TEST BANK - Principles of Auditing and Other Assurance
Services 22nd Edition by Ray Whittington, Kurt Pany
,Table of Conten
W W
t
ChapterW1 The Role of the
W W W W WPublicWAccountantWinWtheWAmericanWEconom
yW ChapterW2WProfessionalWStandards
ChapterW3WProfessionalWEthicsW Chap
terW4WLegalWLiabilityWofWCPAs
ChapterW5WAuditWEvidenceWandWDocumentation
ChapterW6WAuditWPlanning,WUnderstandingWtheWClient,WAssessingWRisks,Wa
ndW Responding
ChapterW7WInternalWControl
ChapterW8WConsiderationWofWInternalWControlWinWanWInformationWTechnol
ogyW Environment
ChapterW9WAuditWSampling
ChapterW10WCashWandWFinancialWInvestments
ChapterW11WAccountsWReceivable,WNotesWReceivable,WandWRevenueW
ChapterW12WInventoriesWandWCostWofWGoodsWSold
ChapterW13WProperty,WPlant,WandWEquipment:WDepreciationWandWDepletio
nW ChapterW14WAccountsWPayableWandWOtherWLiabilities
ChapterW15WDebtWandWEquityWCapital
ChapterW16WAuditingWOperationsWandWCompletingWtheWAudit
ChapterW17WAuditors’WReports
ChapterW18WIntegratedWAuditsWofWPublicWCompanies
ChapterW19WAdditionalWAssuranceWServices:WHistoricalWFinancialW Inform
ation
ChapterW20WAdditionalWAssuranceWServices:WOtherWInformationW Cha
pterW21WInternal,WOperational,WandWComplianceWAuditing
, Full Test Bank for Principles of Auditing and Other Assuran
W W W W W W W W W
ce
Services 22ndEdition by Ray Whittington, Kurt Pany
W W W W W W
AnswersWareWatWtheWendWofWeachWchapterW Cha
pterW1
StudentWname:W
1) AccountantsWareWregulatedWbyWaWvarietyWofWorganizations.WMatchWtheWstate
mentsW withtheWmostWdirectlyWrelatedWorganization:
● AccountingWandWReviewWServicesWCommittee.
● AmericanWInstituteWofWCertifiedWPublicWAccountants.
● AuditingWStandardsWBoard.
● FederalWAccountingWStandardsWAdvisoryWBoard.
● FinancialWAccountingWStandardsWBoard.
● GeneralWAccountingWOffice.
● GovernmentWAccountingWStandardsWBoard.
● PublicWCompanyWAccountingWOversightWBoard.
● SecuritiesWandWExchangeWCommission.
● StateWBoardsWofWAccountancy.
OrganizationsWmayWbeWusedWonce,WmoreWthanWonce,WorWnotWatWall.
Statements Organizations
A. DevelopsWaccountingWstandardsfo
rW publicWandWnonpublicWcompanies.
B. DevelopsWaccountingWstandardsforWthe
U.S.WGovernment.
C. ImprovesWstandardsWofWfinancialW acc
ountingWforWstateWandWlocalWgovernment
W entities.
D. IssuesWauditingWstandardsWforpubl
icW companies.
E. IssuesWCPAWcertificates.
F. PreparesWtheWCPAWexam.
Organizations:WAmericanWInstituteWofWCertifiedWPublicWAccountants,WFederalWAccounti
ngW StandardsWAdvisoryWBoard,WFinancialWAccountingWStandardsWBoard,WGovernmentW
AccountingWStandardsWBoard,WPublicWCompanyWAccountingWOversightWBoard,WStateWBo
ardsW ofWAccountancy.
, 2) TheWSarbanes-
OxleyWActWofW2002WmadeWsignificantWreformsWforWpublicWcompaniesW andtheirWaudit
ors.
a. DescribeWtheWeventsWthatWledWupWtoWtheWpassageWofWtheWAct.
b. DescribeWtheWmajorWchangesWmadeWbyWtheWAct.
3) ManyWpeopleWconfuseWtheWresponsibilitiesWofWtheWindependentWaudi
torsW andWtheclient'sWmanagementWwithWrespectWtoWauditedWfinancialWstate
ments.
a. DescribeWmanagement'sWresponsibilityWregardingWauditedWfinancialWstatements.
b. DescribeWtheWindependentWauditors'WresponsibilityWregardingWauditedWfinancialWstateme
nts.
c. EvaluateWtheWfollowingWstatement:W"IfWtheWauditorsWdisagreeWwithWmanage
mentW regardingWanWaccountingWprincipleWusedWinWtheWfinancialWstatements,WtheWau
ditorsWshouldW expresstheirWviewsWinWtheWnotesWtoWtheWfinancialWstatements."
4) AnWinvestorWisWconsideringWinvestingWinWoneWofWtwoWcompanies.WTheWcompanie
sWhaveW verysimilarWreportedWfinancialWpositionWandWresultsWofWoperations.WHowever,W
onlyWoneWofW theWcompaniesWhasWitsWfinancialWstatementsWaudited.
a. DescribeW whatW createsW theW demandW forW anW auditW inWthisW situation.W Incl
udeW aW discussionWofW howW auditedW financialW statementsW facilitateW thisW investment
W transaction,W andWtheWeffectWofWtheauditWonWbusinessWriskWandWinformationWrisk.
b. IdentifyW theW potentialW consequencesW toW theW companyW ofW notW havin
gW itsW financialstatementsWaudited.
5) AWsummaryWofWfindingsWratherWthanWassuranceWisWmostWlikelyWtoWbeWincludedWinWa(n
):
A) Agreed-uponWproceduresWreport.
B) CompilationWreport.
C) AuditWreport.
D) ReviewWreport.
Services 22nd Edition by Ray Whittington, Kurt Pany
,Table of Conten
W W
t
ChapterW1 The Role of the
W W W W WPublicWAccountantWinWtheWAmericanWEconom
yW ChapterW2WProfessionalWStandards
ChapterW3WProfessionalWEthicsW Chap
terW4WLegalWLiabilityWofWCPAs
ChapterW5WAuditWEvidenceWandWDocumentation
ChapterW6WAuditWPlanning,WUnderstandingWtheWClient,WAssessingWRisks,Wa
ndW Responding
ChapterW7WInternalWControl
ChapterW8WConsiderationWofWInternalWControlWinWanWInformationWTechnol
ogyW Environment
ChapterW9WAuditWSampling
ChapterW10WCashWandWFinancialWInvestments
ChapterW11WAccountsWReceivable,WNotesWReceivable,WandWRevenueW
ChapterW12WInventoriesWandWCostWofWGoodsWSold
ChapterW13WProperty,WPlant,WandWEquipment:WDepreciationWandWDepletio
nW ChapterW14WAccountsWPayableWandWOtherWLiabilities
ChapterW15WDebtWandWEquityWCapital
ChapterW16WAuditingWOperationsWandWCompletingWtheWAudit
ChapterW17WAuditors’WReports
ChapterW18WIntegratedWAuditsWofWPublicWCompanies
ChapterW19WAdditionalWAssuranceWServices:WHistoricalWFinancialW Inform
ation
ChapterW20WAdditionalWAssuranceWServices:WOtherWInformationW Cha
pterW21WInternal,WOperational,WandWComplianceWAuditing
, Full Test Bank for Principles of Auditing and Other Assuran
W W W W W W W W W
ce
Services 22ndEdition by Ray Whittington, Kurt Pany
W W W W W W
AnswersWareWatWtheWendWofWeachWchapterW Cha
pterW1
StudentWname:W
1) AccountantsWareWregulatedWbyWaWvarietyWofWorganizations.WMatchWtheWstate
mentsW withtheWmostWdirectlyWrelatedWorganization:
● AccountingWandWReviewWServicesWCommittee.
● AmericanWInstituteWofWCertifiedWPublicWAccountants.
● AuditingWStandardsWBoard.
● FederalWAccountingWStandardsWAdvisoryWBoard.
● FinancialWAccountingWStandardsWBoard.
● GeneralWAccountingWOffice.
● GovernmentWAccountingWStandardsWBoard.
● PublicWCompanyWAccountingWOversightWBoard.
● SecuritiesWandWExchangeWCommission.
● StateWBoardsWofWAccountancy.
OrganizationsWmayWbeWusedWonce,WmoreWthanWonce,WorWnotWatWall.
Statements Organizations
A. DevelopsWaccountingWstandardsfo
rW publicWandWnonpublicWcompanies.
B. DevelopsWaccountingWstandardsforWthe
U.S.WGovernment.
C. ImprovesWstandardsWofWfinancialW acc
ountingWforWstateWandWlocalWgovernment
W entities.
D. IssuesWauditingWstandardsWforpubl
icW companies.
E. IssuesWCPAWcertificates.
F. PreparesWtheWCPAWexam.
Organizations:WAmericanWInstituteWofWCertifiedWPublicWAccountants,WFederalWAccounti
ngW StandardsWAdvisoryWBoard,WFinancialWAccountingWStandardsWBoard,WGovernmentW
AccountingWStandardsWBoard,WPublicWCompanyWAccountingWOversightWBoard,WStateWBo
ardsW ofWAccountancy.
, 2) TheWSarbanes-
OxleyWActWofW2002WmadeWsignificantWreformsWforWpublicWcompaniesW andtheirWaudit
ors.
a. DescribeWtheWeventsWthatWledWupWtoWtheWpassageWofWtheWAct.
b. DescribeWtheWmajorWchangesWmadeWbyWtheWAct.
3) ManyWpeopleWconfuseWtheWresponsibilitiesWofWtheWindependentWaudi
torsW andWtheclient'sWmanagementWwithWrespectWtoWauditedWfinancialWstate
ments.
a. DescribeWmanagement'sWresponsibilityWregardingWauditedWfinancialWstatements.
b. DescribeWtheWindependentWauditors'WresponsibilityWregardingWauditedWfinancialWstateme
nts.
c. EvaluateWtheWfollowingWstatement:W"IfWtheWauditorsWdisagreeWwithWmanage
mentW regardingWanWaccountingWprincipleWusedWinWtheWfinancialWstatements,WtheWau
ditorsWshouldW expresstheirWviewsWinWtheWnotesWtoWtheWfinancialWstatements."
4) AnWinvestorWisWconsideringWinvestingWinWoneWofWtwoWcompanies.WTheWcompanie
sWhaveW verysimilarWreportedWfinancialWpositionWandWresultsWofWoperations.WHowever,W
onlyWoneWofW theWcompaniesWhasWitsWfinancialWstatementsWaudited.
a. DescribeW whatW createsW theW demandW forW anW auditW inWthisW situation.W Incl
udeW aW discussionWofW howW auditedW financialW statementsW facilitateW thisW investment
W transaction,W andWtheWeffectWofWtheauditWonWbusinessWriskWandWinformationWrisk.
b. IdentifyW theW potentialW consequencesW toW theW companyW ofW notW havin
gW itsW financialstatementsWaudited.
5) AWsummaryWofWfindingsWratherWthanWassuranceWisWmostWlikelyWtoWbeWincludedWinWa(n
):
A) Agreed-uponWproceduresWreport.
B) CompilationWreport.
C) AuditWreport.
D) ReviewWreport.
