TEST BANK - Principles of Auditing and Other Assurance
Services 22nd Edition by Ray Whittington, Kurt Pany
,Table of Content
9 9
Chapter919The9Role9of9the9Public9Accountant9in9the9American9Economy9 Ch
apter929Professional9Standards
Chapter939Professional9Ethics9 Chapt
er949Legal9Liability9of9CPAs
Chapter959Audit9Evidence9and9Documentation
Chapter969Audit9Planning,9Understanding9the9Client,9Assessing9Risks,9and9
Responding
Chapter979Internal9Control
Chapter989Consideration9of9Internal9Control9in9an9Information9Technolog
y9 Environment
Chapter999Audit9Sampling
Chapter9109Cash9and9Financial9Investments
Chapter9119Accounts9Receivable,9Notes9Receivable,9and9Revenue9 Cha
pter9129Inventories9and9Cost9of9Goods9Sold
Chapter9139Property,9Plant,9and9Equipment:9Depreciation9and9Depletion9
Chapter9149Accounts9Payable9and9Other9Liabilities
Chapter9159Debt9and9Equity9Capital
Chapter9169Auditing9Operations9and9Completing9the9Audit
Chapter9179Auditors’9Reports
Chapter9189Integrated9Audits9of9Public9Companies
Chapter9199Additional9Assurance9Services:9Historical9Financial9 Informati
on
Chapter9209Additional9Assurance9Services:9Other9Information9 Chapt
er9219Internal,9Operational,9and9Compliance9Auditing
, Full Test Bank for Principles of Auditing and Other Assurance
9 9 9 9 9 9 9 9 9
Services 22ndEdition by Ray Whittington, Kurt Pany
9 9 9 9 9 9
Answers9are9at9the9end9of9each9chapter9 Chapt
er91
Student9name:9
1) Accountants9are9regulated9by9a9variety9of9organizations.9Match9the9statement
s9 withthe9most9directly9related9organization:
● Accounting9and9Review9Services9Committee.
● American9Institute9of9Certified9Public9Accountants.
● Auditing9Standards9Board.
● Federal9Accounting9Standards9Advisory9Board.
● Financial9Accounting9Standards9Board.
● General9Accounting9Office.
● Government9Accounting9Standards9Board.
● Public9Company9Accounting9Oversight9Board.
● Securities9and9Exchange9Commission.
● State9Boards9of9Accountancy.
Organizations9may9be9used9once,9more9than9once,9or9not9at9all.
Statements Organizations
A. Develops9accounting9standardsfor
9 public9and9nonpublic9companies.
B. Develops9accounting9standardsfor9the
U.S.9Government.
C. Improves9standards9of9financial9 acco
unting9for9state9and9local9government9 en
tities.
D. Issues9auditing9standards9forpubli
c9 companies.
E. Issues9CPA9certificates.
F. Prepares9the9CPA9exam.
Organizations:9American9Institute9of9Certified9Public9Accountants,9Federal9Accounting9
Standards9Advisory9Board,9Financial9Accounting9Standards9Board,9Government9 Account
ing9Standards9Board,9Public9Company9Accounting9Oversight9Board,9State9Boards9 of9Acco
untancy.
, 2) The9Sarbanes-
Oxley9Act9of920029made9significant9reforms9for9public9companies9 andtheir9auditors.
a. Describe9the9events9that9led9up9to9the9passage9of9the9Act.
b. Describe9the9major9changes9made9by9the9Act.
3) Many9people9confuse9the9responsibilities9of9the9independent9auditor
s9 and9theclient's9management9with9respect9to9audited9financial9statements.
a. Describe9management's9responsibility9regarding9audited9financial9statements.
b. Describe9the9independent9auditors'9responsibility9regarding9audited9financial9statements.
c. Evaluate9the9following9statement:9"If9the9auditors9disagree9with9management
9 regarding9an9accounting9principle9used9in9the9financial9statements,9the9auditors9sho
uld9 expresstheir9views9in9the9notes9to9the9financial9statements."
4) An9investor9is9considering9investing9in9one9of9two9companies.9The9companies9hav
e9 verysimilar9reported9financial9position9and9results9of9operations.9However,9only9one9o
f9 the9companies9has9its9financial9statements9audited.
a. Describe9 what9 creates9 the9 demand9 for9 an9 audit9 in9this9 situation.9 Include9
a9 discussion9of9 how9 audited9 financial9 statements9 facilitate9 this9 investment9 transacti
on,9 and9the9effect9of9theaudit9on9business9risk9and9information9risk.
b. Identify9 the9 potential9 consequences9 to9 the9 company9 of9 not9 having9 it
s9 financialstatements9audited.
5) A9summary9of9findings9rather9than9assurance9is9most9likely9to9be9included9in9a(n):
A) Agreed-upon9procedures9report.
B) Compilation9report.
C) Audit9report.
D) Review9report.
Services 22nd Edition by Ray Whittington, Kurt Pany
,Table of Content
9 9
Chapter919The9Role9of9the9Public9Accountant9in9the9American9Economy9 Ch
apter929Professional9Standards
Chapter939Professional9Ethics9 Chapt
er949Legal9Liability9of9CPAs
Chapter959Audit9Evidence9and9Documentation
Chapter969Audit9Planning,9Understanding9the9Client,9Assessing9Risks,9and9
Responding
Chapter979Internal9Control
Chapter989Consideration9of9Internal9Control9in9an9Information9Technolog
y9 Environment
Chapter999Audit9Sampling
Chapter9109Cash9and9Financial9Investments
Chapter9119Accounts9Receivable,9Notes9Receivable,9and9Revenue9 Cha
pter9129Inventories9and9Cost9of9Goods9Sold
Chapter9139Property,9Plant,9and9Equipment:9Depreciation9and9Depletion9
Chapter9149Accounts9Payable9and9Other9Liabilities
Chapter9159Debt9and9Equity9Capital
Chapter9169Auditing9Operations9and9Completing9the9Audit
Chapter9179Auditors’9Reports
Chapter9189Integrated9Audits9of9Public9Companies
Chapter9199Additional9Assurance9Services:9Historical9Financial9 Informati
on
Chapter9209Additional9Assurance9Services:9Other9Information9 Chapt
er9219Internal,9Operational,9and9Compliance9Auditing
, Full Test Bank for Principles of Auditing and Other Assurance
9 9 9 9 9 9 9 9 9
Services 22ndEdition by Ray Whittington, Kurt Pany
9 9 9 9 9 9
Answers9are9at9the9end9of9each9chapter9 Chapt
er91
Student9name:9
1) Accountants9are9regulated9by9a9variety9of9organizations.9Match9the9statement
s9 withthe9most9directly9related9organization:
● Accounting9and9Review9Services9Committee.
● American9Institute9of9Certified9Public9Accountants.
● Auditing9Standards9Board.
● Federal9Accounting9Standards9Advisory9Board.
● Financial9Accounting9Standards9Board.
● General9Accounting9Office.
● Government9Accounting9Standards9Board.
● Public9Company9Accounting9Oversight9Board.
● Securities9and9Exchange9Commission.
● State9Boards9of9Accountancy.
Organizations9may9be9used9once,9more9than9once,9or9not9at9all.
Statements Organizations
A. Develops9accounting9standardsfor
9 public9and9nonpublic9companies.
B. Develops9accounting9standardsfor9the
U.S.9Government.
C. Improves9standards9of9financial9 acco
unting9for9state9and9local9government9 en
tities.
D. Issues9auditing9standards9forpubli
c9 companies.
E. Issues9CPA9certificates.
F. Prepares9the9CPA9exam.
Organizations:9American9Institute9of9Certified9Public9Accountants,9Federal9Accounting9
Standards9Advisory9Board,9Financial9Accounting9Standards9Board,9Government9 Account
ing9Standards9Board,9Public9Company9Accounting9Oversight9Board,9State9Boards9 of9Acco
untancy.
, 2) The9Sarbanes-
Oxley9Act9of920029made9significant9reforms9for9public9companies9 andtheir9auditors.
a. Describe9the9events9that9led9up9to9the9passage9of9the9Act.
b. Describe9the9major9changes9made9by9the9Act.
3) Many9people9confuse9the9responsibilities9of9the9independent9auditor
s9 and9theclient's9management9with9respect9to9audited9financial9statements.
a. Describe9management's9responsibility9regarding9audited9financial9statements.
b. Describe9the9independent9auditors'9responsibility9regarding9audited9financial9statements.
c. Evaluate9the9following9statement:9"If9the9auditors9disagree9with9management
9 regarding9an9accounting9principle9used9in9the9financial9statements,9the9auditors9sho
uld9 expresstheir9views9in9the9notes9to9the9financial9statements."
4) An9investor9is9considering9investing9in9one9of9two9companies.9The9companies9hav
e9 verysimilar9reported9financial9position9and9results9of9operations.9However,9only9one9o
f9 the9companies9has9its9financial9statements9audited.
a. Describe9 what9 creates9 the9 demand9 for9 an9 audit9 in9this9 situation.9 Include9
a9 discussion9of9 how9 audited9 financial9 statements9 facilitate9 this9 investment9 transacti
on,9 and9the9effect9of9theaudit9on9business9risk9and9information9risk.
b. Identify9 the9 potential9 consequences9 to9 the9 company9 of9 not9 having9 it
s9 financialstatements9audited.
5) A9summary9of9findings9rather9than9assurance9is9most9likely9to9be9included9in9a(n):
A) Agreed-upon9procedures9report.
B) Compilation9report.
C) Audit9report.
D) Review9report.
