SOLUTIONS MANUAL
Auditing: A Practical Approach with Data
Analytics
ST
Raymond N. Johnson, Laura Davis Wiley, Robyn Moroney, Fiona Campbell
UV
2nd Edition
IA
_A
PP
RO
VE
D?
, TABLE OF CONTENTS
Auditing: A Practical Approach with Data Analytics (2nd Edition)
Solutions Manual Resource Guide
ST
Chapter 1 Introduction and Overview of Audit and Assurance
UV
Chapter 2 Professionalism and Professional Responsibilities
Chapter 3 Risk Assessment Part I: Audit Risk and Audit Strategy
Chapter 4 Risk Assessment Part II: Understanding the Client
IA
Chapter 5 Audit Evidence
Chapter 6 Gaining an Understanding of the Client’s System of Internal Control
_A
Chapter 7 Risk Response: Performing Tests of Controls
Chapter 8 Audit Data Analytics
Chapter 9 Risk Response: Performing Substantive Procedures
PP
Chapter 10 Risk Response: Audit Sampling for Substantive Procedures
Chapter 11 Auditing the Revenue Process
RO
Chapter 12 Auditing the Purchasing and Payroll Processes
Chapter 13 Auditing Cash, Inventory, and Related Income Statement Accounts
Chapter 14 Auditing Investing and Financing Activities
VE
Chapter 15 Completing the Audit
Chapter 16 Reporting on the Audit
D?
, SOLUTION MANUAL FOR
Auditing A Practical Approach with Data Analytics, 2nd Edition Raymond N. Johnson,
Laura Davis Wiley, Robyn Moroney, Fiona Campbell, Jane Hamilton
ST
Chapter 1-16
CHAPTER 1
Introduction and Overview of Audit and Assurance
Learning Objectives
UV
1. Differentiate among assurance, attestation, and auditing services.
2. Describe the different types of assurance services.
3. Explain the demand for audit and assurance services.
4. Discuss the different roles of the financial statement preparer and the auditor.
IA
5. Identify the roles of different regulators and organizations that affect the audit profession.
6. Explain the concepts of reasonable assurance, materiality, and the nature of an unquali-
fied/unmodified report on the audit of financial statements.
7. Explain the concept of reasonable assurance and the nature of an unqualified report on
_A
internal controls over financial reporting.
8. Discuss the audit expectation gap.
ANSWERS TO MULTIPLE-CHOICE QUESTIONS
PP
1. C
LO 1, BT: C, Difficulty: Easy, TOT: 2 min., AACSB: None, AICPA AC: Risk Assessment, Analysis and Management,
Section: Assurance, Attestation, and Audit Services
RO
2. A
LO 2, BT: C, Difficulty: Easy, TOT: 2 min., AACSB: None, AICPA AC: Risk Assessment, Analysis and Management,
Section: Different Assurance Services
VE
3. B
LO 2, BT: C, Difficulty: Easy, TOT: 2 min., AACSB: None, AICPA AC: Risk Assessment, Analysis and Management,
Section: Different Assurance Services
4. C
D?
LO 2, BT: C, Difficulty: Medium, TOT: 2 min., AACSB: None, AICPA AC: Risk Assessment, Analysis and Management,
Section: Different Assurance Services
5. C
LO 3, BT: C, Difficulty: Medium, TOT: 2 min., AACSB: None, AICPA AC: Risk Assessment, Analysis and Management,
Section: Demand for Audit and Assurance Services
For Instructor Use Only
, 6. B
LO 4, BT: C, Difficulty: Easy, TOT: 2 min., AACSB: None, AICPA AC: Risk Assessment, Analysis and Management,
Section: Preparers and Auditors
ST
7. A
LO 5, BT: C, Difficulty: Easy, TOT: 2 min., AACSB: None, AICPA AC: Reporting, Section: The Role of Regulators and
Regulations
UV
8. D
LO 5, BT: C, Difficulty: Easy, TOT: 2 min., AACSB: None, AICPA BC: Governance Perspective, Section: The Role of
Regulators and Regulations
9. D
IA
LO 6, BT: C, Difficulty: Easy, TOT: 2 min., AACSB: None, AICPA AC: Risk Assessment, Analysis and Management,
Section: Audit Report on Financial Statements
10. C
_A
LO 6, BT: C, Difficulty: Easy, TOT: 2 min., AACSB: None, AICPA AC: Reporting, Section: Audit Report on the Financial
Statements
11. B
LO 7, BT: C, Difficulty: Easy, TOT: 2 min., AACSB: None, AICPA AC: Reporting, Section: Audit Report on Internal
PP
Controls over Financial Reporting
12. B
LO 8, BT: C, Difficulty: Medium, TOT: 2 min., AACSB: None, AICPA PC: Professional Behavior, Section: The Audit
RO
Expectation Gap
ANSWERS TO REVIEW QUESTIONS
R1.1 An assurance service is any service provided by an independent practitioner that im-
proves the quality of information, or its context, for decision makers. An independent practitioner
VE
can verify that the information meets relevant criteria, which provides assurance to users who
intend to use the information for decision making. An assurance engagement has three parties:
the assurance provider (auditor/practitioner), the party responsible for providing the information
(client), and the intended users of the information (investors/lenders/others who rely on the in-
formation).
D?
LO 1, BT: C, Difficulty: Easy, TOT: 5 min., AACSB: None, AICPA AC: Risk Assessment, Analysis and Management,
Section: Assurance, Attestation, and Audit Services
R1.2 The criterion used in a financial statement audit to measure and evaluate subject matter is
the applicable financial reporting framework used by the client. The most common framework
For Instructor Use Only
Auditing: A Practical Approach with Data
Analytics
ST
Raymond N. Johnson, Laura Davis Wiley, Robyn Moroney, Fiona Campbell
UV
2nd Edition
IA
_A
PP
RO
VE
D?
, TABLE OF CONTENTS
Auditing: A Practical Approach with Data Analytics (2nd Edition)
Solutions Manual Resource Guide
ST
Chapter 1 Introduction and Overview of Audit and Assurance
UV
Chapter 2 Professionalism and Professional Responsibilities
Chapter 3 Risk Assessment Part I: Audit Risk and Audit Strategy
Chapter 4 Risk Assessment Part II: Understanding the Client
IA
Chapter 5 Audit Evidence
Chapter 6 Gaining an Understanding of the Client’s System of Internal Control
_A
Chapter 7 Risk Response: Performing Tests of Controls
Chapter 8 Audit Data Analytics
Chapter 9 Risk Response: Performing Substantive Procedures
PP
Chapter 10 Risk Response: Audit Sampling for Substantive Procedures
Chapter 11 Auditing the Revenue Process
RO
Chapter 12 Auditing the Purchasing and Payroll Processes
Chapter 13 Auditing Cash, Inventory, and Related Income Statement Accounts
Chapter 14 Auditing Investing and Financing Activities
VE
Chapter 15 Completing the Audit
Chapter 16 Reporting on the Audit
D?
, SOLUTION MANUAL FOR
Auditing A Practical Approach with Data Analytics, 2nd Edition Raymond N. Johnson,
Laura Davis Wiley, Robyn Moroney, Fiona Campbell, Jane Hamilton
ST
Chapter 1-16
CHAPTER 1
Introduction and Overview of Audit and Assurance
Learning Objectives
UV
1. Differentiate among assurance, attestation, and auditing services.
2. Describe the different types of assurance services.
3. Explain the demand for audit and assurance services.
4. Discuss the different roles of the financial statement preparer and the auditor.
IA
5. Identify the roles of different regulators and organizations that affect the audit profession.
6. Explain the concepts of reasonable assurance, materiality, and the nature of an unquali-
fied/unmodified report on the audit of financial statements.
7. Explain the concept of reasonable assurance and the nature of an unqualified report on
_A
internal controls over financial reporting.
8. Discuss the audit expectation gap.
ANSWERS TO MULTIPLE-CHOICE QUESTIONS
PP
1. C
LO 1, BT: C, Difficulty: Easy, TOT: 2 min., AACSB: None, AICPA AC: Risk Assessment, Analysis and Management,
Section: Assurance, Attestation, and Audit Services
RO
2. A
LO 2, BT: C, Difficulty: Easy, TOT: 2 min., AACSB: None, AICPA AC: Risk Assessment, Analysis and Management,
Section: Different Assurance Services
VE
3. B
LO 2, BT: C, Difficulty: Easy, TOT: 2 min., AACSB: None, AICPA AC: Risk Assessment, Analysis and Management,
Section: Different Assurance Services
4. C
D?
LO 2, BT: C, Difficulty: Medium, TOT: 2 min., AACSB: None, AICPA AC: Risk Assessment, Analysis and Management,
Section: Different Assurance Services
5. C
LO 3, BT: C, Difficulty: Medium, TOT: 2 min., AACSB: None, AICPA AC: Risk Assessment, Analysis and Management,
Section: Demand for Audit and Assurance Services
For Instructor Use Only
, 6. B
LO 4, BT: C, Difficulty: Easy, TOT: 2 min., AACSB: None, AICPA AC: Risk Assessment, Analysis and Management,
Section: Preparers and Auditors
ST
7. A
LO 5, BT: C, Difficulty: Easy, TOT: 2 min., AACSB: None, AICPA AC: Reporting, Section: The Role of Regulators and
Regulations
UV
8. D
LO 5, BT: C, Difficulty: Easy, TOT: 2 min., AACSB: None, AICPA BC: Governance Perspective, Section: The Role of
Regulators and Regulations
9. D
IA
LO 6, BT: C, Difficulty: Easy, TOT: 2 min., AACSB: None, AICPA AC: Risk Assessment, Analysis and Management,
Section: Audit Report on Financial Statements
10. C
_A
LO 6, BT: C, Difficulty: Easy, TOT: 2 min., AACSB: None, AICPA AC: Reporting, Section: Audit Report on the Financial
Statements
11. B
LO 7, BT: C, Difficulty: Easy, TOT: 2 min., AACSB: None, AICPA AC: Reporting, Section: Audit Report on Internal
PP
Controls over Financial Reporting
12. B
LO 8, BT: C, Difficulty: Medium, TOT: 2 min., AACSB: None, AICPA PC: Professional Behavior, Section: The Audit
RO
Expectation Gap
ANSWERS TO REVIEW QUESTIONS
R1.1 An assurance service is any service provided by an independent practitioner that im-
proves the quality of information, or its context, for decision makers. An independent practitioner
VE
can verify that the information meets relevant criteria, which provides assurance to users who
intend to use the information for decision making. An assurance engagement has three parties:
the assurance provider (auditor/practitioner), the party responsible for providing the information
(client), and the intended users of the information (investors/lenders/others who rely on the in-
formation).
D?
LO 1, BT: C, Difficulty: Easy, TOT: 5 min., AACSB: None, AICPA AC: Risk Assessment, Analysis and Management,
Section: Assurance, Attestation, and Audit Services
R1.2 The criterion used in a financial statement audit to measure and evaluate subject matter is
the applicable financial reporting framework used by the client. The most common framework
For Instructor Use Only
