You are on page 1of 18


The 18th edition of Principles of Auditing & Other Assurance Services provides a carefully balanced presentation of auditing theory and practice. 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 of previous accounting financial, managerial, and systems courses. The text’s first nine chapters emphasize the philosophy and environment of the auditing profession, with special attention paid to the nature and economic purpose of auditing, auditing standards, professional conduct, legal liability, audit evidence, audit planning, consideration of internal control, and audit sampling. Chapters 10 through 16 (the “procedural chapters”) deal with internal control and obtaining evidence about the various financial statement accounts, emphasizing a risk-based approach to selecting appropriate auditing procedures. Chapter 17 presents the auditors’ reporting responsibilities when performing financial statement audits. Chapter 18 provides detailed guidance on integrated audits of public companies performed in accordance with the Sarbanes-Oxley Act of 2002 and SEC requirements. Chapters 19 and 20 present the auditors’ reporting responsibilities and other attestation and accounting services, such as reviews and compilations of financial statements and reports on prospective financial statements. Chapter 21 presents coverage of internal compliance and operational auditing. The text is well suited for an introductory one-semester or one-quarter auditing course. Alternatively, it is appropriate for a two-course auditing sequence that covers the material in greater detail. For example, an introductory course might emphasize Chapters 1 through 10, 16, and 17. A second course may include coverage of the other procedural chapters (Chapters 11 through 15); integrated audits (18); other attestation and accounting services; and internal, operational, and compliance auditing (Chapters 19, 20, and 21). The instructor might also wish to consider covering portions of Chapter 9 on sampling in the second course, with or without ACL software. Overall, the text and supporting materials provide: 1. A balanced presentation. The text provides a carefully balanced presentation of auditing and assurance theory and practice. The concepts are written in a clear, concise, and understandable manner. Real company examples are integrated throughout the text to bring this material to life. Finally, Keystone Computers & Networks, Inc., the text’s illustrative audit case, is integrated into selected chapters, providing students with hands-on audit experience. 2. Organization around balance sheet accounts emphasized in previous accounting courses. Organizing the text around balance sheet accounts is a particularly straightforward and user-friendly way to address the risk assessment–based approach to auditing required by both U.S. and international auditing standards. These standards require an in-depth understanding of the audited company and its environment, a rigorous assessment of the risks of where and how the financial statements could be materially misstated, and an improved linkage between the auditors’ assessed risks and the particulars of audit procedures performed in response to those risks. Chapters 5 through 7 of the text describe the risk assessment approach in detail. Chapters 10 through 16 are aligned with the risk assessment approach presented in the professional standards. Accordingly, the suggested audit approach and procedures of the professional standards flow smoothly from the approach suggested in earlier chapters of the text. In short, our organization of the book facilitates student learning of the risk assessment process in a very straightforward manner. Also, although the text chapters are structured around balance sheet accounts, they include a significant amount of material on transaction cycles. For example, Chapters 10 through 13 include detailed coverage of revenue, cash receipts, acquisitions, and disbursements cycles.

com/whittington18e. 4. Details on these objective questions are discussed in further detail in the following section of this preface. CPA examination support. Ray Whittington Kurt Pany . Strong student and instructor support. O. The address of the Center (and the text Web site) is www. Both the text’s emphasis on current auditing standards and its many objective questions (both multiple choice and other objective format) are aimed at helping students pass the CPA exam. The Center also contains quizzes and other resources to help students in this course.Preface v 3. The Online Learning Center provides instructors and students with a wealth of material to help keep students up-to-date.mhhe. We are confident that the 18th edition of Principles of Auditing & Other Assurance Services will provide students with a clear perspective of today’s auditing environment.

For purposes of AICPA professional standard coverage. 2012. GAAS with international standards. The clarity standards. those standards remain in place for public company audits and are also discussed in the chapter.g. including changes in the standard audit report’s wording and changes in requirements in a number of areas in which a report other than “standard” is issued. but others very major. with an effective date for audits of financial statements for periods ending after December 15. and an audit involving other auditors is now a group audit. This chapter is rewritten to reflect the Auditing Standards Board’s elimination of the longstanding “10 generally accepted auditing standards”—that is. three fieldwork standards. • Chapter 17: Auditors’ Reports. This results in a number of changes relating to this chapter. vi . the three general standards. an explanatory paragraph is now an emphasis of matter. use the term “financial reporting framework” to represent the standards used to prepare historical financial information. while others have not (e. WebTrust). because the PCAOB standards continue to be structured around the 10 standards. Additional new products. are discussed. In addition to the Chapter 19 clarity changes. and four reporting standards. SysTrust. and apply. • Modification of the CPA exam’s Auditing and Attestation section content.” In addition.S. some services seem to have gained a degree of market acceptance (e.New to This Edition The 18th edition has been thoroughly revised to reflect two very major changes in auditing: • The AICPA’s “Clarity Project. Yet. Changes in AICPA terminology reflected here better align U. completely objective form simulations. including the elimination of two “long” simulations on each exam and replacement with 6–7 shorter.. • Chapter 20: Additional Assurance Services: Other Information. Among the most major Clarity Project changes are: • Chapter 2: Professional Standards. • Chapter 19: Additional Assurance Services: Historical Financial Information. such as providing assurance relating to XBRL. But there have also been many other changes. following the international standard approach. understand. two other key changes include: • Chapter 19: Additional Assurance Services: Historical Financial Information. and (2) to converge those standards with the International Standards on Auditing to the extent considered desirable. This area is of particular importance to students who plan to take the CPA exam because the new content specification outline shows that the degree of coverage of this area is significant. In essence. modification of compilation and review standards are reflected in the chapter. coverage includes a presentation of the new “standard” audit report and modified reports. standards. An appendix has been added to this chapter to compare major differences between international and U.. an other matter paragraph or a basis for modification paragraph. at this point. PrimePlus/ElderCare). In addition.g. the “financial reporting framework” becomes the “suitable criteria” for historical financial information. This chapter is rewritten to reflect the fact that the nature of these other services is evolving and. an unqualified opinion is now an unmodified opinion.” which has resulted in a complete revision and recodification of the Auditing Standards Board’s standards (1) to make standards easier to read. For example.S. Almost all outstanding Statements on Auditing Standards were revised. this chapter now discusses in detail the new Principles Underlying an Audit Conducted in Accordance with Generally Accepted Auditing Standards that replaced the 10 standards. MODIFICATIONS TO REFLECT CHANGES IN THE AUDITING STANDARDS The broad scope of the Clarity Project has resulted in changes to each chapter—some relatively minor. including the elimination of “special reports” and replacement with “special-purpose financial reporting frameworks.

MODIFICATIONS THAT REFLECT CPA EXAM QUESTION FORMAT CHANGES We’ve included many new Objective Questions because we believe they will help students both learn the material presented in the text and prepare them for such questions on the CPA exam. We have revised the text and instructor’s test bank questions to reflect these changes. Others are more brief and yet consistent with the new simulation approach. McGRAW-HILL’S CONNECTTM ACCOUNTING The new edition of Whittington/Pany will have McGraw-Hill’s ConnectTM Accounting available for use for the first time. and test bank will be available in static form within ConnectTM Accounting. All applicable multiple choice questions. In addition. A number of these are labeled as “Simulation” questions in that we tried to design them to be similar to the 6–7 that one might expect on the CPA exam. and simulations from the text. TM vii . study guide. problems. The clarity modifications presented force the CPA exam to update its questions to reflect new terminology and requirements. every chapter of the instructor’s test bank now includes one or more other objective format questions. See pages xvi–xviii for more details.

Key Features of the Book The AICPA Auditing Standards Board’s “Clarity Project. and top management must certify the company’s financial statements and provide an assessment of internal control over financial reporting. Chapter 6: The risk assessment approach to an audit is concisely summarized in a summary of the audit process. In addition. The Sarbanes-Oxley Act of 2002 and the resulting Public Company Accounting Oversight Board profoundly affect public accountants. Chapter 5: Includes current documentation requirements. Chapters 5 through 7: Material from the risk assessment standards is thoroughly integrated throughout. the public accounting profession is no longer largely self-regulating. audit documentation. the International Standards are described in the text. with more detailed coverage provided in Chapter 18. which led to passage of the act. CPAs now must issue a publicly available report on the internal control of large publicly traded clients. audit planning. and apply. CPA firms. and their clients. and general records. understand. such as those involving Enron and WorldCom. Most notably. Chapter 4: Clear. The first nine chapters of the text emphasize the philosophy and environment of the profession. 5. structure of CPA firms. concise coverage of CPA legal liability based on suggestions by legal scholar Professor Marianne Jennings of Arizona State University.” intended to both (1) make standards easier to read. Chapter 7: Includes a brief overview of audits of internal control over financial reporting required for large public companies under PCAOB Standard No. audit sampling. and various types of audits and auditors. with special attention paid to the nature and economic purpose of auditing and assurance services. legal liability. and (2) converge standards with the International Standards on Auditing. viii 1 2 3 4 5 6 7 8 9 The Role of the Public Accountant in the American Economy Professional Standards Professional Ethics Legal Liability of CPAs Audit Evidence and Documentation Audit Planning. audit evidence. standards. and Responding Internal Control Consideration of Internal Control in an Information Technology Environment Audit Sampling . An appendix highlights a number of differences between international and U. are integrated throughout as appropriate. consideration of internal control. professional conduct. Chapter 1: Emphasizes the role of the public accountant.S. This chapter also presents the auditors’ internal control communication responsibilities. Understanding the Client. professional standards. Assessing Risks. Chapter 3: Updated to reflect the most recent AICPA and PCAOB requirements. The text carefully integrates coverage of the act’s nature and its effects on the profession in selected chapters. which replace the 10 generally accepted auditing standards for audits of nonpublic companies. Also included is coverage of financial frauds. Chapter 2: Includes detailed coverage of the new Principles Underlying an Audit Conducted in Accordance with Generally Accepted Auditing Standards.

former Deputy Controller. and in completing the audit (Chapter 16). and Revenue 12 Inventories and Cost of Goods Sold 13 Property. This feature has been updated in this edition and illustrates audit methods and provides realistic. Plant. and Compliance Auditing Chapter 17: Thoroughly updated to reflect new reporting requirements of the AICPA clarity standards. thought-provoking case exercises. 5 on the audit of internal control over financial reporting required for public companies. U. Operational. 10 Cash and Financial Investments 11 Accounts Receivable. is the text’s Illustrative Audit Case. the chapters emphasize the risk-based approach to selecting appropriate audit procedures.S. Inc. The case incorporates the use of computerized accounting applications and also integrates the fundamentals of audit sampling from Chapter 9. Office of Management and Budget. Chapter 18: Reflects PCAOB Standard No. This chapter also includes coverage of PCAOB and international audit reports. Other assurance services are included at both a conceptual and practical level. Notes Receivable. and other changes due to the AICPA clarity standards. Jackson. Chapters 10 through 16: These “procedural chapters” deal with internal control and obtaining audit evidence about the various financial statement accounts. in considering internal control and testing account balances (Chapters 11 and 14).. and Equipment: Depreciation and Depletion 14 Accounts Payable and Other Liabilities 15 Debt and Equity Capital 16 Auditing Operations and Completing the Audit 17 Auditors’ Reports 18 Integrated Audits of Public Companies 19 Additional Assurance Services: Historical Financial Information 20 Additional Assurance Services: Other Information 21 Internal. It is updated for the 2007 revision to the “Yellow Book. Chapter 21: Includes a discussion of compliance auditing based on the suggestions of Mr.” ix . if used in combination.Keystone Computers & Networks. Office of Federal Management. the case will help the student develop problem-solving skills in planning (Chapter 6). auditor reporting on financial statements prepared using a special-purpose framework. Although each portion of the case is designed to stand alone. Chapter 20: Discusses a variety of attestation and other assurance services. Chapter 19: Updated to include current coverage of compilation and review engagements. The material on attestation services describes the current professional standards. Norwood J.

In addition. They are now subtitled for easy reference. Auditors often choose to test the computer controls in such situations. difficult audit issues often arise. independence concerns have led to the restrictions presented in this section. On the other. . Focus on the Airline Industry Electronic ticketing has become basic to the airline industry. the auditor is limited in the extent to which he or she can examine “paper” support for transactions. “real world” illustration of points being emphasized in the text. 11. 86 employees left the firm and accepted positions at Enron. audit procedures must be developed relating to the associated revenues and receivables. Again. 13. Illustrative Case The situation in which audit clients hire audit firm personnel is difficult. New cases have been added for recent alleged audit failures. Auditing Fair Value Information As the accounting profession continues to value more assets and liabilities at their fair values. . Questions were raised about the number of ex–Arthur Andersen employees hired by Enron Corporation prior to its collapse (see Chapter 1). questions arose as to the nature of the relationship between continuing Arthur Andersen employees and those of Enron. Colorado. The Employment with Clients The Washington Post indicated that. Like the Illustrative Cases. Accordingly. They even went on Enron employees’ ski trips to Beaver Creek. These cases show the importance of having a thorough knowledge of the audit client’s business and industry. 1/5/11 10:04 PM x .” One Enron employee suggested that “people just thought they were Enron employees .Features of This Edition Illustrative Cases Actual business and accounting examples are used to illustrate key chapter concepts. Under these systems a passenger may book a flight over the telephone or by computer and be assigned a reservation number rather than being issued a physical ticket. over the years Arthur Andersen served as auditor. The cases are boxed and appear throughout the text. and 16. On the one hand. The Wall Street Journal reported that Arthur Andersen auditors and consultants “shared in office birthdays. frequented lunch-time parties in a nearby park and participated in weekend fundraisers for charities. Although both firms refused to disclose details. Since no ticket is created until the passenger checks in for the flight. these cases are boxed and appear throughout the text. the positions and numbers of ex–Arthur Andersen employees hired by Enron seem significant. it provides great professional opportunities for individuals who enter the public accounting profession. they Industry Focus Cases These cases use examples from specific industries to provide students with a detailed. The text includes integrated coverage of fair value accounting in Chapters 5. 10.

00 7462537 INVOICE Wood Supply Co. A direct approach to this objective is to confirm amounts on deposit and obtain or prepare reconciliations between bank statements and the accounting records.00 By: ____________________ Bill Jones Accounts Receivable 8250.00 8250.: ___________ Nov. The auditors will prepare or obtain a schedule that lists all of the client’s cash accounts. CA 92345 _________________ Nov. 2. The auditors will trace and reconcile all accounts to the general ledger.00 Audit Objectives The use of Audit Objectives is a basic tool in audit program design. These help the auditor focus on the reason a procedure is being done and provide a check to assure that all management assertions in the financial statements are audited. CA 95483 ____________________ Nov. 10. One of the objectives of the auditors’ work on cash is to substantiate the existence of the amount of cash shown on the balance sheet. n/40 Terms: ____________ Enter our order for Qty 20 doz.00 355. 200X Shipped: _________________ Jon Trucking Shipped via: ______________ Wood Supply Co. 27. _________________ Irvine.Illustrative Documents Documents included in the various procedural chapters (Chapters 10 through 16) provide concise.00 Qty 20 doz.00 Total $4700. the account number. this schedule will typically list the bank. 200X Date: ____________________ 78644 Your order no. Suisun City. CA 95483 Pilot Stores Sold to: _________________ 1425 G St. 25. Sales 78644 PURCHASE ORDER Pilot Stores 1425 G St. 21 Main St. Accounts Sales 8250. 200X Date: ____________________ Jon Trucking Ship via: _________________ 2/10. and the year-end balance per books. To: ____________________ 21 Main St. CA 92345 Wood Supply Co.00 ________ $ 8250. Confirm Cash Balances with Financial Institutions. the account type.00 3550.00 3550. Primary Audit Objectives: Existence Accuracy Cutoff ✓ ✓ ✓ 1. realistic examples of the documents associated with the various transaction cycles. Obtain Analyses of Cash Balances and Reconcile Them to the General Ledger.00 355. 10 Description Q Clamps #26537489 120 hp Generators #45983748 Price $ 235. 10 Description Q Clamps 120 hp Generators Price $ 235. For cash in bank accounts. ____________________ Suisun.00 Total $4700. Irvine. C fi ti f t d it b di t i ti ith fi i l i tit xi Primary Audit Objectives: Existence Occurrence Accuracy Cutoff i h ✓ ✓ ✓ ✓ .

the goals of the providers of information may run somewhat counter to those of the users of the information. we have integrated ACL software and related materials with the text at no extra cost. Errors may involve mistakes in gathering or processing data. of which audits of financial statements are an important type. the govservices.Illustrations. Describe the nature of financial statement audits. Errors and Fraud Auditing standards define errors as unintentional misstatements or omissions of amounts or disclosures in the financial statements. relates to intentional acts that cause a misstatement of the financial statements. ernment in obtaining revenue based on income tax returns—all are relying upon information provided by others. unreasonable accounting estimates arising from oversight or misinterpretation of facts. Next.mhhe. LO2 LO3 LO4 Fraud Because fraud is such an important aspect of today’s auditing environment. the banker deciding whether to approve a loan. Accordingly. including fraud detection. Identify assurance services that involve attestation. Implicit in this line of reasoning is recognition of the social need for independent public accountants—individuals of professional competence and integrity who can tell us whether the information that we use constitutes a fair picture of what is really going on. xii . Misstatements due to fraud may occur due to either (1) fraudulent financial reporting or (2) misappropriation of assets (also referred to as “defalcation”). The text’s Web site (www. Our primary purpose in this chapter is to make clear the nature of independent audits and the accounting profession. D i h l i f di h di i d h ik f i l ACL Software and Related Materials CPAs in public practice and internal auditors are increasingly using ACL to perform audit includes two stand-alone modules: (1) audit sampling and (2) overall ACL coverage that integrates ACL into the text. Learning objectives Dependable information is essential to the very existence of our society. you should be able to: LO1 Describe the nature of assurance services. we describe those assurance services that involve attestation. Chapter Learning Objectives These objectives provide a concise presentation of each chapter’s most important concepts. flowcharts have been colorcoded consistently to help students see and better understand the concepts. We begin with a discussion of the broader concept of assurance services. Explain why audits are demanded by society. Fraud. and Flowcharts These are used throughout to enhance and clarify the presentation. In this edition. Either or both of these modules may be incorporated into the course to supplement traditional coverage. They are now numbered and referenced in the chapter. or mistakes in the application of applicable accounting principles. we’ve included a logo wherever we talk about its implications in the auditing process. In many of these situations. Tables. as the term is used in AICPA AU 240 (PCAOB 316). The investor making a decision to buy or sell secuDescribe the nature of assurance rities. Another purpose of this chapter is to summarize the influence exerted on the public accounting profesi b th A i I tit t f C tifi d P bli A t t (AICPA) th Fi i l LO1 After studying this chapter.

the VP-Finance. Inc. Problems are keyed to the chapter’s Learning Objectives. Internet Assignments. a family-owned business based in Tombstone. These questions. builds custom homes with special features. He explains that all of the money came from separately billed but unrecorded change orders to items in contracts com xiii . and 14 include the case material and exercises for the Keystone Computers & Networks. Questions Requiring Analysis The Questions Requiring Analysis require thoughtful consideration of a realistic auditing situation and the application of professional standards. The first Objective Question in each chapter is composed of at least 12 multiple choice questions. and others describe actual practice situations. and/or Ethics Cases. the illustrative audit case. Hide-It has been an audit client for three years. calls to tell you that the Arizona Department of Revenue has seized control of a Hide-It bank account that includes about $450. In-Class Team Cases These cases are meant to be solved in class either by teams of students or. Questions Requiring Analysis. tend to stress value judgments and conflicting opinions. Objective Questions.000 of company funds. Arizona. and ACL Assignments. As indicated earlier in the preface. such as hidden rooms and hidden wall safes. and each are labeled as a “Simulation. Objective Questions The Objective Questions are similiar in format to the CPA exam. You are about to sign off on a “clean” opinion on HI’s current annual financial statements when Art Hyde. All applicable Objective Questions/Problems are available with McGraw-Hill’s Connect Accounting. by individuals. Hide-It (HI). the account is not currently recorded in the accounting system and you had been unaware of it.END-OF-CHAPTER MATERIAL The material at the end of each chapter includes a combination of: Review Questions. which are generally shorter than the problems. Problems.. Also included with certain end-of-chapter materials are Spreadsheet Templates. Art assures you that the funds. 11. All applicable Objective Questions/ Problems are available with McGraw-Hill’s Connect Accounting. Appendixes to Chapters 6. In response to your questions about the origin of the funds. had been obtained legitimately. A number of these questions are taken from CPA and CIA examinations. They help provide the student with an active learning environment in which to apply key concepts included in each chapter. Problems Many of the Problems are drawn from CPA and CIA examinations. In-Class Team Cases.” Others address basic concepts and information covered by simulations but may not in and of themselves represent an example of a complete simulation. These problems are retained because they require a relatively detailed analysis of audit situations. though not recorded as revenue. In-Class Team Case LO 3 2–38. Research and Discussion Cases. a number of the following Objective Questions are similar or identical to the new simulations that one might expect on the CPA exam. if the instructor prefers. Review Questions The Review Questions are closely related to the material in the chapter and provide a convenient means of determining whether students have grasped the major concepts and details contained in that chapter.

profitable. The cases acquaint students with the professional literature. develop research and communication skills required on the new CPA exam. and demonstrate that several diverse. Ultro’s management generated the funds by selling company automobiles. While each exercise may “stand alone. This part of the case illustrates selective audit planning working papers prepared by the staff of Adams. Inc. 11. for this year’s audit. The chairman of the board of the civic organization is Lewis Edmond. Potter was quite excited when Edmond indicated that his corporation needed an audit and he wished to discuss the matter with her.indd 232accumulation and analysis of uncorrected misstatements. The cases present a series of situations that result in ethical dilemmas of the type that beginning accountants may expect to encounter in practice. who is also the owner of a real estate development firm. 14. these case exercises take the student from the original planning of an audit through the testing of controls.. Ethics Case LO 2. was recently appointed to the board of directors of a local civic organization. You should read xiv . Enormo Corporation is a large multinational audit client of your CPA firm. Ltd. which were fully depreciated on Ultro’s books. substantive testing. yet defensible.000 worth of foreign currency was smuggled out of the Caribbean country by one of Ultro’s employees and deposited in one of Enormo’s bank accounts. The CPA firm of Adams. Potter was told that Tierra Corporation needed the audit to obtain a substantial amount of additional financing to acquire another company. Students are required to research appropriate professional literature and then apply critical thinking skills to logically formulate and justify their personal positions on the issues involved in each case.Research and Discussion Cases These cases involve controversial situations that do not lend themselves clear-cut answers.” when used in combination. Exercises are included in Chapters 6. has audited the financial statements of KCN for the past three years. KCN is a company that sells and installs computer workstations and networking software to business customers. Tierra Corporation. is a successful electronics assembly company that operates in a small Caribbean country. (KCN) case is used throughout the text to illustrate audit procedures and methodology. Barnes & Co. Violations of these laws may result in fines or the expropriation of the assets of the company. and whi1103X_ch06_184-244. Presently. Keystone Computers & Networks. These cases are included in selected chapters. Ethics Cases Ethics Cases allow the instructor to discuss ethical issues in an integrated manner throughout the course. Tammy Potter. 6 6–48. and committed to growth The audit fee for the engagement should be substantial Illustrative Audit Case Exercises These exercises all pertain to the text’s updated continuing integrated case. Inc. 12/14/10 4:30 PM Appendix 6C Illustrative Audit Case: Keystone Computers & Networks. and 16. a new partner with the regional CPA firm of Tower & Tower. positions may be argued persuasively in a given situation. Barnes & Co. you discover that $50. During the discussion. One of Enormo’s subsidiaries. to company employees. Ultro. LO 3 Research and Discussion Case 2–39. During the current year. Part I: Audit Planning The Keystone Computers & Networks. Tierra Corporation is successful. Inc. The country in which Ultro operates has very strict laws governing the transfer of funds to other countries.

edu/CCL/34Act/index. Those materials are composed of two stand-alone modules—(1) audit sampling and (2) overall ACL skills coverage—that integrate ACL into text and course coverage. Use the Internet to access the text of the Securities Exchange Act of 1934. which the Web site supplements with ACL requirements. review the ratios and identify financial statement accounts that should be investigated because the related ratios are not comparable to prior-year b. industry averages. Complete the working paper by computing the financial ratios for 20X5. c. 4 Required: 6C–4. Internet Assignments whi1103X_ch06_184-244. The text of the Securities Exchange Act of 1934 may be accessed on the Internet. Read and summarize the internal control requirements of Section 13(b)(2) of the act. Either or both of these modules may be incorporated into the course to supplement traditional coverage.indd 244 19/01/11 7:55 PM Internet assignments are included among the end-of-chapter problem material for selected chapters.indd 226 12/14/10 4:30 PM . using the following address: www. Chapter 9 identifies with the ACL Logo problems. g LO 3.Spreadsheet Templates Spreadsheet templates are available on the text’s Web site to be used in conjunction with selected audit case exercises. For each account identified in part (b). p A partially completed analytical ratios working paper for Keystone Computers & is presented on page 241.. Inc. After completing part (a). The exercises with templates are identified by a logo in the margin. a. These assignments require students to use the Internet to do audit research and are identified with a logo in the margin.mhhe. b. ACL Assignments The text’s ACL materials are included on the text’s Web site (www. LO 3 6–37. xv whi1103X_ch06_184-244. Also. or your knowledge of the company.html Required: a. list potential reasons for the unexpected account balances and related ratios.uc.

and more. an eBook. Instructor Library The Connect Accounting Instructor Library is your repository for additional resources to improve student engagement in and out of class. practice materials. manually change grades or leave comments for students to review. xvi . creating assignments is easier than ever. • Have assignments scored automatically. and assignment grading to make classroom management more efficient than ever. and higher retention of knowledge. Online Assignments Connect Accounting helps students learn more efficiently by providing feedback and practice material when and where they need it. so you can spend more time teaching and less time managing. Connect Accounting grades homework automatically and gives immediate feedback on any questions students may have missed. such as lectures. • Streamline lesson planning. McGraw-Hill’s Connect Accounting is an online assignment and assessment solution that connects students with the tools and resources necessary to achieve success through faster learning. more efficient studying. • Access and review each response. Simple Assignment Management With Connect Accounting. More Teaching. giving students immediate feedback on their work and comparisons with correct answers.Technology New to This Edition McGraw-Hill’s ConnectTM Accounting TM Less Managing. The Connect Accounting Instructor Library includes: • • • • • Instructor’s Lecture Guide Keystone Case and Solutions Solutions Manual Test Bank eBook Version of the Text Student Library • The Connect Accounting Student Library is the place for students to access additional resources. • Go paperless with the eBook and online submission and grading of student assignments. student progress reporting. The assignment management function enables you to: • Create and deliver assignments easily with selectable end-of-chapter or Study Guide questions and test bank items. • Reinforce classroom concepts with practice tests and instant quizzes. You can select and use any asset that enhances your lecture. Greater Learning.

For more information about Connect. simplified. Say goodbye to the days of logging in to multiple applications. allowing for more productive use of lecture and office hours. a new McGraw-Hill company. teaching. and student learning. • Access an instant view of student or class performance relative to learning objectives. section. The progress-tracking function enables you to: • View scored work immediately and track individual or group performance with assignment and grade reports. you capture all computer screens and corresponding audio in a format that is easily searchable. the better they • Collect data and generate reports required by many accreditation organizations. With Tegrity Campus. With a simple one-click start-and-stop process. Help turn your students’ study time into learning moments immediately supported by your lecture. allowing for anytime. watch a two-minute Flash demo at http://tegritycampus.mhhe. not the tops of their heads. across an entire semester of class recordings. • Dynamic links between the problems or questions you assign to your students and the location in the eBook where that problem or question is covered. Deep integration of content and tools. In fact. thoroughly tested system supports you in preparing students for the world that awaits. or other mobile device. • A powerful search function to pinpoint and connect key concepts in a snap. Tegrity Campus: Lectures 24/7 Tegrity Campus. Connect Accounting also offers a wealth of content resources for both instructors and students. In short. an iPod. and class is performing. Connect Accounting offers you and your students powerful tools and features that optimize your time and energies. such as AACSB and AICPA. but you also get deep integration of McGraw-Hill content and content engines right in Blackboard. which provides seamless integration of the eBook and Connect Accounting. McGraw-Hill’s ConnectTM Plus Accounting McGraw-Hill reinvents the textbook learning experience for the modern student with Connect Plus Accounting. Tegrity Campus’s unique search feature helps students efficiently find what they need.Student Progress Tracking Connect Accounting keeps instructors informed about how each student. studies prove it. Lecture Capture will make it more likely for you to see students’ faces. enabling you to focus on course content. when they need it. go to www. hear. 2. frame by frame. and experience class resources. Whether you’re choosing a book for your xvii . is a service that makes class time available 24/7 by automatically capturing every lecture. Educators know that the more students can see. To learn more about Tegrity. Connect Plus Accounting provides all of the Connect Accounting features plus the following: • An integrated eBook. Students can replay any part of any class with easy-to-use browser-based viewing on a PC or Mac. Your life. Now you and your students can access McGraw-Hill’s ConnectTM and CreateTM right from within your Blackboard course—all with one single sign-on. anywhere access to the textbook. Not only do you get single sign-on with ConnectTM and or contact your local McGraw-Hill sales representative. you also increase intent listening and class participation by easing students’ concerns about note-taking. What does this mean for you? 1. Online Course Management McGraw-Hill Higher Education and Blackboard have teamed up.mcgrawhillconnect. This state-of-the-art.

You can contact our Technical Support Analysts 24 hours a day. or search our knowledge bank of Frequently Asked Questions on our support Web site. all the tools you need are right where you want them—inside of Blackboard. One of our Technical Support Analysts will assist you in a timely fashion. In addition to Blackboard integration. Whether your institution is already using Blackboard or you just want to try Blackboard on your own. xviii .g. McGraw-Hill and Blackboard can now offer you easy access to industry-leading technology and content. call 800-331-5094 or visit www. course cartridges for whichever online course management system you use (e. They are easier than ever to install on the latest version of the course management system available today. WebCT or eCollege) are available for Whittington 18e. Seamless gradebooks..course or building ConnectTM assignments. we have a solution for you. A solution for everyone. When a student completes an integrated ConnectTM assignment. McGraw-Hill/Irwin CARES At McGraw-Hill/Irwin. get product training online. For Customer Support. Our cartridges are specifically designed to make it easy to navigate and access content online. the grade for that assignment automatically (and instantly) feeds your Blackboard grade center. Be sure to ask your local McGraw-Hill representative for details. we understand that getting the most from new technology can be challenging. 3. Are you tired of keeping multiple gradebooks and manually synchronizing grades into Blackboard? We thought so. That’s why our services don’t stop after you purchase our book. whether your campus hosts it or we do.mhhe.

to the general knowledge and skill guidelines found in the AACSB standards. 18e. an important element of some accreditation standards. While Principles of Auditing & Other Assurance Services. EZ Test. ISBN-10 0077328485) allows you to access the text’s ancillary materials in one convenient CD. McGraw-Hill’s ConnectTM Accounting Connect Accounting offers a number of powerful tools and features to make managing your classroom easier. all text figures. and the faculty. Connect Accounting with Whittington 18e offers enhanced features and technology to help both you and your students make the most of your time inside and outside the classroom. You can then use the reporting features of EZ Test to aggregate student results in similar fashion. and PowerPoint presentations. 18e. Each test bank question for Principles of Auditing & Other Assurance Services. including: • • • • • • • Instructor’s Lecture Guide Solutions Manual Keystone Case and Solutions ACL Instructor Materials Test Bank EOC Conversion Guide Text Updates AACSB Statement The McGraw-Hill Companies is a proud corporate member of AACSB International. 18e. Spreadsheets. Test Bank. maps to a specific chapter learning outcome/objective listed in the text. you will have access to these same resources via the Instructor Library.Instructor Supplements Assurance of Learning Ready Many educational institutions today are focused on the notion of assurance of learning. to easily query for learning outcomes/objectives that directly relate to the learning objectives for your course. and its teaching package make no claim of any specific AACSB qualification or evaluation. labeled selected questions according to the six general knowledge and skills areas. xix . This includes the Instructor’s Lecture Guide. The AACSB does also charge schools with the obligation of doing assessment against their own content and learning goals. we have. Online Learning Center (www. making the collection and presentation of assurance of learning data simple and easy. we have sought to recognize the curricula guidelines detailed in AACSB standards for business accreditation by connecting selected questions in Principles of Auditing & Other Assurance Services. Recognizing the importance and value of AACSB accreditation. Principles of Auditing & Other Assurance Services. are provided only as a guide for the users of this text. Computerized Test Bank. If you choose to use Connect Accounting with Whittington. See page xvi for more whittington18e) The password-protected instructor side of the book’s Online Learning Center (OLC) houses all of the instructor resources you need to administer your course. 18e. Solutions Manual. yet powerful solution. You can use our test bank software.mhhe. is designed specifically to support your assurance of learning initiatives with a simple. The AACSB leaves content coverage and assessment clearly within the realm and control of individual schools. the mission of the school. Instructor’s Resource CD-ROM The Instructor’s Resource CD-ROM (ISBN-13 9780077328481. 18e. The statements contained in Principles of Auditing & Other Assurance Services. within the Test Bank.

the authors’ comments on each chapter. and within the Connect Instructor Library. McGraw-Hill’s EZ Test is a flexible electronic testing program. plus instructors may add their own questions and sort questions by format. A Solutions Manual includes thorough and up-to-date solutions to the text’s questions. and exercises. These are included on the Instructor’s Resource CD and on the Online Learning Center. and numerous instructional aids. EZ Test Available on the Instructor’s Resource CD. xx . The program allows instructors to create tests from book-specific items.Instructor’s Lecture Guide and Solutions Manual Our Instructor’s Lecture Guide includes topical outlines of each chapter. EZ Test can also scramble questions and answers for multiple versions of the same test. It accommodates a wide range of question types. problems. Instructor’s OLC.

Statements on Standards for Attestation Engagements. written by the text’s authors. enables students to review text material and test their understanding. more efficient studying. Special attention is given to the AICPA Code of Professional Conduct. offering all kinds of supplementary help for students as they read. Statements on Standards for Accounting and Review Services. The Institute of Internal Auditors (IIA). students will have access to these same resources via the Student whittington18e) The Online Learning Center (OLC) follows Whittington 18e chapter by chapter. and guidelines developed for other types of assurance services. Statements on Auditing Standards. Since the guide includes answers to the questions and exercises. the Securities and Exchange Commission (SEC). Online Learning Center (www. ISBN10 0077328507).mhhe. The Study Guide questions are also available within Connect Accounting. Study Guide A Study Guide (ISBN-13 9780077328504. and higher retention of knowledge. the Financial Accounting Standards Board (FASB). The cooperation of the AICPA and the IIA in permitting the use of their published materials and of questions from the CPA and CIA examinations brings to the text an element of authority not otherwise available.Student Supplements McGraw-Hill’s ConnectTM Accounting McGraw-Hill’s Connect Accounting helps prepare students for their future by enabling faster learning. The guide includes a summary of each chapter’s highlights and an abundance of objective questions and exercises. it provides immediate feedback to students. the Public Company Accounting Oversight Board (PCAOB). and the International Federation of Accountants (IFAC). xxi . The OLC includes the following resources to help students study more efficiently: • Online Quizzes • Student PowerPoint® Slides REFERENCES TO AUTHORITATIVE SOURCES Numerous references are made to the pronouncements of the American Institute of Certified Public Accountants (AICPA). TM • Keystone Case • ACL Materials • Auditing weblinks If Connect Accounting is used in this course. the Governmental Accounting Standards Board (GASB). See page xvi for more details.