TEST BANK for Auditing A Practical Approach, 4th Canadian Edition Moroney, Campbell, Warren. All Chapters 1-14

TESTBANK FOR AUDITING A PRACTICAL APPROACH,
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4TH CANADIAN EDITION 4TH EDITION, KINDLE EDITION
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BY ROBYN MORONEY , FIONA CAMPBELL , JANE HAMI
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LTON , VALERIE WARREN
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, TEST BANK for Auditing A Practical Approach, 4th Canadian Edition Moroney, Campbell, Warr
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CHAPTER 1 u 1




INTRODUCTION AND OVERVIEW OF AUDIT AND ASSURANC u1 u1 u1 u1 u1 u1




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CHAPTER LEARNING OBJECTIVES u1 u1




1. Define an assurance engagement. u1 u1 u1



An assurance engagement involves an assurance provider arriving atan opinion about so
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me information being provided by their client toa third party. A financial statement audit
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is one type of assuranceengagement. This engagement involves an auditor arriving at a
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n opinionabout the fair presentation of the financial statements. The auditreport is addre
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ssed to the shareholders of the company being audited,but other users may read the fin
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ancial statements. Learning aboutauditing and assurance requires an understanding of a
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uditing andassurance terminology, including terms such as audit risk, materiality,internal
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controls, listed entity, and assertions.u1 u1 u1 u1




2. Explain why there is a demand for audit and assurance services.
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Financial statement users include investors (shareholders), suppliers,customers, lenders,
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1 employees, governments, and the general public.These groups of users demand audite
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d financial statements because oftheir remoteness from the entity, accounting complexity
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, theirincentivescompeting with those of the entity‘s managers, and their needfor reliable
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1 information on which to base decisions. The theories usedto describe the demand for au
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dit and assurance services are agencytheory, the information hypothesis, and the insura
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nce hypothesis. u1




3. Differentiate between types of assurance services. u1 u1 u1 u1 u1



Assurance services include financial statement audits, complianceaudits, performance aud
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its, comprehensive audits, internal audits,and assurance on corporate social responsibilit
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y (CSR) disclosures.
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4. Explain the different levels of assurance. u1 u1 u1 u1 u1



The different levels of assurance include reasonable assurance, whichis the highest level
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of assurance, limited assurance, and no assurance.Reasonable assurance is provided o
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n an audit of a company‘sfinancial statements. Limited assurance is provided in a revie
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5. Outline different audit opinionsu1 u1 u1



An auditor can issue an unmodified opinion, also known as a cleanreport, or an unmodifi
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ed opinion with an emphasis of matter paragraph.Alternatively, a modified opinion may
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be issued as a qualified, anadverse, or a disclaimer of opinion.
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6. Differentiate between the roles of the preparer and the auditor, and discuss t
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he different firms that provide assurance services.
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It is the responsibility of a company‘s governing body to ensure thatits financial stateme
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nts are relevant, reliable, comparable, understandable,and true and fair. It is the responsi
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bility of the auditor to form anopinion on the fair presentation of the financial statements.
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1 In doing,so 1- 2 Auditing: A Practical Approach, Fourth Canadian Edition
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the auditor must maintain professional scepticism and utilize professionaljudgement and d
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ue care. u1




The firms that provide assurance services include the Big-
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4international firms, the national firms (with international links),local and regional firms, a
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nd consulting firms that tend to specializein assurance of CSR and environmental disclo
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sures.




7. Identify the different regulators, legislation, and regulations surrounding th
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e assurance process.
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lO M u1 u1 u1 u1 u1 u1 u1 u1 u1
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Introduction and Overview of Audit and Assurance u1 u1 u1 u1 u1 u1 1 - 3
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