SOLUTION MANUAL for Principles Of Auditing and Other Assurance Services 23rd Edition by Ray Whittington Kurt All Chapters 1-21

SOLUTION MANUAL
Principles Of Auditing and Other Assurance Services

23rd Edition by Ray Whittington Kurt
All Chapters 1-21

, • Table of Contents
U U




ChapterU1:UTheURoleUofUtheUPublicUAccountantUinUtheUAmericanEconomy

ChapterU2:UProfessionalUStandards

ChapterU3:UProfessionalUEthics

ChapterU4:ULegalULiabilityUofUCPAs

ChapterU5:UAuditUEvidenceUandUDocumentation

ChapterU6:UAuditUPlanning,UUnderstandingUtheUClient,UAssessingRisks,UandUResponding

ChapterU7:UInternalUControl

ChapterU8:UConsiderationUofUInternalUControlUinUanUInformationTechnologyUEnvironment

ChapterU9:UAuditUSampling

ChapterU10:UCashUandUFinancialUInvestments

ChapterU11:UAccountsUReceivable,UNotesUReceivable,UandRevenue

ChapterU12:UInventoriesUandUCostUofUGoodsUSold

ChapterU13:UProperty,UPlant,UandUEquipment:UDepreciationUandDepletion

ChapterU14:UAccountsUPayableUandUOtherULiabilities

ChapterU15:UDebtUandUEquityUCapital

ChapterU16:UAuditingUOperationsUandUCompletingUtheUAudit

ChapterU17:UAuditors’UReports

ChapterU18:UIntegratedUAuditsUofUPublicUCompanies

ChapterU19:UAdditionalUAssuranceUServices:UHistoricalUFinancialInformation

ChapterU20:UAdditionalUAssuranceUServices:UOtherUInformation

ChapterU21:UInternal,UOperational,UandUComplianceUAuditing

,CHAPTER 1 U




The Role of the Publ
U U U U



ic Accountant in the
U U U



American Economy U




ReviewUQuestions

1-1 TheU―crisisUofUcredibility‖UlargelyUaroseUfromUtheUnumberUofUcompaniesUthatUrestatedUtheirUpreviouslyU
issuedUfinancialUstatementsU asU aU resultUofU accountingUirregularitiesU andUfraud.U EspeciallyUresponsible
UwereUtheUveryUvisibleUEnronU andUWorldComUfraudU cases.UBothUcompaniesU filedU forU bankruptcyUandU c

onstitutedUtheUlargestU companiesUinUAmericanUhistoryUtoUdoUso.U TheUextentU ofUtheUaccountingUirregula
ritiesU andUfraudUbeingUinvestigatedUandUdisclosedUbroughtUintoUquestionUtheUeffectivenessU ofU financial
UstatementU audits.U InUaddition,UtheUcriminalUconvictionUofUArthurU Andersen,ULLP,UoneUofUtheUthenUBigU

5UaccountingUfirms,UonUchargesU ofUdestroyingUdocumentsU relatedUtoUtheUEnronUcaseUbroughtUintoUque
stionUtheUethicsU standardsUofUtheUprofession.

1-2 AssuranceUservicesUareUprofessionalUservicesUthatUenhanceUtheUqualityUofUinformation,UorUitsUcontex
t,UforUdecision-
making.UTheUtwoUtypesUare:U(a)UthoseUthatUincreaseUtheUreliabilityUofUinformationUandU(b)UthoseUthat
UinvolveUputtingUinformationUinUaUformUorUcontextUthatUfacilitatesUdecision-making.



1-3 AUfinancialUstatementUauditU is,UbyUfar,UtheUmostU commonUtypeUofU attestU engagement.U TheUoverallUass
ertion,UmadeUbyUmanagement,UmostUfrequentlyUisUthatUtheUfinancialUstatementsUfollowUgenerallyUaccep
tedUaccountingUprinciples.

1-4 AUlargeUcorporationUwithUsecuritiesUlistedUonUaUstockUexchangeUisUrequiredUbyUtheUrulesUofUtheUstockUe
xchangeUandUbyUtheUrulesU ofUtheUSecuritiesU andUExchangeUCommissionUtoUprovideUanUauditU reportU wit
hUtheUannualUfinancialUstatementsU furnishedUtoUitsU stockholders.U ItU alsoUisU requiredUtoUengageUtheUaudi
torsUtoUprovideUanUopinionUonUitsUinternalUcontrol.UApartUfromUlegalUrequirements,Uhowever,UaUlargeUl
istedUcorporationUrecognizesUthatUitUmustUmaintainUinvestorUconfidenceUinUtheUreliabilityUofUitsUfinancial
UstatementsU andU internalU controlU overU financialU reportingU ifU itU isU toU continueUtoU beU ableUtoU secureU ca

pitalUfromUtheUpublic.U TheUreportU byUaUfirmUofUcertifiedUpublicUaccountantsU addsU credibilityUtoUtheUfina
ncialUstatementsUpreparedUbyUtheUcorporation.U WhenUaU smallUfamily-
ownedUenterpriseUelectsU toUhaveUanUaudit,UtheUpurposeUusuallyUisUtoUuseUtheUauditors'UreportUtoUsupp

, ortUanUapplicationU forUaUbankUloan.