SOLUTION MANUAL FOR Auditing: A Practical Approach with Data Analytics 2nd Edition by Raymond N. Johnson, Laura D. Wiley, Robyn Moroney ISBN: 978-1119785996 COMPLETE GUIDE 100% VERIFIED A+ GRADE ASSURED!!!!!NEW LATEST UPDATE!!!!!

SOLUTION MANUAL FOR x# x#



Auditing A Practical Approach with Data Analytics, 2nd Edition Raymond N. Johnson,
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Laura Davis Wiley, Robyn Moroney, Fiona Campbell, Jane Hamilton
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Chapter 1-16 x#



CHAPTER 1 x#



Introduction and Overview of Audit and Assurance x# x# x# x# x# x#



Learning Objectives x#




1. Differentiate among assurance, attestation, and auditing services.
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2. Describe the different types of assurance services.
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3. Explain the demand for audit and assurance services.
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4. Discuss the different roles of the financial statement preparer and the auditor.
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5. Identify the roles of different regulators and organizations that affect the audit profession.
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6. Explain the concepts of reasonable assurance, materiality, and the nature of an unqu
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ali- fied/unmodified report on the audit of financial statements.
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7. Explain the concept of reasonable assurance and the nature of an unqualified report
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#on internal controls over financial reporting.
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8. Discuss the audit expectation gap.
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ANSWERS TO MULTIPLE-CHOICE QUESTIONS x# x# x#




1. C
LOx#1,x#BT:x#C,x#Difficulty:x#Easy,x#TOT:x#2x#min.,x#AACSB:x#None,x#AICPAx#AC:x#Riskx#Assessment,x#Analysisx#andx#Managem
ent,x#Section:x#Assurance,x#Attestation,x#andx#Auditx#Services


2. A
LOx#2,x#BT:x#C,x#Difficulty:x#Easy,x#TOT:x#2x#min.,x#AACSB:x#None,x#AICPAx#AC:x#Riskx#Assessment,x#Analysisx#andx#Managem
ent,x#Section:x#Differentx#Assurancex#Services


3. B
LOx#2,x#BT:x#C,x#Difficulty:x#Easy,x#TOT:x#2x#min.,x#AACSB:x#None,x#AICPAx#AC:x#Riskx#Assessment,x#Analysisx#andx#Managem
ent,x#Section:x#Differentx#Assurancex#Services


4. C
LOx#2,x#BT:x#C,x#Difficulty:x#Medium,x#TOT:x#2x#min.,x#AACSB:x#None,x#AICPAx#AC:x#Riskx#Assessment,x#Analysisx#andx#Manag
ement,x#Section:x#Differentx#Assurancex#Services


5. C
LOx#3,x#BT:x#C,x#Difficulty:x#Medium,x#TOT:x#2x#min.,x#AACSB:x#None,x#AICPAx#AC:x#Riskx#Assessment,x#Analysisx#andx#Manag
1 | © 2022 John Wiley and Sons, Inc.
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y

,ement,x#Section:x#Demandx#forx#Auditx#andx#Assurancex#Services




2 | © 2022 John Wiley and Sons, Inc.
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y

,6. B
LOx#4,x#BT:x#C,x#Difficulty:x#Easy,x#TOT:x#2x#min.,x#AACSB:x#None,x#AICPAx#AC:x#Riskx#Assessment,x#Analysisx#andx#Managem
ent,x#Section:x#Preparersx#andx#Auditors


7. A
LOx#5,x#BT:x#C,x#Difficulty:x#Easy,x#TOT:x#2x#min.,x#AACSB:x#None,x#AICPAx#AC:x#Reporting,x#Section:x#Thex#Rolex#ofx#Regulato
rsx#andx#Regulations


8. D
LOx#5,x#BT:x#C,x#Difficulty:x#Easy,x#TOT:x#2x#min.,x#AACSB:x#None,x#AICPAx#BC:x#Governancex#Perspective,x#Section:x#Thex#Ro
lex#ofx#Regulatorsx#andx#Regulations


9. D
LOx#6,x#BT:x#C,x#Difficulty:x#Easy,x#TOT:x#2x#min.,x#AACSB:x#None,x#AICPAx#AC:x#Riskx#Assessment,x#Analysisx#andx#Managem
ent,x#Section:x#Auditx#Reportx#onx#Financialx#Statements


10. C
LOx#6,x#BT:x#C,x#Difficulty:x#Easy,x#TOT:x#2x#min.,x#AACSB:x#None,x#AICPAx#AC:x#Reporting,x#Section:x#Auditx#Reportx#onx#thex#
Financialx#Statements


11. B
LOx#7,x#BT:x#C,x#Difficulty:x#Easy,x#TOT:x#2x#min.,x#AACSB:x#None,x#AICPAx#AC:x#Reporting,x#Section:x#Auditx#Reportx#onx#Inte
rnalx#Controlsx#overx#Financialx#Reporting


12. B
LOx#8,x#BT:x#C,x#Difficulty:x#Medium,x#TOT:x#2x#min.,x#AACSB:x#None,x#AICPAx#PC:x#Professionalx#Behavior,x#Section:x#Thex#A
uditx#Expectationx#Gap

ANSWERS TO REVIEW QUESTIONS x# x# x#




R1.1 An assurance service is any service provided by an independent practitioner that im-
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proves the quality of information, or its context, for decision makers. An independent practiti
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oner can verify that the information meets relevant criteria, which provides assurance to user
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s who intend to use the information for decision making. An assurance engagement has thre
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e parties: the assurance provider (auditor/practitioner), the party responsible for providing the
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information (client), and the intended users of the information (investors/lenders/others who r
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ely on the in- formation).
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LOx#1,x#BT:x#C,x#Difficulty:x#Easy,x#TOT:x#5x#min.,x#AACSB:x#None,x#AICPAx#AC:x#Riskx#Assessment,x#Analysisx#andx#Managem
ent,x#Section:x#Assurance,x#Attestation,x#andx#Auditx#Services


R1.2 The criterion used in a financial statement audit to measure and evaluate subject matt
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er is the applicable financial reporting framework used by the client. The most common fram
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ework
3 | © 2022 John Wiley and Sons, Inc.
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, used in the U.S. is Generally Accepted Accounting Principles (GAAP).
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LOx#1,x#BT:x#C,x#Difficulty:x#Easy,x#TOT:x#5x#min.,x#AACSB:x#None,x#AICPAx#AC:x#Measurementx#Analysisx#andx#Interpretation,
x# Sec-x#tion:x#Assurance,x#Attestation,x#andx#Auditx#Services


R1.3 Financial statements are not guaranteed to be free from error or fraud due to several li
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mi-
x#tations. These limitations include the nature of financial reporting, the nature of audit proced
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ures and the need for the audit to be conducted within a reasonable period of time and withi
x# x# x# x# x# x# x# x# x# x# x# x# x# x# x# x# x#


n a rea-
x# x#


x#sonable budget. The nature of financial reporting causes limitations because it includes man
x# x# x# x# x# x# x# x# x# x# x# x#


-
x#agement‘s judgment when applying accounting standards and estimates. The nature of the
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au-
x#dit procedures is a limitation because the auditors have to rely on management to provide a
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ll the necessary documentation needed for the audit. The auditor may arrive at an inappropri
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ate con- x#


x#clusion if information is tampered with or excluded. The last limitation refers to the limited re
x# x# x# x# x# x# x# x# x# x# x# x# x# x# x#


-
x#sources of time and money for an audit engagement. It would be impractical for auditors to
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ex-
x#amine every transaction. Therefore, auditors rely on sampling measures to provide an accur
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ate representation of the population, and sampling cannot provide absolute assurance.
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LOx#2,x#BT:x#C,x#Difficulty:x#Medium,x#TOT:x#15x#min.,x#AACSB:x#None,x#AICPAx#AC:x#Riskx#Assessment,x#Analysisx#andx#Mana
gement,x#Section:x#Differentx#Assurancex#Services


R1.4 Management and those charged with governance can request an operational audit to h
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elp improve the efficiency and effectiveness of a company‘s operations. An organization‘s int
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ernal audit department typically conducts operational audits.
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LOx#2,x#BT:x#C,x#Difficulty:x#Easy,x#TOT:x#5x#min.,x#AACSB:x#None,x#AICPAx#BC:x#Governancex#Perspective,x#Section:x#Differe
ntx#As-x#surancex#Services
R1.5 Investors are interested in the information that financial statements can provide about their
x# x# x# x# x# x# x# x# x# x# x# x# x#


investment. This includes, but is not limited to, information regarding the profitability of the c
x# x# x# x# x# x# x# x# x# x# x# x# x# x#


om-
pany, return on investment, going concern/continuity of operations, and dividend distribution
x# x# x# x# x# x# x# x# x# x# x#


s. An independent audit helps to ensure that the information in the financial statements is cr
x# x# x# x# x# x# x# x# x# x# x# x# x# x# x#


edible and of high quality.
x# x# x# x#


LOx#3,x#BT:x#C,x#Difficulty:x#Easy,x#TOT:x#10x#min.,x#AACSB:x#None,x#AICPAx#BC:x#Governancex#Perspective,x#Section:x#Dema
ndx#forx#Auditx#andx#Assurancex#Services


R1.6 Both the preparer and the auditor have responsibilities regarding the company‘s financi
x# x# x# x# x# x# x# x# x# x# x# x#


al statements. Management (the preparer) is in charge of preparing the financial statements.
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This includes ensuring the information is presented fairly and in compliance with GAAP, or ot
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her ap- x#




4 | © 2022 John Wiley and Sons, Inc.
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