Professional Documents
Culture Documents
Modern Auditing:
Auditing:
Assurance
Assurance Services
Services and
and the
the Integrity
Integrity
th
of
Financial
Reporting,
8
of Financial Reporting, 8th Edition
Edition
William C. Boynton
Raymond N. Johnson
Portland State University
Chapter
Chapter 2
2 Overview
Overview
Relationship
Relationship Between
Between Accounting
Accounting
and
and Auditing
Auditing
Important
Important Fundamental
Fundamental
Concepts
Concepts
Verifiability
Fair Presentation
Professional Judgment
Materiality
Independent
Independent Auditor
Auditor
Relationships
Relationships
Management
Board of Directors and Audit Committee
Internal Auditors
Stockholders
Study
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1. It is the responsibility of management to
complete all of the following except:
A. Assess the risk of material misstatement
in the financial statements
B. Measure and record transaction data
C. Classify and summarize recorded data
D. Prepare financial statements per GAAP
A. Assess the risk of material misstatement
in the financial statements
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2. Items that are considered to be _____,
are significant to financial statement
users.
A. Verifiable
B. Material
C. Fairly Presented
D. Recorded
B. Material
Generally
Generally Accepted
Accepted Auditing
Auditing
Standards
Standards (GAAS)
(GAAS)
General Standards
Standards of Field Work
Standards of Reporting
GAAS
GAAS General
General Standards
Standards
Adequate Technical Training and
Proficiency
Independence in Mental Attitude
Due Professional Care
GAAS
GAAS Standards
Standards of
of Field
Field Work
Work
Adequate Planning and Proper
Supervision
Understanding the Entity,
Environment, and Internal Control
Sufficient Competent Audit Evidence
GAAS
GAAS Standards
Standards of
of Reporting
Reporting
Financial Statements Presented in
Accordance with GAAP
Consistency in the Application of GAAP
Adequacy of Informative Disclosures
Expression of Opinion
Additional
Additional Standards
Standards
Statements on Auditing Standards
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3. General Standards include all of
the following except:
A. Adequate Training
B. Independence
C. Understanding the Entity
D. Due Professional Care
C. Understanding the Entity
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4. These standards pertain specifically to
the conduct of the audit at the entitys
place of business.
A. General Standards
B. Standards of Field Work
C. Standards of Reporting
D. Statement on Auditing Standards
B. Standards of Field Work
Assurance
Assurance Provided
Provided by
by an
an Audit
Audit
The
The Auditors
Auditors Standard
Standard Report
Report
Unqualified
Unqualified Opinion
Opinion
Title and Address
Introductory Paragraph
Scope Paragraph
Opinion Paragraph
Firms Signature and Date
Departures
Departures from
from the
the Standard
Standard
Report
Report
Standard Report with Explanatory
Language
Qualified Opinion
Adverse Opinion
Disclaimer of Opinion
Types
Types of
of Auditors
Auditors Reports
Reports and
and
Circumstances
Circumstances
Typical
Typical Report
Report Profiles
Profiles
The
The Auditors
Auditors Standard
Standard Report
Report
on
on Internal
Internal Controls
Controls
Title and Address
Introductory Paragraph
Scope Paragraph
Definition Paragraph
The
The Auditors
Auditors Standard
Standard Report
Report
on
on Internal
Internal Controls
Controls (cont.)
(cont.)
Inherent Limitations Paragraph
Opinion Paragraph
Explanatory Paragraph
Firms Signature and Date
Defining
Defining Criteria
Criteria for
for Departures
Departures
from
from the
the Standard
Standard Report
Report
Departures
Departures from
from the
the Standard
Standard
Report
Report on
on Internal
Internal Controls
Controls
Study
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5. All of the following are components of
assurance provided by an audit except:
A. Auditor independence
B. Reasonable assurance
C. Detecting and reporting illegal acts
D. Guaranteed accuracy of financial
statements
D. Guaranteed accuracy of financial
statements
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6. The standard report includes all of
the following except:
A. Introductory Paragraph
B. Scope Paragraph
C. Explanatory Language Paragraph
D. Opinion Paragraph
C. Explanatory Language Paragraph
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7. This opinion states that the auditor
does not express and opinion on the
financial statements.
A. Unqualified Opinion
B. Qualified Opinion
C. Adverse Opinion
D. Disclaimer of Opinion
D. Disclaimer of Opinion