Professional Documents
Culture Documents
ch01 - Auditing, Attestation, and Assurance
ch01 - Auditing, Attestation, and Assurance
ANSWER: C
ANSWER: C
ANSWER: D
ANSWER: D
2 Chapter 1 Auditing, Attestation, and Assurance
ANSWER: A
ANSWER: B
ANSWER: C
ANSWER: A
d. Financial statements.
ANSWER: C
ANSWER: B
ANSWER: D
ANSWER: D
d. adcb
ANSWER: A
ANSWER: A
ANSWER: C
ANSWER: B
ANSWER: B
ANSWER: A
ANSWER: C
COMPLETION
ANSWER: RISK-BASED
6 Chapter 1 Auditing, Attestation, and Assurance
ANSWER: GAAP
ANSWER: COMPLETENESS
MATCHING:
a. existence or occurrence
b. completeness
c. rights and obligations
d. valuation or allocation
e. presentation and disclosure
SOLUTION:
1. d
2. a
3. c
4. e
5. b
6. e
7. d
8. d
9. d
10.d
Problem/Essay
Final Audit
Required:
SOLUTION:
a. Audit planning; interim audit; final audit; audit
report.
b. Systematic auditing means that the auditor studies and
tests the system of internal control before testing the
substance of transactions and balances. Strong
internal control increases the level of confidence and
decreases the extent of transaction and balance
testing.
c. Strengths: The auditors tested internal control over
cash receipts and disbursements before auditing cash
balances.
Weaknesses: 1. Jenkins and Lukins audited
property, plant, and equipment balances and accounts
receivable balances during the interim audit. These
procedures are typically applied on the final audit.
Moreover, internal controls over sales and property
transactions were not tested and evaluated prior to
auditing the balances. 2. Either Jenkins or Lukins
should have tested internal controls over both cash
receipts and disbursements transactions. Dividing
these duties was inappropriate and failed to maximize
efficiency and effectiveness. 3. Internal control
over sales transactions should have been performed
during the interim audit. 4. A signed copy of the
engagement letter should have been obtained as a first
step in the acceptance process prior to conducting any
of the audit field work. 5. There is no indication
that internal controls over property or inventory
transactions were ever tested. 6. Internal control
Chapter 1 Auditing, Attestation, and Assurance 9