditingooOperationsooandooCompletingootheooAudit
Chapteroo17:ooAuditors’ooReports
Chapteroo18:ooIntegratedooAuditsooofooPublicooCompanies
Chapteroo19:ooAdditionalooAssuranceooServices:ooHistoricalooFinancialInformation
Chapteroo20:ooAdditionalooAssuranceooServices:ooOtherooInformation
Chapteroo21:ooInternal,ooOperational,ooandooComplianceooAuditing
,CHAPTER 1 oo
The Role of the Pu
oo oo oo oo
blic Accountant in the
oo oo oo
American Economy oo
ReviewooQuestions
1-1 Theoo―crisisooofoocredibility‖oolargelyooaroseoofromootheoonumberooofoocompaniesoothatoorestatedootheiro
opreviouslyooissuedoofinancialoostatementsoo asoo aoo resultoo ofoo accountingooirregularitiesoo andoofraud.oo
EspeciallyooresponsibleoowereootheooveryoovisibleooEnronooandooWorldComoofraudoocases.ooBothoocomp
aniesoo filedooforoobankruptcyooandooconstitutedootheoolargestoocompaniesooinooAmericanoohistoryootooo
doooso.oo Theooextentooofootheooaccountingooirregularitiesooandoofraudoobeingooinvestigatedooandoodisclo
sedoobroughtoointoooquestionootheooeffectivenessoo ofoofinancialoostatementooaudits.oo Inooaddition,ootheo
ocriminalooconvictionooofooArthurooAndersen,ooLLP,oooneooofootheoothenooBigoo5oo accountingoofirms,oo
onoochargesooofoodestroyingoodocumentsoorelatedootoootheooEnronoocaseoobroughtoointoooquestionootheo
oethicsoo standardsoo ofootheooprofession.
1-2 Assuranceooservicesooareooprofessionalooservicesoothatooenhanceootheooqualityooofooinformation,oooroo
itsoocontext,ooforoodecision-
making.ooTheootwoootypesooare:oo(a)oothoseoothatooincreaseootheooreliabilityooofooinformationooandoo(
b)oothoseoothatooinvolveooputtingooinformationooinooaooformoooroocontextoothatoofacilitatesoodecision
-making.
1-3 Aoofinancialoostatementooauditoois,oobyoofar,ootheoomostoocommonootypeooofooattestooengagement.oo The
oooverallooassertion,oomadeoobyoomanagement,oomostoofrequentlyooisoothatootheoofinancialoostatementsoofo
llowoogenerallyooacceptedooaccountingooprinciples.
1-4 Aoolargeoocorporationoowithoosecuritiesoolistedooonooaoostockooexchangeooisoorequiredoobyootheoorulesooo
footheoostockooexchangeooandoobyootheoorulesooofoo theooSecuritiesoo andooExchangeooCommissionootooop
rovideooanooauditoo reportoo withootheooannualoofinancialoostatementsoofurnishedootoooitsoostockholders.oo It
oo alsoooisoo requiredootoooengageootheooauditorsoo toooprovideooanooopinionooonooitsoointernaloocontrol.oo
Apartoofromoolegaloorequirements,oohowever,ooaoolargeoolistedoocorporationoorecognizesoothatooitoomus
toomaintainooinvestorooconfidenceooinootheooreliabilityooofooitsoofinancialoostatementsoo andoointernalooco
ntroloooveroo financialooreportingoo ifoo itoo isoo tooo continueootooobeooableootooosecureoocapitaloofromoothe
oopublic.oo Theooreportoo byooaoofirmooofoocertifiedoopublicooaccountantsoo addsoo credibilityootoootheoofina
ncialoostatementsoopreparedoobyootheoocorporation.o o Whenooaoosmalloofamily-
ownedooenterpriseooelectsoo tooohaveooanooaudit,ootheoopurposeoousuallyooisootooouseootheooauditors'oorep
, ortootooosupportooanooapplicationoo forooaoobankooloan.
Principles Of Auditing And Other Assurance Services
23rd Edition By Ray Whittington Kurt
ALL Chapters (1 - 21)
, Table of Contents
oo oo
Chapteroo1:ooTheooRoleooofootheooPublicooAccountantooinootheooAmericanEconomy
Chapteroo2:ooProfessionalooStandards
Chapteroo3:ooProfessionalooEthics
Chapteroo4:ooLegalooLiabilityooofooCPAs
Chapteroo5:ooAuditooEvidenceooandooDocumentation
Chapteroo6:ooAuditooPlanning,ooUnderstandingootheooClient,ooAssessingRisks,ooandooResponding
Chapteroo7:ooInternalooControl
Chapteroo8:ooConsiderationooofooInternalooControlooinooanooInformationTechnologyooEnvironment
Chapteroo9:ooAuditooSampling
Chapteroo10:ooCashooandooFinancialooInvestments
Chapteroo11:ooAccountsooReceivable,ooNotesooReceivable,ooandRevenue
Chapteroo12:ooInventoriesooandooCostooofooGoodsooSold
Chapteroo13:ooProperty,ooPlant,ooandooEquipment:ooDepreciationooandDepletion
Chapteroo14:ooAccountsooPayableooandooOtherooLiabilities
Chapteroo15:ooDebtooandooEquityooCapital
Chapteroo16:ooAuditingooOperationsooandooCompletingootheooAudit
Chapteroo17:ooAuditors’ooReports
Chapteroo18:ooIntegratedooAuditsooofooPublicooCompanies
Chapteroo19:ooAdditionalooAssuranceooServices:ooHistoricalooFinancialInformation
Chapteroo20:ooAdditionalooAssuranceooServices:ooOtherooInformation
Chapteroo21:ooInternal,ooOperational,ooandooComplianceooAuditing
,CHAPTER 1 oo
The Role of the Pu
oo oo oo oo
blic Accountant in the
oo oo oo
American Economy oo
ReviewooQuestions
1-1 Theoo―crisisooofoocredibility‖oolargelyooaroseoofromootheoonumberooofoocompaniesoothatoorestatedootheiro
opreviouslyooissuedoofinancialoostatementsoo asoo aoo resultoo ofoo accountingooirregularitiesoo andoofraud.oo
EspeciallyooresponsibleoowereootheooveryoovisibleooEnronooandooWorldComoofraudoocases.ooBothoocomp
aniesoo filedooforoobankruptcyooandooconstitutedootheoolargestoocompaniesooinooAmericanoohistoryootooo
doooso.oo Theooextentooofootheooaccountingooirregularitiesooandoofraudoobeingooinvestigatedooandoodisclo
sedoobroughtoointoooquestionootheooeffectivenessoo ofoofinancialoostatementooaudits.oo Inooaddition,ootheo
ocriminalooconvictionooofooArthurooAndersen,ooLLP,oooneooofootheoothenooBigoo5oo accountingoofirms,oo
onoochargesooofoodestroyingoodocumentsoorelatedootoootheooEnronoocaseoobroughtoointoooquestionootheo
oethicsoo standardsoo ofootheooprofession.
1-2 Assuranceooservicesooareooprofessionalooservicesoothatooenhanceootheooqualityooofooinformation,oooroo
itsoocontext,ooforoodecision-
making.ooTheootwoootypesooare:oo(a)oothoseoothatooincreaseootheooreliabilityooofooinformationooandoo(
b)oothoseoothatooinvolveooputtingooinformationooinooaooformoooroocontextoothatoofacilitatesoodecision
-making.
1-3 Aoofinancialoostatementooauditoois,oobyoofar,ootheoomostoocommonootypeooofooattestooengagement.oo The
oooverallooassertion,oomadeoobyoomanagement,oomostoofrequentlyooisoothatootheoofinancialoostatementsoofo
llowoogenerallyooacceptedooaccountingooprinciples.
1-4 Aoolargeoocorporationoowithoosecuritiesoolistedooonooaoostockooexchangeooisoorequiredoobyootheoorulesooo
footheoostockooexchangeooandoobyootheoorulesooofoo theooSecuritiesoo andooExchangeooCommissionootooop
rovideooanooauditoo reportoo withootheooannualoofinancialoostatementsoofurnishedootoooitsoostockholders.oo It
oo alsoooisoo requiredootoooengageootheooauditorsoo toooprovideooanooopinionooonooitsoointernaloocontrol.oo
Apartoofromoolegaloorequirements,oohowever,ooaoolargeoolistedoocorporationoorecognizesoothatooitoomus
toomaintainooinvestorooconfidenceooinootheooreliabilityooofooitsoofinancialoostatementsoo andoointernalooco
ntroloooveroo financialooreportingoo ifoo itoo isoo tooo continueootooobeooableootooosecureoocapitaloofromoothe
oopublic.oo Theooreportoo byooaoofirmooofoocertifiedoopublicooaccountantsoo addsoo credibilityootoootheoofina
ncialoostatementsoopreparedoobyootheoocorporation.o o Whenooaoosmalloofamily-
ownedooenterpriseooelectsoo tooohaveooanooaudit,ootheoopurposeoousuallyooisootooouseootheooauditors'oorep
, ortootooosupportooanooapplicationoo forooaoobankooloan.
