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Solution Manual for Principles of Auditing and Other Assurance Services, 23rd Edition 2024, by Ray Whittington, Kurt Pany, All Chapters 1 - 21, Complete Newest Version $17.99   Add to cart
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Solution Manual for Principles of Auditing and Other Assurance Services, 23rd Edition 2024, by Ray Whittington, Kurt Pany, All Chapters 1 - 21, Complete Newest Version
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Solution Manual for Principles of Auditing and Other Assurance Services, 23rd Edition 2024, by Ray Whittington, Kurt Pany, All Chapters 1 - 21, Complete Newest Version Chapter 1: The Role of the Public Accountant in the American Economy Chapter 2: Professional Standards Chapter 3: Professional Ethi...

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  • November 1, 2024
  • 523
  • 2024/2025
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  • Auditing & Other Assurance Services, 23rd Edition
  • Auditing & Other Assurance Services, 23rd Edition

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SOLUTION MANUAL FOR
Principles Of Auditing And Other Assurance Services

23rd Edition By Ray Whittington Kurt
ALL Chapters (1 - 21)

,  Table of Contents
y y




Chaptery1:yTheyRoleyofytheyPublicyAccountantyinytheyAmericanEconomy

Chaptery2:yProfessionalyStandards

Chaptery3:yProfessionalyEthics

Chaptery4:yLegalyLiabilityyofyCPAs

Chaptery5:yAudityEvidenceyandyDocumentation

Chaptery6:yAudityPlanning,yUnderstandingytheyClient,yAssessingRisks,yandyResponding

Chaptery7:yInternalyControl

Chaptery8:yConsiderationyofyInternalyControlyinyanyInformationTechnologyyEnvironment

Chaptery9:yAuditySampling

Chaptery10:yCashyandyFinancialyInvestments

Chaptery11:yAccountsyReceivable,yNotesyReceivable,yandRevenue

Chaptery12:yInventoriesyandyCostyofyGoodsySold

Chaptery13:yProperty,yPlant,yandyEquipment:yDepreciationyandDepletion

Chaptery14:yAccountsyPayableyandyOtheryLiabilities

Chaptery15:yDebtyandyEquityyCapital

Chaptery16:yAuditingyOperationsyandyCompletingytheyAudit

Chaptery17:yAuditors’yReports

Chaptery18:yIntegratedyAuditsyofyPublicyCompanies

Chaptery19:yAdditionalyAssuranceyServices:yHistoricalyFinancialInformation

Chaptery20:yAdditionalyAssuranceyServices:yOtheryInformation

Chaptery21:yInternal,yOperational,yandyComplianceyAuditing

,CHAPTER 1 y




The Role of the Publi
y y y y



c Accountant in the
y y y



American Economy y




ReviewyQuestions

1-1 They―crisisyofycredibility‖ylargelyyaroseyfromytheynumberyofycompaniesythatyrestatedytheirypreviouslyyissu
edyfinancialystatementsyasyayresultyofy accountingyirregularitiesyandyfraud.y Especiallyyresponsibleywereythe
yveryyvisibleyEnronyandyWorldComyfraudycases.yBothycompaniesy filedyfory bankruptcyyandyconstitutedyth

eylargestycompaniesyinyAmericanyhistoryytoydoyso.y Theyextentyofytheyaccountingyirregularitiesyandyfraudy
beingyinvestigatedyandydisclosedybroughtyintoyquestionytheyeffectivenessyofyfinancialystatementyaudits.y In
yaddition,ytheycriminalyconvictionyofyArthuryAndersen,yLLP,yoneyofytheythenyBigy5yaccountingyfirms,yon yc

hargesyofydestroyingydocumentsyrelatedytoytheyEnronycaseybroughtyintoyquestionytheyethicsystandardsyofyt
heyprofession.

1-2 Assuranceyservicesyareyprofessionalyservicesythatyenhanceytheyqualityyofyinformation,yoryitsycontext,yfor
ydecision-

making.yTheytwoytypesyare:y(a)ythoseythatyincreaseytheyreliabilityyofyinformationyandy(b)ythoseythatyinv
olveyputtingyinformationyinyayformyorycontextythatyfacilitatesydecision-making.

1-3 Ayfinancialystatementyaudityis,ybyyfar,ytheymostycommonytypeyofyattestyengagement.y Theyoverallyassertion
,ymadeybyymanagement,ymostyfrequentlyyisythatytheyfinancialystatementsyfollowygenerallyyacceptedyaccoun
tingyprinciples.

1-4 Aylargeycorporationywithysecuritiesylistedyonyaystockyexchangeyisyrequiredybyytheyrulesyofytheystockyexchan
geyandybyytheyrulesyofytheySecuritiesy andyExchangeyCommissionytoyprovideyanyaudity reportywithytheyannu
alyfinancialystatementsyfurnishedytoyitsystockholders.y Ityalsoyisyrequiredytoyengageytheyauditorsytoyprovidey
anyopinionyonyitsyinternalycontrol.yApartyfromylegalyrequirements,yhowever,yaylargeylistedycorporationyre
cognizesythatyitymustymaintainyinvestoryconfidenceyinytheyreliabilityyofyitsyfinancialystatementsy andyinterna
lycontrolyovery financialyreportingy ify ity isy toycontinueytoybeyableytoysecureycapitalyfromytheypublic.yTheyrep
ortybyyayfirmyofycertifiedypublicyaccountantsyaddsycredibilityytoytheyfinancialystatementsypreparedybyytheyc
orporation.y Whenyaysmallyfamily-
ownedyenterpriseyelectsy toyhaveyanyaudit,ytheypurposeyusuallyyisytoyuseytheyauditors'yreportytoysupportyanya
pplicationyforyaybankyloan.

, 1-5 Ayreportybyyanyindependentypublicyaccountantyconcerningytheyfairnessyofyaycompany'syfinancialystatement
syisycommonlyyrequiredyinytheyfollowingysituations:

(1) Applicationyforyaybankyloan.
(2) Establishingycredity forypurchaseyofy merchandise,yequipment,yoryotheryassets.
(3) Reportingyoperatingyresults,yfinancialyposition,yandycashyflowsy toyabsenteeyownersy (stockholder
syorypartners).
(4) Issuanceyofysecuritiesybyyaycorporation.
(5) Annualyfinancialystatementsy byyaycorporationywithysecuritiesy listedyonyaystockyexchangeyorytrade
dyoverytheycounter.
(6) Saleyofyanyongoingybusiness.
(7) Terminationyofyay partnership.

1-6 Toyaddycredibilityytoyfinancialystatementsyisytoyincreaseytheylikelihoodythatytheyyhaveybeenypreparedyfollo
wingytheyappropriateycriteria,yusuallyygenerallyyacceptedyaccountingyprinciples.y Asysuch,yanyincreaseyinycr
edibilityyresultsyinyfinancialystatementsythatycanybeybelievedyandyreliedyuponybyythirdyparties.

1-7 Businessyriskyisytheyriskythatytheyinvestmentywillybeyimpairedybecauseyaycompanyyinvestedyinyisy unableyt
oymeetyitsyfinancialyobligationsydueytoyeconomicyconditionsyorypoorymanagementydecisions.yInformationy
riskyisytheyriskythatytheyinformationyusedytoyassessybusinessyriskyisynotyaccurate.yAuditorsycanydirectlyy
reduceyinformationyrisk,ybutyhaveyonlyylimitedyeffectyonybusinessyrisk.

1-8 Atytheybeginningyofytheycentury,ytheyprincipalyobjectiveyofyauditingywasytheypreventionyandydetectionyofyf
raud.yAudityworkycenteredyonytheybalanceysheet,ybecauseytheyincomeystatementywasyregardedyasyhighlyyco
nfidentialyandynoty forypublicydisclosure.y Today,ytheyprincipalyobjectiveyofyauditingyisy toyformyanyopinion
yonytheyfairnessyofyfinancialystatementsy andytheiryconformityywithygenerallyyacceptedyaccountingyprinciple

s.y Butytheyprofessionalystandardsyalsoyrequireythatyanyauditybeydesignedytoyprovideyreasonableyassurancey
ofydetectingymaterialymisstatements,ydueytoyerrorsy oryfraud.y Particularyemphasisy isyplacedyonytheyincome
ystatementy whichyisy ofygreaty importanceytoyinvestors.y Auditingytodayyalsoyhasy theyobjectivesy ofymeetingyt

heyrequirementsyofytheySecuritiesyandyExchangeyCommissiony(SEC)y andytheyPublicyCompanyyAccountin
gyOversightyBoardyforypublicycompanies.

1-9 Theystatementy isyincorrect.yTheyincreasingyintegratedydatabasesyofy today,yalongywithyavailableyaudi
typroceduresymakeyauditedyentireypopulationsyaypossibilityyinymanyysituations.

1-10 Anyoperationalyaudityattemptsytoymeasureytheyeffectivenessyandyefficiencyyofyayspecificyunityofyanyorg
anization.yItyinvolvesymoreysubjectiveyjudgmentsythanyaycomplianceyaudityoryanyaudityofyfinancialystat
ementsybecauseytheycriteriay ofyeffectivenessyandyefficiencyyofydepartmentalyperformanceyareynoty asycl
earlyyestablishedyasyareymanyylawsyandyregulationsyorygenerallyyacceptedyaccountingyprinciples.
Theyreportypreparedyafterycompletionyofyanyoperationalyaudityisy usuallyydirectedytoymanagementy
ofytheyorganizationyinywhichytheyaudityworkywasydone.

1-11 Aycomplianceyaudityisyanyauditytoydetermineywhetheryfinancialyreportsyoryotheryassertionsyareyinycomplia
nceywithyestablishedycriteria.y Theynecessaryyingredientsyareyverifiableydatayandytheyexistenceyofystandard
syestablishedybyyanyauthoritativeybody.y Anyoperationalyaudit,yonytheyotheryhand,yisyayreviewyofyaydepart
mentyoryotheryunityofyaybusinessyorygovernmentalyorganizationytoymeasureytheyeffectivenessyandyefficien
cyyofyoperations.y InternalyauditorsyoftenyperformyoperationalyauditsyasydoyauditorsyemployedybyytheyGo
vernmentyAccountabilityyOfficey(GAO)yofytheyfederalygovernment.

1-12 Internalyauditorsymustybeyindependentyofytheydepartmentyheadsyandyotherylineyexecutivesywhoseyworkythe
yyreview.yHowever,yinternalyauditorsyareynotyindependentyinytheysameysenseyasyaypublicyaccountingyfirm.

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