SOLUTION MANUAL FOR
zs zs
zs Principles Of Auditing And Other Assurance Services
zs zs zs zs zs zs zs
23rd Edition By Ray Whittington Kurt
zs zs zs zs zs zs
ALL Chapters (1 - 21)
zs zs zs zs
, Table of Contents zs zs
Chapter 1: The Role of the Public Accountant in the AmericanEconomy
zs zs zs zs zs zs zs zs zs zs
Chapter 2: Professional Standards
zs zs zs
Chapter 3: Professional Ethics
zs zs zs
Chapter 4: Legal Liability of CPAs
zs zs zs zs zs
Chapter 5: Audit Evidence and Documentation
zs zs zs zs zs
Chapter 6: Audit Planning, Understanding the Client, AssessingRisks, and Responding
zs zs zs zs zs zs zs zs zs
Chapter 7: Internal Control
zs zs zs
Chapter 8: Consideration of Internal Control in an InformationTechnology Environment
zs zs zs zs zs zs zs zs zs
Chapter 9: Audit Sampling
zs zs zs
Chapter 10: Cash and Financial Investments
zs zs zs zs zs
Chapter 11: Accounts Receivable, Notes Receivable, andRevenue
zs zs zs zs zs zs
Chapter 12: Inventories and Cost of Goods Sold
zs zs zs zs zs zs zs
Chapter 13: Property, Plant, and Equipment: Depreciation andDepletion
zs zs zs zs zs zs zs
Chapter 14: Accounts Payable and Other Liabilities
zs zs zs zs zs zs
Chapter 15: Debt and Equity Capital
zs zs zs zs zs
Chapter 16: Auditing Operations and Completing the Audit
zs zs zs zs zs zs zs
Chapter 17: Auditors’ Reports
zs zs zs
Chapter 18: Integrated Audits of Public Companies
zs zs zs zs zs zs
Chapter 19: Additional Assurance Services: Historical FinancialInformation
zs zs zs zs zs zs
Chapter 20: Additional Assurance Services: Other Information
zs zs zs zs zs zs
Chapter 21: Internal, Operational, and Compliance Auditing
zs zs zs zs zs zs
,CHAPTER 1 zs
The Role of the zs zs zs zs
Public Accountant in zs zs zs
the
American Economy zs
Review Questions
zs
1-1 The ―crisis of credibility‖ largely arose from the number of companies that restated their
zs zs zs zs zs zs zs zs zs zs zs zs zs zs
previously issued financial statements as a result of accounting irregularities and fraud.
zs zs zs zs zs zs zs zs zs zs zs zs
Especially responsible werethe very visible Enron and WorldCom fraud cases. Both companies
zs zs zs zs zs zs zs zs zs zs zs zs zs
filed for bankruptcy and constituted the largest companies in American history to do so. The
zs zs zs zs zs zs zs zs zs zs zs zs zs zs zs
extent of the accounting irregularities and fraud being investigated and disclosed brought into
zs zs zs zs zs zs zs zs zs zs zs zs zs
question the effectiveness of financial statement audits. In addition, the criminal conviction of
zs zs zs zs zs zs zs zs zs zs zs zs zs
Arthur Andersen, LLP, one of the then Big 5 accounting firms, on charges of destroying
zs zs zs zs zs zs zs zs zs zs zs zs zs zs zs
documents related to the Enron case brought into question the ethics standards of the
zs zs zs zs zs zs zs zs zs zs zs zs zs zs
profession.
1-2 Assurance services are professional services that enhance the quality of information, or its
zs zs zs zs zs zs zs zs zs zs zs zs zs
context, for decision-making. The two types are: (a) those that increase the reliability of
zs zs zs zs zs zs zs zs zs zs zs zs zs zs
information and (b) those that involve putting information in a form or context that facilitates
zs zs zs zs zs zs zs zs zs zs zs zs zs zs zs
decision-making.
1-3 A financial statement audit is, by far, the most common type of attest engagement. The
zs zs zs zs zs zs zs zs zs zs zs zs zs zs zs
overall assertion,made by management, most frequently is that the financial statements follow
zs zs zs zs zs zs zs zs zs zs zs zs zs
generally accepted accounting principles.
zs zs zs
1-4 A large corporation with securities listed on a stock exchange is required by the rules of the
zs zs zs zs zs zs zs zs zs zs zs zs zs zs zs zs zs
stock exchange and by the rules of the Securities and Exchange Commission to provide an
zs zs zs zs zs zs zs zs zs zs zs zs zs zs zs
audit report with theannual financial statements furnished to its stockholders. It also is
zs zs zs zs zs zs zs zs zs zs zs zs zs zs
required to engage the auditors to provide an opinion on its internal control. Apart from legal
zs zs zs zs zs zs zs zs zs zs zs zs zs zs zs zs
requirements, however, a large listed corporation recognizes that it must maintain investor
zs zs zs zs zs zs zs zs zs zs zs zs
confidence in the reliability of its financial statements and internal control over financial
zs zs zs zs zs zs zs zs zs zs zs zs zs
reporting if it is to continue to be able to secure capital from the public. The report by a
zs zs zs zs zs zs zs zs zs zs zs zs zs zs zs zs zs zs zs
firm of certified public accountants adds credibility to the financial statements prepared by the
zs zs zs zs zs zs zs zs zs zs zs zs zs zs
corporation. When a small family-owned enterprise elects to have an audit, the purpose
z s zs zs zs zs zs zs zs zs zs zs zs zs
, usually is to use the auditors' report to support an application for a bank loan.
zs zs zs zs zs zs zs zs zs zs zs zs zs zs
zs zs
zs Principles Of Auditing And Other Assurance Services
zs zs zs zs zs zs zs
23rd Edition By Ray Whittington Kurt
zs zs zs zs zs zs
ALL Chapters (1 - 21)
zs zs zs zs
, Table of Contents zs zs
Chapter 1: The Role of the Public Accountant in the AmericanEconomy
zs zs zs zs zs zs zs zs zs zs
Chapter 2: Professional Standards
zs zs zs
Chapter 3: Professional Ethics
zs zs zs
Chapter 4: Legal Liability of CPAs
zs zs zs zs zs
Chapter 5: Audit Evidence and Documentation
zs zs zs zs zs
Chapter 6: Audit Planning, Understanding the Client, AssessingRisks, and Responding
zs zs zs zs zs zs zs zs zs
Chapter 7: Internal Control
zs zs zs
Chapter 8: Consideration of Internal Control in an InformationTechnology Environment
zs zs zs zs zs zs zs zs zs
Chapter 9: Audit Sampling
zs zs zs
Chapter 10: Cash and Financial Investments
zs zs zs zs zs
Chapter 11: Accounts Receivable, Notes Receivable, andRevenue
zs zs zs zs zs zs
Chapter 12: Inventories and Cost of Goods Sold
zs zs zs zs zs zs zs
Chapter 13: Property, Plant, and Equipment: Depreciation andDepletion
zs zs zs zs zs zs zs
Chapter 14: Accounts Payable and Other Liabilities
zs zs zs zs zs zs
Chapter 15: Debt and Equity Capital
zs zs zs zs zs
Chapter 16: Auditing Operations and Completing the Audit
zs zs zs zs zs zs zs
Chapter 17: Auditors’ Reports
zs zs zs
Chapter 18: Integrated Audits of Public Companies
zs zs zs zs zs zs
Chapter 19: Additional Assurance Services: Historical FinancialInformation
zs zs zs zs zs zs
Chapter 20: Additional Assurance Services: Other Information
zs zs zs zs zs zs
Chapter 21: Internal, Operational, and Compliance Auditing
zs zs zs zs zs zs
,CHAPTER 1 zs
The Role of the zs zs zs zs
Public Accountant in zs zs zs
the
American Economy zs
Review Questions
zs
1-1 The ―crisis of credibility‖ largely arose from the number of companies that restated their
zs zs zs zs zs zs zs zs zs zs zs zs zs zs
previously issued financial statements as a result of accounting irregularities and fraud.
zs zs zs zs zs zs zs zs zs zs zs zs
Especially responsible werethe very visible Enron and WorldCom fraud cases. Both companies
zs zs zs zs zs zs zs zs zs zs zs zs zs
filed for bankruptcy and constituted the largest companies in American history to do so. The
zs zs zs zs zs zs zs zs zs zs zs zs zs zs zs
extent of the accounting irregularities and fraud being investigated and disclosed brought into
zs zs zs zs zs zs zs zs zs zs zs zs zs
question the effectiveness of financial statement audits. In addition, the criminal conviction of
zs zs zs zs zs zs zs zs zs zs zs zs zs
Arthur Andersen, LLP, one of the then Big 5 accounting firms, on charges of destroying
zs zs zs zs zs zs zs zs zs zs zs zs zs zs zs
documents related to the Enron case brought into question the ethics standards of the
zs zs zs zs zs zs zs zs zs zs zs zs zs zs
profession.
1-2 Assurance services are professional services that enhance the quality of information, or its
zs zs zs zs zs zs zs zs zs zs zs zs zs
context, for decision-making. The two types are: (a) those that increase the reliability of
zs zs zs zs zs zs zs zs zs zs zs zs zs zs
information and (b) those that involve putting information in a form or context that facilitates
zs zs zs zs zs zs zs zs zs zs zs zs zs zs zs
decision-making.
1-3 A financial statement audit is, by far, the most common type of attest engagement. The
zs zs zs zs zs zs zs zs zs zs zs zs zs zs zs
overall assertion,made by management, most frequently is that the financial statements follow
zs zs zs zs zs zs zs zs zs zs zs zs zs
generally accepted accounting principles.
zs zs zs
1-4 A large corporation with securities listed on a stock exchange is required by the rules of the
zs zs zs zs zs zs zs zs zs zs zs zs zs zs zs zs zs
stock exchange and by the rules of the Securities and Exchange Commission to provide an
zs zs zs zs zs zs zs zs zs zs zs zs zs zs zs
audit report with theannual financial statements furnished to its stockholders. It also is
zs zs zs zs zs zs zs zs zs zs zs zs zs zs
required to engage the auditors to provide an opinion on its internal control. Apart from legal
zs zs zs zs zs zs zs zs zs zs zs zs zs zs zs zs
requirements, however, a large listed corporation recognizes that it must maintain investor
zs zs zs zs zs zs zs zs zs zs zs zs
confidence in the reliability of its financial statements and internal control over financial
zs zs zs zs zs zs zs zs zs zs zs zs zs
reporting if it is to continue to be able to secure capital from the public. The report by a
zs zs zs zs zs zs zs zs zs zs zs zs zs zs zs zs zs zs zs
firm of certified public accountants adds credibility to the financial statements prepared by the
zs zs zs zs zs zs zs zs zs zs zs zs zs zs
corporation. When a small family-owned enterprise elects to have an audit, the purpose
z s zs zs zs zs zs zs zs zs zs zs zs zs
, usually is to use the auditors' report to support an application for a bank loan.
zs zs zs zs zs zs zs zs zs zs zs zs zs zs
