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10/21/11

auditing and assurance services 14th edition solutions manual and test bank by alvin a arens



auditing and assurance services 14th edition  solutions manual and test bank by  alvin a arens  
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sample of  sm
Chapter 1

The Demand for Audit and Other Assurance Services


<      Review Questions

1-1 The relationship among audit services, attestation services, and assurance services is reflected in Figure 1-3 on page 12 of the text. An assurance service is an independent professional service to improve the quality of information for decision makers. An attestation service is a form of assurance service in which the CPA firm issues a report about the reliability of an assertion that is the responsibility of another party. Audit services are a form of attestation service in which the auditor expresses a written conclusion about the degree of correspondence between information and established criteria.
       The most common form of audit service is an audit of historical financial statements, in which the auditor expresses a conclusion as to whether the financial statements are presented in accordance with an applicable financial reporting framework such as U.S. GAAP or IFRS. An example of an attestation service is a report on the effectiveness of an entity’s internal control over financial reporting. There are many possible forms of assurance services, including services related to business performance measurement, health care performance, and information system reliability.

1-2 An independent audit is a means of satisfying the need for reliable information on the part of decision makers. Factors of a complex society which contribute to this need are:

1.                  Remoteness of information
a.                  Owners (stockholders) divorced from management
b.                  Directors not involved in day-to-day operations or decisions
c.                  Dispersion of the business among numerous geographic locations and complex corporate structures
2.                  Biases and motives of provider
a.                  Information will be biased in favor of the provider when his or her goals are inconsistent with the decision maker's goals.
3.                  Voluminous data
a.                  Possibly millions of transactions processed daily via sophisticated computerized systems
b.                  Multiple product lines
c.                  Multiple transaction locations
4.                  Complex exchange transactions
a.                  New and changing business relationships lead to innovative accounting and reporting problems
b.                  Potential impact of transactions not quantifiable, leading to increased disclosures


1-3      1.         Risk-free interest rate  This is approximately the rate the bank could earn by investing in U.S. treasury notes for the same length of time as the business loan.
2.                  Business risk for the customer  This risk reflects the possibility that the business will not be able to repay its loan because of economic or business conditions such as a recession, poor management decisions, or unexpected competition in the industry.
3.                  Information risk  This risk reflects the possibility that the information upon which the business risk decision was made was inaccurate. A likely cause of the information risk is the possibility of inaccurate financial statements.

       Auditing has no effect on either the risk-free interest rate or business risk. However, auditing can significantly reduce information risk.

1-4 The four primary causes of information risk are remoteness of information, biases and motives of the provider, voluminous data, and the existence of complex exchange transactions.
       The three main ways to reduce information risk are:

1.                  User verifies the information.
2.                  User shares the information risk with management.
3.                  Audited financial statements are provided.

       The advantages and disadvantages of each are as follows:


ADVANTAGES
DISADVANTAGES
USER VERIFIES INFORMATION
1.      User obtains information desired.
2.      User can be more confident of the qualifications and activities of the person getting the information.
1.      High cost of obtaining information.
2.      Inconvenience to the person providing the information because large number of users would be on premises.
USER SHARES INFORMATION RISK WITH MANAGEMENT
1.      No audit costs incurred.
1.      User may not be able to collect on losses.
AUDITED FINANCIAL STATEMENTS ARE PROVIDED
1.      Multiple users obtain the information.
2.      Information risk can usually be reduced sufficiently to satisfy users at reasonable cost.
3.      Minimal inconvenience to management by having only one auditor.
1.      May not meet needs of certain users.
2.      Cost may be higher than the benefits in some situations, such as for a small company.

10/2/11

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concepts in federal taxation 2013, 20th edition  kevin e. Murphy, mark higgins solutions manual and test bank
prentice hall's federal taxation 2013 individuals, 26/e thomas r. Pope kenneth e. Anderson  solutions manual  and test bank
prentice hall's federal taxation 2013 comprehensive, 26/e  thomas r. Pope kenneth e. Anderson   solutions manual and test bank
prentice hall's federal taxation 2013 corporations, partnerships, estates & trusts   26/e kenneth e. Anderson  thomas r. Pope  solutions manual and test bank
south-western federal taxation 2013: comprehensive, 36th edition william h. Hoffman, jr., david m. Maloney, william a. Raabe, james c. Young solutions manual and test bank
south-western federal taxation 2013: comprehensive, 36th edition william h. Hoffman, jr., david m. Maloney, william a. Raabe, james c. Young research problem solutions
south-western federal taxation 2013: corporations, partnerships, estates and trusts, 36th edition william h. Hoffman, jr solutions manual and test bank
 south-western federal taxation 2013: corporations, partnerships, estates and trusts, 36th edition william h. Hoffman, jr instructor's guide and  solutions to research problems  and   practice set solutions
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Accounting information systems 12e romney steinbart solutions manual and test bank

 Accounting Information Systems, 12e (Romney/Steinbart)
Chapter 2   Overview of Transaction Processing and ERP Systems

1) What usually initiates data input into a system?
A) The transaction system automatically checks each hour to see if any new data is available for input and processing.
B) The performance of some business activity generally serves as the trigger for data input.
C) A general ledger program is queried to produce a trial balance at the end of an accounting period.
D) Data is only input when a source document is submitted to the accounting department.
Answer:  B
Page Ref: 26
Objective:  Learning Objective 1
Difficulty :  Easy
AACSB:  Analytic

2) An ERP system might facilitate the purchase of direct materials by all of the following except
A) selecting the best supplier by comparing bids.
B) preparing a purchase order when inventory falls to reorder point.
C) routing a purchase order to a purchasing agent for approval.
D) communicating a purchase order to a supplier.
Answer:  A
Page Ref: 37
Objective:  Learning Objective 5
Difficulty :  Moderate
AACSB:  Reflective Thinking

3) Which of the following is not true about the accounts receivable subsidiary ledger?
A) Debits and credits in the subsidiary ledger must always equal.
B) Every credit sale is entered individually into the subsidiary ledger.
C) The total of the subsidiary ledgers must equal the control account.
D) The subsidiary ledgers play an important role in maintaining the accuracy of the data stored in the AIS.
Answer:  A
Page Ref: 28
Objective:  Learning Objective 3
Difficulty :  Moderate
AACSB:  Reflective Thinking
4) Which of the following is not usually a consideration when designing a coding system?
A) Government regulations on coding systems
B) Standardization
C) Future expansion needs
D) Facilitating report preparation
Answer:  A
Page Ref: 29
Objective:  Learning Objective 3
Difficulty :  Easy
AACSB:  Analytic

5) The general ledger
A) summarizes the transactions in journals.
B) only includes balance sheet accounts.
C) is posted in total to the general journal.
D) is the initial place to record depreciation expense.
Answer:  A
Page Ref: 28
Objective:  Learning Objective 2
Difficulty :  Moderate
AACSB:  Reflective Thinking

6) For a retail business, a delivery of inventory, from a vendor (with whom there is an established credit relationship) would be initially recorded in which type of accounting record as part of which transaction cycle?
A) purchases journal; expenditure cycle
B) general journal; expenditure cycle
C) general ledger; expenditure cycle
D) cash disbursements journal; production cycle
Answer:  A
Page Ref: 31
Objective:  Learning Objective 2
Difficulty :  Moderate
AACSB:  Reflective Thinking

7) Which of the following statements regarding special journals is not true?
A) The balances in a special journal must always reconcile to the general ledger.
B) Special journals are used to record large numbers of repetitive transactions.
C) Special journals are periodically summarized and posted to the general ledger.
D) Special journals provide a specialized format for recording similar transactions.
Answer:  A
Page Ref: 31
Objective:  Learning Objective 3
Difficulty :  Easy
AACSB:  Analytic
8) Changing an employee's hourly wage rate would be recorded in which file?
A) Employee master file
B) Employee transaction file
C) Payroll master file
D) Payroll transaction file
Answer:  A
Page Ref: 32
Objective:  Learning Objective 3
Difficulty :  Moderate
AACSB:  Reflective Thinking


9) A typical source document could be
A) in some paper form.
B) a computer data entry screen.
C) a notepad entry.
D) both A and B
Answer:  D
Page Ref: 27
Objective:  Learning Objective 1
Difficulty :  Easy
AACSB:  Analytic

10) Which step below is not considered to be part of the data processing cycle?
A) data input
B) feedback from external sources
C) data storage
D) data processing
Answer:  B
Page Ref: 26
Objective:  Learning Objective 1
Difficulty :  Easy
AACSB:  Analytic

11) Data must be collected about three facets of each business activity. What are they?
A) the business activity, the resources it affects, the people who participate
B) the business activity, the transactions it creates, the impact on the financial statements
C) the inputs, outputs and processes used
D) who is involved, what was sold, how much was paid
Answer:  A
Page Ref: 26
Objective:  Learning Objective 2
Difficulty :  Easy
AACSB:  Analytic
12) The issuing of a purchase order is part of which transaction cycle?
A) the revenue cycle
B) the production cycle
C) the human resources cycle
D) the expenditure cycle
Answer:  D
Page Ref: 27
Objective:  Learning Objective 2
Difficulty :  Moderate
AACSB:  Analytic


13) The collection of job time tickets or time sheets is part of which transaction cycle?
A) revenue cycle
B) production cycle
C) human resources cycle
D) expenditure cycle
Answer:  C
Page Ref: 27
Objective:  Learning Objective 2
Difficulty :  Moderate
AACSB:  Analytic

14) Common source documents for the revenue cycle include all of the following except
A) sales order.
B) receiving report.
C) delivery ticket.
D) credit memo.
Answer:  B
Page Ref: 27
Objective:  Learning Objective 2
Difficulty :  Moderate
AACSB:  Analytic

15) Which of the following documents would be found in the expenditure cycle?
A) delivery ticket
B) time card
C) credit memo
D) purchase order
Answer:  D
Page Ref: 27
Objective:  Learning Objective 2
Difficulty :  Moderate
AACSB:  Analytic
16) Documents that are sent to customers or suppliers and then sent back to the company in the course of a business transaction are known as
A) turnaround documents.
B) source documents.
C) source data automation.
D) transaction documents.
Answer:  A
Page Ref: 27
Objective:  Learning Objective 2
Difficulty :  Easy
AACSB:  Analytic


17) Which of the following is an example of source data automation?
A) a utility bill
B) POS (point-of-sale) scanners in retail stores
C) a bill of lading
D) a subsidiary ledger
Answer:  B
Page Ref: 27
Objective:  Learning Objective 2
Difficulty :  Easy
AACSB:  Analytic

18) Pre-numbering of source documents helps to verify that
A) all transactions have been recorded since the numerical sequence serves as a control.
B) source data automation was used to capture data.
C) documents have been used in order.
D) company policies were followed.
Answer:  A
Page Ref: 27-28
Objective:  Learning Objective 2
Difficulty :  Moderate
AACSB:  Analytic

19) Source documents generally help to improve accuracy in transaction processing because
A) they specify which information to collect.
B) logically related data can be grouped in the same area of the document.
C) they provide directions and steps for completing the form.
D) All of the above are correct.
Answer:  D
Page Ref: 27
Objective:  Learning Objective 2
Difficulty :  Easy
AACSB:  Analytic
20) When the sum of all entries in the subsidiary ledger equals the balance in the corresponding general ledger account, it is assumed that
A) the recording processes were accurate.
B) all source documents were recorded.
C) adjusting entries are not required.
D) no errors exist in the subsidiary ledger.
Answer:  A
Page Ref: 28
Objective:  Learning Objective 3
Difficulty :  Moderate
AACSB:  Analytic

Accounting for governmental and nonprofit entities 16e wilson reck solutions manual and test bank

Accounting for governmental and nonprofit entities 16e wilson reck solutions manual and test bank


South-western federal taxation 2013: taxation of business entities, 16th edition james e. Smith  solutions manual and test bank
concepts in federal taxation 2013, 20th edition  kevin e. Murphy, mark higgins solutions manual and test bank
prentice hall's federal taxation 2013 individuals, 26/e thomas r. Pope kenneth e. Anderson  solutions manual  and test bank
prentice hall's federal taxation 2013 comprehensive, 26/e  thomas r. Pope kenneth e. Anderson   solutions manual and test bank
prentice hall's federal taxation 2013 corporations, partnerships, estates & trusts   26/e kenneth e. Anderson  thomas r. Pope  solutions manual and test bank
south-western federal taxation 2013: comprehensive, 36th edition william h. Hoffman, jr., david m. Maloney, william a. Raabe, james c. Young solutions manual and test bank
south-western federal taxation 2013: comprehensive, 36th edition william h. Hoffman, jr., david m. Maloney, william a. Raabe, james c. Young research problem solutions
south-western federal taxation 2013: corporations, partnerships, estates and trusts, 36th edition william h. Hoffman, jr solutions manual and test bank
 south-western federal taxation 2013: corporations, partnerships, estates and trusts, 36th edition william h. Hoffman, jr instructor's guide and  solutions to research problems  and   practice set solutions
south-western federal taxation 2013: individual income taxes, 36th edition william hoffman solutions manual and test bank
 south-western federal taxation 2013: individual income taxes, 36th edition william hoffman  instructor's guide and  solutions to research problems
income tax fundamentals 2012 30e gerald whittenburg martha buller solutions  manual and test bank



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