, TEST BANK for Auditing A Practical Approach, 4th Canadian Edition Moroney, Campbell, Warren
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https://browsegrades.net/singlePaper/416762/testbank-for-auditing-a-practical-approach-4th-c The Marketplace to Buy and Sell your Study Material
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CHAPTER 1 a g
INTRODUCTION AND OVERVIEW OF AUDIT AND ASSURANCE ag ag ag ag ag ag
CHAPTER LEARNING OBJECTIVES ag ag
1. Define an assurance engagement. ag ag ag
An assurance engagement involves an assurance provider arriving atan opinion about some
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ag information being provided by their client toa third party. A financial statement audit is one
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type of assuranceengagement. This engagement involves an auditor arriving at an opinion
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about the fair presentation of the financial statements. The auditreport is addressed to the
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shareholders of the company being audited,but other users may read the financial stateme
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nts. Learning aboutauditing and assurance requires an understanding of auditing andassur
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ance terminology, including terms such as audit risk, materiality,internal controls, listed enti
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ty, and assertions.
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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, e
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mployees, governments, and the general public.These groups of users demand audited fin
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ancial statements because oftheir remoteness from the entity, accounting complexity, theiri
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ncentivescompeting with those of the entity‘s managers, and their needfor reliable informati ag ag ag ag ag ag ag ag ag ag ag
on on which to base decisions. The theories usedto describe the demand for audit and assu
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rance services are agencytheory, the information hypothesis, and the insurance hypothesis
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.
3. Differentiate between types of assurance services. ag ag ag ag ag
Assurance services include financial statement audits, complianceaudits, performance audit
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s, comprehensive audits, internal audits,and assurance on corporate social responsibility (
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CSR) disclosures. ag
4. Explain the different levels of assurance. ag ag ag ag ag
The different levels of assurance include reasonable assurance, whichis the highest level of
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assurance, limited assurance, and no assurance.Reasonable assurance is provided on an
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audit of a company‘sfinancial statements. Limited assurance is provided in a review of
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acompany‘s financial Dsotwante
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2
, TEST BANK for Auditing A Practical Approach, 4th Canadian Edition Moroney, Campbell, Warren
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Stuvia.com - ag
https://browsegrades.net/singlePaper/416762/testbank-for-auditing-a-practical-approach-4th-c The Marketplace to Buy and Sell your Study Material
ag ag ag ag ag ag ag ag ag
5. Outline different audit opinions ag ag ag
An auditor can issue an unmodified opinion, also known as a cleanreport, or an unmodified
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opinion with an emphasis of matter paragraph.Alternatively, a modified opinion may be iss
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ued 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 the
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g different firms that provide assurance services.
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It is the responsibility of a company‘s governing body to ensure thatits financial statements
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g are relevant, reliable, comparable, understandable,and true and fair. It is the responsibility of
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ag the auditor to form anopinion on the fair presentation of the financial statements. In doing,s
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o 1- 2 Auditing: A Practical Approach, Fourth Canadian Edition
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the auditor must maintain professional scepticism and utilize professionaljudgement and due
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g care.
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, and
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consulting firms that tend to specializein assurance of CSR and environmental disclosures.
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7. Identify the different regulators, legislation, and regulations surrounding the
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g assurance process. ag
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oA R c P S D | 3 08 7 8 49 5
Introduction and Overview of Audit and Assurance ag ag ag ag ag ag 1-3 ag ag
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, TEST BANK for Auditing A Practical Approach, 4th Canadian Edition Moroney, Campbell, Warren
ag ag ag ag ag ag ag ag ag ag ag ag
Stuvia.com - ag
https://browsegrades.net/singlePaper/416762/testbank-for-auditing-a-practical-approach-4th-c The Marketplace to Buy and Sell your Study Material
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TRUE-FALSE STATEMENTS ag
1. Only current investors (not potential investors) are considered to be users of the financial
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ag statements.
Answer: False ag
Bloomcode: Knowledge Diffic ag ag
ulty: Easy ag
Learning Objective: Explain why there is a demand for audit and assurance services. Secti
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on Reference: 1.2 Demand for audit and assurance services
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CPA Competency: Audit and Assurance AACS
ag ag ag ag ag
B: Analytic
ag
2. Insurance hypothesis is a means whereby the investor can guarantee the success of their
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ag investment.
Answer: False ag
Bloomcode: Comprehension ag ag
Difficulty: Medium ag
Learning Objective: Explain why there is a demand for audit and assurance services. Secti
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on Reference: 1.2 Demand for audit and assurance services
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CPA Competency: Audit and Assurance AACS
ag ag ag ag ag
B: Analytic
ag
3. A compliance audit involves gathering evidence to ascertain whether the person or entity
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ag under review has followed the rules, policies, procedures, laws and regulations with whic
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h they must conform
ag ag ag
Answer: True ag
Bloomcode: Comprehension ag ag
Difficulty: Medium ag
Learning Objective: Differentiate between types of assurance services. Secti
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on Reference: 1.3 Different assurance services
ag ag ag ag ag
CPA Competency: Audit and Assurance AACS
ag ag ag ag ag
B: Analytic
ag
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6
Distribution of this document is illegal
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extra pe r ye a r
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3
ag ag ag ag ag ag ag ag ag ag ag ag
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https://browsegrades.net/singlePaper/416762/testbank-for-auditing-a-practical-approach-4th-c The Marketplace to Buy and Sell your Study Material
ag ag ag ag ag ag ag ag ag
CHAPTER 1 a g
INTRODUCTION AND OVERVIEW OF AUDIT AND ASSURANCE ag ag ag ag ag ag
CHAPTER LEARNING OBJECTIVES ag ag
1. Define an assurance engagement. ag ag ag
An assurance engagement involves an assurance provider arriving atan opinion about some
ag ag ag ag ag ag ag ag ag ag ag
ag information being provided by their client toa third party. A financial statement audit is one
ag ag ag ag ag ag ag ag ag ag ag ag ag ag ag
type of assuranceengagement. This engagement involves an auditor arriving at an opinion
ag ag ag ag ag ag ag ag ag ag ag
about the fair presentation of the financial statements. The auditreport is addressed to the
ag ag ag ag ag ag ag ag ag ag ag ag ag ag
shareholders of the company being audited,but other users may read the financial stateme
ag ag ag ag ag ag ag ag ag ag ag ag
nts. Learning aboutauditing and assurance requires an understanding of auditing andassur
ag ag ag ag ag ag ag ag ag ag
ance terminology, including terms such as audit risk, materiality,internal controls, listed enti
ag ag ag ag ag ag ag ag ag ag ag
ty, and assertions.
ag ag
2. Explain why there is a demand for audit and assurance services.
ag ag ag ag ag ag ag ag ag ag
Financial statement users include investors (shareholders), suppliers,customers, lenders, e
ag ag ag ag ag ag ag ag
mployees, governments, and the general public.These groups of users demand audited fin
ag ag ag ag ag ag ag ag ag ag ag
ancial statements because oftheir remoteness from the entity, accounting complexity, theiri
ag ag ag ag ag ag ag ag ag ag
ncentivescompeting with those of the entity‘s managers, and their needfor reliable informati ag ag ag ag ag ag ag ag ag ag ag
on on which to base decisions. The theories usedto describe the demand for audit and assu
ag ag ag ag ag ag ag ag ag ag ag ag ag ag ag
rance services are agencytheory, the information hypothesis, and the insurance hypothesis
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.
3. Differentiate between types of assurance services. ag ag ag ag ag
Assurance services include financial statement audits, complianceaudits, performance audit
ag ag ag ag ag ag ag ag
s, comprehensive audits, internal audits,and assurance on corporate social responsibility (
ag ag ag ag ag ag ag ag ag ag
CSR) disclosures. ag
4. Explain the different levels of assurance. ag ag ag ag ag
The different levels of assurance include reasonable assurance, whichis the highest level of
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assurance, limited assurance, and no assurance.Reasonable assurance is provided on an
ag ag ag ag ag ag ag ag ag ag ag
audit of a company‘sfinancial statements. Limited assurance is provided in a review of
ag ag ag ag ag ag ag ag ag ag ag ag
acompany‘s financial Dsotwante
l om ednbtsy:.BNRo
ade a g aTsEsRuSrTaUnDcIeESis| jp
I GH amroohvriadbehd in70a@cgm
asa omail.p
coilm
ationengagem
Weannttt.o a g a g earn $1.236
a g
Distribution of this document is illega extra pePr ayegaer
A+ l
ag ag ag ag ag ag ag
2
, TEST BANK for Auditing A Practical Approach, 4th Canadian Edition Moroney, Campbell, Warren
ag ag ag ag ag ag ag ag ag ag ag ag
Stuvia.com - ag
https://browsegrades.net/singlePaper/416762/testbank-for-auditing-a-practical-approach-4th-c The Marketplace to Buy and Sell your Study Material
ag ag ag ag ag ag ag ag ag
5. Outline different audit opinions ag ag ag
An auditor can issue an unmodified opinion, also known as a cleanreport, or an unmodified
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opinion with an emphasis of matter paragraph.Alternatively, a modified opinion may be iss
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ued 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 the
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g different firms that provide assurance services.
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It is the responsibility of a company‘s governing body to ensure thatits financial statements
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g are relevant, reliable, comparable, understandable,and true and fair. It is the responsibility of
ag ag ag ag ag ag ag ag ag ag ag ag
ag the auditor to form anopinion on the fair presentation of the financial statements. In doing,s
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o 1- 2 Auditing: A Practical Approach, Fourth Canadian Edition
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the auditor must maintain professional scepticism and utilize professionaljudgement and due
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g care.
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, and
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consulting firms that tend to specializein assurance of CSR and environmental disclosures.
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7. Identify the different regulators, legislation, and regulations surrounding the
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g assurance process. ag
lOM ag ag ag ag ag agag ag ag
oA R c P S D | 3 08 7 8 49 5
Introduction and Overview of Audit and Assurance ag ag ag ag ag ag 1-3 ag ag
Downloaded by: BRIGHTERSTUDIES |
ag ag ag ag Want to earn $1.23
ag ag ag
6
Distribution of this document is illegal
A+ ag ag ag ag ag
extra pe r ye a r
ag ag
3
, TEST BANK for Auditing A Practical Approach, 4th Canadian Edition Moroney, Campbell, Warren
ag ag ag ag ag ag ag ag ag ag ag ag
Stuvia.com - ag
https://browsegrades.net/singlePaper/416762/testbank-for-auditing-a-practical-approach-4th-c The Marketplace to Buy and Sell your Study Material
ag ag ag ag ag ag ag ag ag
TRUE-FALSE STATEMENTS ag
1. Only current investors (not potential investors) are considered to be users of the financial
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ag statements.
Answer: False ag
Bloomcode: Knowledge Diffic ag ag
ulty: Easy ag
Learning Objective: Explain why there is a demand for audit and assurance services. Secti
ag ag ag ag ag ag ag ag ag ag ag ag ag
on Reference: 1.2 Demand for audit and assurance services
ag ag ag ag ag ag ag ag
CPA Competency: Audit and Assurance AACS
ag ag ag ag ag
B: Analytic
ag
2. Insurance hypothesis is a means whereby the investor can guarantee the success of their
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ag investment.
Answer: False ag
Bloomcode: Comprehension ag ag
Difficulty: Medium ag
Learning Objective: Explain why there is a demand for audit and assurance services. Secti
ag ag ag ag ag ag ag ag ag ag ag ag ag
on Reference: 1.2 Demand for audit and assurance services
ag ag ag ag ag ag ag ag
CPA Competency: Audit and Assurance AACS
ag ag ag ag ag
B: Analytic
ag
3. A compliance audit involves gathering evidence to ascertain whether the person or entity
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ag under review has followed the rules, policies, procedures, laws and regulations with whic
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h they must conform
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Answer: True ag
Bloomcode: Comprehension ag ag
Difficulty: Medium ag
Learning Objective: Differentiate between types of assurance services. Secti
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on Reference: 1.3 Different assurance services
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CPA Competency: Audit and Assurance AACS
ag ag ag ag ag
B: Analytic
ag
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3
