Multiple databases allow the case to be reused with different data from term to term. Upon publication, this text will be the most up-to-date auditing text on the market. An Integrated, Up-to-Date Approach to Auditing and Assurance Services Comprehensive and up-to-date, including discussion of new standards, codes, and concepts, Auditing and Assurance Services: An Integrated Approach presents an integrated concepts approach to auditing that details the process from start to finish.
Based on the author's belief that the fundamental concepts of auditing center on the nature and amount of evidence that auditors should gather in specific engagements, this edition's primary objective is to illustrate auditing concepts using practical examples and real-world settings.
The Sixteenth Edition remains up-to-date with examples of key real-world audit decisions and an emphasis on audit planning, risk assessment processes, and collecting and evaluating evidence in response to risks.
When a difficult transaction is encountered, auditors must take the time to fully understand the economic substance of that transaction and then critically evaluate, with skepticism, the evidence provided by the client to justify its accounting treatment. There are no shortcuts allowed. Rather, auditors must always hold a belief that a potential conflict of interest exist between the auditor and management and they must be unbiased and objective when making their professional judgments.
CPAs have assured vote counts Academy Awards , dollar amounts of prizes that sweepstakes have claimed to award, accuracy of advertisements, investment performance statistics, and characteristics claimed for computer software programs. The AICPA views operational auditing as a type of consulting or advisory service offered by public accounting firms. Specifically, the elements of expanded-scope auditing include 1 financial and compliance audits, 2 economy and efficiency audits, and 3 program results audits.
In these types of situations, there would be a demand for a compliance audit which would be designed to insure that the school district complies with the stated policies and procedures of the program. They also might have to audit for fraud and tax evasion. Other examples include state and federal bank examiners who are responsible for auditing banks, savings and loan associations, and otherfinancial institutions for evidence of solvency and compliance with banking and other related laws and regulations.
For CPAs in public practice, hours of continuing education is required every three years with no less than 20 hours in any one year. For CPAs not in public practice, the general requirement is or fewer 90 in some states every three years. At the same time, new CPAs must pay a fee to obtain a state license to practice. Thereafter, state boards of accountancy regulate the behavior of CPAs under their jurisdiction enforcing state rules of conduct and supervise the continuing education requirements.
As a result, the state boards play an important role in the CPA certification and licensure process. The process is known as reciprocity.
Many CPAs hold certificates and licenses in several states. From a global perspective, individuals must be licensed in each country. Because attestation and audit engagements are subsets of assurance engagements, this is an example of an assurance engagement.
However, each response is an example of an assurance engagement; thus, the answer is e. Incorrect This is an audit engagement to give an opinion on financial statements. Because attestation and audit engagements are subsets of assurance engagements, all are assurance engagements. Thus, the answer is e. Incorrect This is an assurance engagement on the performance of golf balls. Correct Because attestation and audit engagements are subsets of assurance engagements, all of the responses are examples of assurance engagements.
The auditor must make sure that the management team does not violate the accounting rules when doing so. IN essence, this statement characterizes why professional skepticism is required to be exercised by auditors. Incorrect Professional obligations are not related to an attitude of professional skepticism. Incorrect While it is true that financial statement and financial data are verifiable, this does not related to the reasons why an auditor needs to begin an audit with an attitude of professional skepticism.
Incorrect While work on a forecast would potentially be covered by the attestation standards, the auditors must provide assurance about some type of management assertion in an attestation engagement. Correct This is the basic definition of an attestation service, as articulated in the book and the professional standards.
Incorrect Since there is no assurance about any management assertion when preparing a tax return with information that has not been reviewed or audited, this type of tax work is not considered an attestation service.
Incorrect Since there is no assurance about any management assertion when giving expert testimony about particular facts in an income tax case, this type of work is not considered an attestation service. Incorrect The objective of environmental auditing is to help achieve and maintain compliance with environmental laws and regulations and to help identify and correct unregulated environmental hazards. This answer is therefore incorrect.
Incorrect The objective of financial auditing is to obtain assurance on the conformity of financial statements with generally accepted accounting principles. Correct Operational auditing refers to the study of business operations for the purpose of making recommendations about the economic and efficient use of resources, effective achievement of business objectives, and compliance with company policies.
Incorrect This is not the primary objective of an operational audit. However, while completing an operational audit, a professionally skeptical auditor should still be concerned about compliance with financial accounting standards. Correct This statement exactly characterizes the goal of an operational audit.
In addition, the statement is part of the basic definition of operational auditing. Incorrect An operational audit does not focus on the financial statements of an entity. Incorrect While analytical tools and skills may be used during an operational audit, they are also a very important aspect of financial auditing. This is achieved by the expression of an opinion by the auditor on whether the financial statements are prepared, in all material respects, in accordance with an applicable financial reporting framework.
As a result, this is the correct response. The definition is general enough to include other financial reporting frameworks as well, such as IFRS. The reference to the SEC is wrong. This phrase is found in the AAA definition of the audit found in this book. Incorrect While complexity is an important condition that increases the demand for reliable information, the potential conflict of interest between management and the bank is far and away the biggest factor driving the demand for audited financial statements.
Incorrect While remoteness is an important condition that increases the demand for reliable information, the potential conflict of interest between management and the bank is far and away the biggest factor driving the demand for audited financial statements.
Incorrect While the consequences of making a bad decision are an important condition that increases the demand for reliable information, the potential conflict of interest between management and the bank is far and away the biggest factor driving the demand for audited financial statements.
Correct The potential conflict of interest between management and the bank is far and away the biggest factor driving the demand for audited financial statements.
Consider for example a company that was desperate for cash in order to survive. Would it be possible that the management team would present unreliable financial statements to the bank in order to get a desperation loan?
Because of this possibility, a financial statement audit is needed to add credibility to the financial statements.
Incorrect According to Section of the Sarbanes-Oxley Act, internal audit services are prohibited. Correct Sarbanes-Oxley prohibits the provision of all of the services listed in answers a, b, and c; therefore, d all of the above is the best response. Incorrect Financial statement auditors do not reduce business risk.
Correct After completing a financial statement audit, information risk has been reduced for investors. Incorrect Complexity creates demand for accounting services but is not an objective of the financial statement audit.
Incorrect Auditors do not directly control the timeliness of financial statements. Management must first provide the information to be audited. Incorrect A financial statement opinion is the objective of a financial statement audit, not a compliance audit.
Incorrect A basis for a report on internal control is the objective of an internal control audit under Section of the Sarbanes-Oxley Act, not a compliance audit. Incorrect A study of effective and efficient resources is the objective of an operational audit, not a compliance audit. Incorrect While successful completion of the Uniform CPA is necessary to be licensed as a CPA, a candidate also requires the proper experience and proper education. Thus, letter d. Incorrect While proper experience is necessary to be licensed as a CPA, a candidate also requires the successful completion of the Uniform CPA and proper education.
Incorrect While proper education is necessary to be licensed as a CPA, a candidate also requires the successful completion of the Uniform CPA and proper experience. This is the responsibility of the GAO. Incorrect The CIA is not responsible for monitoring the use of public funds by public officials.
Incorrect The SEC is not responsible for monitoring the use of public funds by public officials. Correct The mission of the U. Government Accountability Office is to ensure that public officials are using public funds efficiently, effectively, and economically.
Incorrect A financial audit is typically not included as part of a performance audit. Messier employs the audit approach currently being used by auditing professionals. This approach is a direct result of the demands of Sarbanes-Oxley, which has changed the way auditors do their jobs. The approach emphasizes understanding the entity i. Written in a clear and understandable manner, it is particularly appropriate for students who have had limited or no audit experience.
The approach is to integrate auditing material with that. Home Auditing Assurance Services. Loose Leaf for Auditing Assurance Services. Strawser,Jay C. Modern Auditing by William C. Boynton,Raymond N. Loose Leaf for Auditing Assurance Services. Author : Timothy J. Strawser,Jay C. Auditing Assurance Services. Auditing Assurance Services Book Review:.
Author : David N. Auditing and Assurance Services Book Review:. Auditing and Assurance Services Global Edition. Modern Auditing. Author : William C. Boynton,Raymond N. Modern Auditing Book Review:. Louwers,Robert J. Author : Alvin A. Arens,Randal J. Elder,Mark S. Beasley,Chris E. Author : William F.
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