Auditing And Assurance Services An Integrated Approach 15th Edition Arens Solutions Manual

This is completed downloadable of Auditing And Assurance Services An Integrated Approach 15th Edition Arens Solutions Manual

Product Details:

• ISBN-10 ‏ : ‎ 0133125637
• ISBN-13 ‏ : ‎ 978-0133125634
• Author:  Alvin A. Arens (Author), Randal J. Elder (Author), Mark S. Beasley (Author)

Auditing and Assurance Services: An Integrated Approach presents an integrated concepts approach that shows readers the auditing process from start to finish. This text prepares readers for real-world audit decision making by using illustrative examples of key audit decisions, with an emphasis on audit planning, risk assessment processes and collecting and evaluating evidence in response to risks.

Table of Content:

The Auditing Profession 
The Demand for Audit and Other Assurance Services 3 Learning Objectives 3 
Nature of Auditing 4 Distinction Between Auditing and Accounting 6 Economic Demand for Auditing 6 Assurance Services 8 Types of Audits 13 Types of Auditors 15 Certi-ed Public Accountant 17 
Summary 18 Essential Terms 18 Review Questions 19 Multiple Choice Questions from CPA Examinations 20 Discussion Questions and Problems 21 Internet Problem 1-1: Sarbanes/Oxley Act Internal Control Reporting Requirements 24 
The CPA Profession 25 Learning Objectives 25 
Certi-ed Public Accounting Firms 26 Activities of CPA Firms 27 Structure of CPA Firms 28 Sarbanes/Oxley Act and Public Company Accounting Oversight Board 30 Securities and Exchange Commission 31 American Institute of Certi-ed Public Accountants (AICPA) 32 Generally Accepted Auditing Standards 33 Statements on Auditing Standards 36 International Standards on Auditing 37 Quality Control 37 
Summary 39 Essential Terms 40 Review Questions 41 Multiple Choice Questions from CPA Examinations 41 Discussion Questions and Problems 43 Internet Problem 2-1: PCAOB Standing Advisory Group 44 
Audit Reports 45 Learning Objectives 45 
Standard Unquali-ed Audit Report 46 
Combined Reports on Financial Statements and Internal Control Over Financial Reporting Under Section 404 of the Sarbanes /Oxley Act 49 
Unquali-ed Audit Report with Explanatory Paragraph or Modi-ed Wording 51 
Departures from an Unquali-ed Audit Report 55 
Materiality 56 
Discussion of Conditions Requiring a Departure 59 
Auditor's Decision Process for Audit Reports 63 Impact of E-Commerce on Audit Reporting 65 
Summary 65 Essential Terms 66 Review Questions 66 Multiple Choice Questions from CPA Examinations 67 Discussion Questions and Problems 69 Internet Problem 3-1: Research Annual Reports 74 
4	Professional Ethics 75 Learning Objectives 75 
What Are Ethics? 76 Ethical Dilemmas 77 Special Need for Ethical Conduct in Professions 80 Code of Professional Conduct 81 Independence 85 Independence Rule of Conduct and Interpretations 88 Other Rules of Conduct 93 Enforcement 100 
Summary 100 Essential Terms 102 Review Questions 102 Multiple Choice Questions from CPA Examinations 103 Discussion Questions and Problems 104 Cases 107 Internet Problem 4-1: PCAOB Disciplinary Actions 110 
5	Legal Liability 111 Learning Objectives 111 
Changed Legal Environment 112 Distinguishing Business Failure, Audit Failure, and Audit Risk 113 Legal Concepts Affecting Liability 114 Liability to Clients 116 Liability to Third Parties Under Common Law 119 Civil Liability Under the Federal Securities Laws 121 Criminal Liability 125 The Profession's Response to Legal Liability 127 Protecting Individual CPAs from Legal Liability 128 
Summary 129 Essential Terms 130 Review Questions 131 Multiple Choice Questions from CPA Examinations 131 Discussion Questions and Problems 133 Case 137 Internet Problem 5-1: SEC Enforcement 137 
PART 2 
6 
The Audit Process 
Audit Responsibilities and Objectives 139 Learning Objectives 139 
Objective of Conducting an Audit of Financial Statements 140 Management's Responsibilities 141 Auditor's Responsibilities 142 Financial Statement Cycles 146 Setting Audit Objectives 150 Management Assertions 151 Transaction-Related Audit Objectives 154 Balance-Related Audit Objectives 156 Presentation and Disclosure-Related Audit Objectives 159 How Audit Objectives Are Met 159 
Summary 	162 
Essential Terms 162 Review Questions 163 Multiple Choice Questions from CPA Examinations 164 Discussion Questions and Problems 165 Case 169 Internet Problem 6-1: Reasonable Assurance for Reports on Internal Control Over Financial Reporting 170 
7	Audit Evidence 171 Learning Objectives 171 
Nature of Evidence 172
Audit Evidence Decisions 173
Persuasiveness of Evidence 174
Types of Audit Evidence 177
Audit Documentation 185
Summary 194 Essential Terms 195 Review Questions 196 Multiple Choice Questions from CPA Examinations 197 Discussion Questions and Problems 198 Cases 203 ACL Problem 205 Internet Problem 7-1: Use of Audit Software for Fraud Detection and Data Quality Assurance 205 
8	Audit Planning and Analytical Procedures 207 Learning Objectives 207 
Planning 208
Accept Client and Perform Initial Audit Planning 209
Understand the Client's Business and Industry 214
Assess Client Business Risk 218
Perform Preliminary Analytical Procedures 220
Summary of the Parts of Audit Planning 221
Analytical Procedures 223
Five Types of Analytical Procedures 224
Common Financial Ratios 230
Summary 232
Essential Terms 232
Review Questions 232
Multiple Choice Questions from CPA Examinations 234
Discussion Questions and Problems 236
Cases 241
Integrated Case Application; Pinnacle Manufacturing: Part I 243
ACL Problem 246
Internet Problem 8-1: Obtain Client Background Information 246
9	Materiality and Risk 247 Learning Objectives 247 
Materiality 248 Set Preliminary Judgment about Materiality 249 Allocate Preliminary Judgment about Materiality to Segments (Tolerable Misstatement) 252 Estimate Misstatement and Compare with Preliminary Judgment 255 Risk 257 Types of Risks 259 Assessing Acceptable Audit Risk 261 Assessing Inherent Risk 263 Relationship of Risks to Evidence and Factors In-uencing Risks 266 Evaluating Results 271 
Summary 273
Essential Terms 274
Review Questions 275
Multiple Choice Questions from CPA Examinations 276 Discussion Questions and Problems 277 Cases 283 Integrated Case Application; Pinnacle Manufacturing: Part II 287 Internet Problem 9-1: Materiality and Tolerable Misstatement 288 
10	Section 404 Audits of Internal Control and Control Risk 289 Learning Objectives 289 
Internal Control Objectives 290 Management and Auditor Responsibilities for Internal Control 291 COSO Components of Internal Control 294 Obtain and Document Understanding of Internal Control 303 Assess Control Risk 307 Tests of Controls 313 Decide Planned Detection Risk and Design Substantive Tests 315 Section 404 Reporting on Internal Control 316 Evaluating, Reporting, and Testing Internal Control for Nonpublic Companies 318 
Summary 321 Essential Terms 321 Review Questions 324 Multiple Choice Questions from CPA Examinations 326 Discussion Questions and Problems 328 Case 333 Integrated Case Application; Pinnacle Manufacturing: Part III 334 Internet Problem 10-1: Disclosure of Material Weaknesses in Internal Control Over Financial Reporting 335 
11	Fraud Auditing 337 Learning Objectives 337 
Types of Fraud 338 Conditions for Fraud 340 Assessing the Risk of Fraud 343 Corporate Governance Oversight to Reduce Fraud Risks 346 Responding to the Risk of Fraud 351 Speci-c Fraud Risk Areas 353 Responsibilities when Fraud is Suspected 358 
Summary 362
Essential Terms 363
Review Questions 363
Multiple Choice Questions from CPA Examinations 364
Discussion Questions and Problems 365
Case 369
ACL Problem 370
Internet Problem 11-1: Brainstorming About Fraud Risks 370
12	The Impact of Information Technology on the Audit Process 371 Learning Objectives 371 
How Information Technologies Improve Internal Control 372 Assessing Risks of Information Technology 372 Internal Controls Speci-c to Information Technology 374 Impact of Information Technology on the Audit Process 380 Issues for Different IT Environments 387 
Summary 390
Essential Terms 390
Review Questions 392
Multiple Choice Questions from CPA Examinations 392
Discussion Questions and Problems 394
Case 400
ACL Problem 401
Internet Problem 12-1: Assessing IT Governance 402
13	Overall Audit Plan and Audit Program 403 Learning Objectives 403 
Types of Tests 404 Selecting Which Types of Tests to Perform 409 Impact of Information Technology on Audit Testing 412 Evidence Mix 413 Design of the Audit Program 414 
Summary of Key Evidence-Related Terms 424 Summary of the Audit Process 425 Essential Terms 429 Review Questions 429 Multiple Choice Questions from CPA Examinations 431 Discussion Questions and Problems 433 Cases 438 Internet Problem 13-1: Assessing Effects of Evidence Mix 440 
PART 3 Application of the Audit Process to the Sales and Collection Cycle 
Audit of the Sales and Collection Cycle: Tests of Controls and 
14 Substantive Tests of Transactions 443
Learning Objectives 443
Accounts and Classes of Transactions in the Sales and Collection Cycle 444 Business Functions in the Cycle and Related Documents and Records 445 Methodology for Designing Tests of Controls and Substantive Tests of Transactions for Sales 450 Sales Returns and Allowances 460 Methodology for Designing Tests of Controls and Substantive Tests of Transactions for Cash Receipts 461 Audit Tests for the Write-off of Uncollectible Accounts 465 Additional Internal Controls over Account Balances and Presentation and Disclosure 466 Effect of Results of Tests of Controls and Substantive Tests of Transactions 466 
Summary 467 Essential Terms 468 Review Questions 468 Multiple Choice Questions from CPA Examinations 469 Discussion Questions and Problems 471 Case 477 Integrated Case Application; Pinnacle Manufacturing: Part IV 478 ACL Problem 479 Internet Problem 14-1: Point of Sales Systems Controls 479 
15	Audit Sampling for Tests of Controls and Substantive Tests of Transactions 481 Learning Objectives 481 
Representative Samples 482 Statistical Versus Nonstatistical Sampling and Probabilistic Versus Nonprobabilistic Sample Selection 483 Nonprobabilistic Sample Selection Methods 484 Probabilistic Sample Selection Methods 485 Sampling for Exception Rates 488 Application of Nonstatistical Audit Sampling 489 Statistical Audit Sampling 505 Sampling Distribution 505 Application of Attributes Sampling 506 
Summary 512
Essential Terms 512
Review Questions 513
Multiple Choice Questions from CPA Examinations 514
Discussion Questions and Problems 516
Case 520
Integrated Case Application; Pinnacle Manufacturing: Part V 521 Internet Problem 15-1: Sampling for U.S. Census 523 
16 Completing the Tests in the Sales and Collection Cycle: Accounts Receivable 525 Learning Objectives 525 
Methodology for Designing Tests of Details of Balances 526 Designing Tests of Details of Balances 533 Con-rmation of Accounts Receivable 539 Developing Tests of Details Audit Program 545 
Essential Terms 548 Review Questions 549 Multiple Choice Questions from CPA Examinations 550 Discussion Questions and Problems 552 Case 557 Integrated Case Application; Pinnacle Manufacturing: Part VI 558 ACL Problem 560 Internet Problem 16-1: Revenue Recognition 560 
17	Audit Sampling for Tests of Details of Balances 565 Learning Objectives 565 
Comparisons of Audit Sampling for Tests of Details of Balances and for Tests of Controls and Substantive Tests of Transactions 566 Nonstatistical Sampling 567 Monetary Unit Sampling 576 Variables Sampling 586 Illustration Using Difference Estimation 592 
Summary 598 Essential Terms 599 Review Questions 599 Multiple Choice Questions from CPA Examinations 601 Discussion Questions and Problems 602 Cases 606 Internet Problem 17-1: Monetary Unit Sampling Considerations 607 
PART 4 Application of the Audit Process to Other Cycles 
18	Audit of the Payroll and Personnel Cycle 609
Learning Objectives 609
Accounts and Transactions in the Payroll and Personnel Cycle 610 Business Functions in the Cycle and Related Documents and Records 610 Methodology for Designing Tests of Controls and Substantive Tests of Transactions 614 Methodology for Designing Tests of Details of Balances 619 
Summary 623
Essential Terms 624
Review Questions 624
Multiple Choice Questions from CPA Examinations 625
Discussion Questions and Problems 627
Case 631
Internet Problem 18-1: Outsourcing the Payroll Function 632
Audit of the Acquisition and Payment Cycle: Tests of Controls, Substantive Tests 19 of Transactions, and Accounts Payable 633 Learning Objectives 633 
Accounts and Classes of Transactions in the Acquisition and Payment Cycle 634 Business Functions in the Cycle and Related Documents and Records 634 How E-Commerce Affects the Acquisition and Payment Cycle 638 Methodology for Designing Tests of Controls and Substantive Tests of Transactions 639 Methodology for Designing Tests of Details of Balances for Accounts Payable 645 
Summary 653
Essential Terms 654
Review Questions 655 Multiple Choice Questions from CPA Examinations 656 Discussion Questions and Problems 657 Case 664 Internet Problem 19-1: Managing the Accounts Payable Function 666 
Completing the Tests in the Acquisition and Payment Cycle: Veri-cation of 20 Selected Accounts 667 
Learning Objectives 667 
Types of Other Accounts in the Acquisition and Payment Cycle 668 Audit of Property, Plant, and Equipment 668 Audit of Prepaid Expenses 677 Audit of Accrued Liabilities 679 Audit of Income and Expense Accounts 681 
Summary 685
Essential Terms 685
Review Questions 685
Multiple Choice Questions from CPA Examinations 686
Discussion Questions and Problems 688
Cases 691
Internet Problem 20-1: Managing Fixed Assets 693
21	Audit of the Inventory and Warehousing Cycle 695 Learning Objectives 695 
Business Functions in the Cycle and Related Documents and Records 696 How E-Commerce Affects Inventory Management 698 Parts of the Audit of Inventory 699 Audit of Cost Accounting 701 Analytical Procedures 704 Methodology for Designing Tests of Details of Balances 705 Physical Observation of Inventory 706 Audit of Pricing and Compilation 709 Integration of the Tests 713 
Summary 714
Essential Terms 715
Review Questions 715
Multiple Choice Questions from CPA Examinations 716
Discussion Questions and Problems 718
Case 724
Internet Problem 21-1: Using Inventory Count Specialists 725
22	Audit of the Capital Acquisition and Repayment Cycle 727 Learning Objectives 727 
Accounts in the Cycle 728
Notes Payable 730
Owners' Equity 735
Summary 741
Essential Terms 741
Review Questions 741
Multiple Choice Questions from CPA Examinations 743
Discussion Questions and Problems 743
Internet Problem 22-1: Stock Exchange Requirements 748
23	Audit of Cash Balances 749 Learning Objectives 749 
Cash in the Bank and Transaction Cycles 750
Types of Cash Accounts 752
Audit of the General Cash Account 753
Fraud-Oriented Procedures 760
Audit of the Imprest Payroll Bank Account 765
Audit of Imprest Petty Cash 765
Summary 766
Essential Terms 766
Review Questions 767 Multiple Choice Questions from CPA Examinations 768 Discussion Questions and Problems 769 Case 772 Internet Problem 23-1: Automated Clearing House System for Electronic Funds Transfers 774 
Completing the Audit 
Completing the Audit 777 Learning Objectives 777 
Perform Additional Tests for Presentation and Disclosure 778 Review for Contingent Liabilities and Commitments 779 Review for Subsequent Events 784 Final Evidence Accumulation 788 Evaluate Results 791 Issue the Audit Report 796 Communicate with the Audit Committee and Management 796 Subsequent Discovery of Facts 798 
Summary 799 Essential Terms 799 Review Questions 800 Multiple Choice Questions from CPA Examinations 801 Discussion Questions and Problems 803 Case 807 Internet Problem 24-1: Audit Committee Responsibilities 807 
PART 5 
24 
PART 6 
25 
26 
Other Assurance and Nonassurance Services 
Other Assurance Services 809 Learning Objectives 809 
Review and Compilation Services 810 Review of Interim Financial Information for Public Companies 814 Attestation Engagements 815 WebTrust Services 818 SysTrust Services 820 Prospective Financial Statements 820 Agreed-Upon Procedures Engagements 823 Other Audits or Limited Assurance Engagements 823 
Summary 827 Essential Terms 827 Review Questions 828 Multiple Choice Questions from CPA Examinations 828 Discussion Questions and Problems 830 Internet Problem 25-1: Accounting and Review Services Committee 834 
Internal and Governmental Financial Auditing and Operational Auditing 835 Learning Objectives 835 
Internal Financial Auditing 836 Governmental Financial Auditing 839 Operational Auditing 842 
Summary 850 Essential Terms 850 Review Questions 851 Multiple Choice Questions from CPA, IIA, and CMA Examinations 852 Cases 854 Internet Problem 26-1: University Internal Audit Departments 858 
Appendix: ACL Installation and Instructions 859 Index 865 

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