Auditing And Assurance Services A Systematic Approach 5th Edition William Messier, Steven Glover, Douglas Prawitt - Solutions

Discover comprehensive resources for "Auditing and Assurance Services: A Systematic Approach, 5th Edition" by William Messier, Steven Glover, and Douglas Prawitt. Access the complete answers key and solutions manual online, including a solutions PDF featuring step-by-step answers. Our platform offers solved problems, chapter solutions, and a detailed test bank, ensuring you have all the tools necessary to excel. Whether you're seeking the instructor manual or textbook, our solutions are designed for easy understanding. Enjoy the convenience of free download and enhance your learning experience with structured questions and answers.

Know how to assess control risk and conduct substantive audit procedures for income statement accounts. Lop85
Know how to conduct substantive audit procedures for retained earnings. Lop85
Know how to conduct substantive audit procedures for dividends. Lop85
Know how to conduct substantive audit procedures for capital stock. Lop85
Know the appropriate segregation of duties for stockholders' equity. Lop85
Identify key control activities for stockholders' equity. Lop85
Know how to conduct substantive audit procedures for long-term debt. [] Understand the types of stockholders' equity transactions. [e] Assess control risk for stockholders' equity. Lop85
Identify key control activities for long-term debt. Lop85
Understand the types and features of long-term debt. Assess control risk for long-term debt. Lop85
Visit the SEC's Web site (www.sec.gov) and identify a company that has been recently cited for problems related to property, plant, and equip- ment or lease accounting (e.g., many retail companies had to recently re- state earnings to comply with the SEC's clarification of lease accounting).
On January 15, 2006, Leno, Inc., which has a March 31 year-end, entered into a transaction to sell the land and building that contained its manu- facturing operations for a total selling price of $19,750,000. The book value of the land and the building was $3,420,000. The final closing was not
Pierce, an independent auditor, was engaged to examine the financial statements of Wong Construction, Inc., for the year ended December 31, 2006. Wong's financial statements reflect a substantial amount of mobile construction equipment used in the firm's operations. The equipment is accounted for
To support financial statement assertions, an auditor develops specific substantive procedures to satisfy or address each assertion. Required: Items (a) through (c) represent assertions for the property and equipment accounts. Select the most appropriate audit procedure from the following list and
Gonzales, CPA, is the auditor for a manufacturing company with a bal- ance sheet that includes the entry "Property, plant, and equipment." Gonzales has been asked by the company's management if audit adjust- ments or reclassifications are required for the following material items that have been
Nakamura, CPA, has accepted an engagement to audit the financial state- ments of Grant Manufacturing Company, a new client. Grant has an adequate control environment and a reasonable segregation of duties. Nakamura is about to set the control risk for the assertions related to Grant's property and
Natherson, CPA, is engaged to audit the financial statements of Lewis Lumber for the year ended December 31, 2006. Natherson obtained and documented an understanding of internal control relating to the purchasing process and set control risk at the maximum level. Natherson requested and obtained
An auditor analyzes repairs and maintenance accounts primarily to ob- tain evidence in support of the assertion that alla. Noncapitalizable expenditures for repairs and maintenance have been properly charged to expense.b. Expenditures for property and equipment have not been charged to expense.c.
Which of the following situations would not support the auditor's decision to reduce control risk below maximum for the audit of intangible assets?a. The client employs a qualified specialist who reviews the value of the intangible assets on an annual basis for impairment. p-654
Property acquisitions that are misclassified as maintenance expense would most likely be detected by an internal control system that provides fora. Investigation of variances within a formal budgeting system.b. Review and approval of the monthly depreciation entry by the plant supervisor.c.
A weakness in control over recording retirement of equipment may cause an auditor toa. Trace additions to the "other assets" account to search for equipment that is still on hand but no longer being used.b. Select certain items of equipment from the accounting records and locate them in the
Which of the following internal controls is most likely to justify a reduc- tion of control risk concerning plant and equipment acquisitions?a. Periodic physical inspection of plant and equipment by the internal audit staff.b. Comparison of current-year plant and equipment account balances with
What procedures would an auditor use to verify the completeness, rights and obligations, and valuation assertions for property, plant, and equipment? p-654
Identify three substantive analytical procedures that can be used to audit property, plant, and equipment. p-654
What is the key segregation of duties for the property management process? What errors or fraud can occur if such segregation of duties is not present? p-654
What is a typical control over authorization of capital asset transactions? p-654
Describe three factors that the auditor should consider in assessing the inherent risk for (a) intangible assets and (b) the property management process. p-654
List four categories of intangible assets and four types of property, plant, and equipment transactions. p-654
Confirmation is a useful audit procedure for verifying information related to prepaid insurance. What type of information would be requested from an entity's insurance broker? p-654
Identify two substantive analytical procedures that can be used to audit prepaid insurance.. p-654
How does the purchasing process affect prepaid insurance and property, plant, and equipment transactions? p-654
Prepaid expenses are generally assessed to have a low inherent risk. Why would deferred charges and intangible assets present serious inherent risk consideration? p-654
Distinguish between prepaid expenses, deferred charges, and intangible assets. Give two examples of each of these "other assets." p-654
Evaluate the audit findings and reach a final conclusion on property, plant, and equipment. p-654
Identify tests of details of account balances and dis- closures used to audit property, plant, and equipment. p-654
Identify substantive analytical procedures used to audit property, plant, and equipment. p-654
Know the appropriate segregation of duties for property, plant, and equipment. p-654
Assess control risk for property, plant, and equipment. p-654
Identify and evaluate inherent risks for property, plant, and equipment. p-654
Identify the types of transactions in the property management process. p-654
Develop an understanding of the property management process. p-654
Understand the auditor's approach to auditing prepaid insurance and intangible assets. p-654
Identify the various types of prepaid expenses, deferred charges, and intangible assets. p-654
Visit the SEC's Web site (www.sec.gov) and identify a company that has been recently cited for financial reporting problems related to inventory. Prepare a memo summarizing the inventory issues for the company. P-963
Using an Internet browser, search for information on inventory turnover and merchandise liquidations in the retail catalog industry. P-963
The following discussion case extends Discussion Case 6-31 in Chapter 6. Harris decided that the easiest way to make the Fabricator Division appear more profitable was through manipulating the inventory, which was the largest asset on the books. Harris found that by increasing inventory by 2
In obtaining evidential matter in support of financial statement assertions, the auditor develops specific audit procedures to address those assertions. Required: Your client is Hillmart, a retail department store that purchases all goods directly from wholesalers or manufacturers. Select the most
An auditor is examining the financial statements of a wholesale cosmet- ics distributor with an inventory consisting of thousands of individual items. The distributor keeps its inventory in its own distribution center and in two public warehouses. An electronic inventory file is maintained on a
Kachelmeier, CPA, is auditing the financial statements of Big Z Wholesaling, Inc., a continuing audit client, for the year ended January 31, 2006. On January 5, 2006, Kachelmeier observed the tagging and counting of Big Z's physical inventory and made appropriate test counts. These test counts have
Abbott Corporation does not conduct a complete annual physical count of purchased parts and supplies in its principal warehouse but instead uses statistical sampling to estimate the year-end inventory. Abbott main- tains a perpetual inventory record of parts and supplies and believes that
Rasch is the partner-in-charge of the audit of Bonner Distributing Corpo- ration, a wholesaler that owns one warehouse containing 80 percent of its inventory. Rasch is reviewing the working papers that were prepared to support the firm's opinion on Bonner's financial statements, and Rasch wants to
Yardley, CPA, prepared the flowchart on the following page, which por- trays the raw materials purchasing function of one of Yardley's clients, a medium-size manufacturing company, from the preparation of initial documents through the vouching of invoices for payment. The flowchart represents a
Which of the following audit procedures would probably provide the most reliable evidence concerning the entity's assertion of rights and obligations related to inventory?a. Tracing of test counts noted during the entity's physical count to the entity's summarization of quantities. P-963
An auditor using audit software would probably be least interested in which of the following fields in an electronic perpetual inventory file?a. Economic re-order quantity.b. Warehouse location.c. Date of last purchase.d. Quantity sold. P-963
Periodic or cycle counts of selected inventory items are made at various times during the year rather than via a single inventory count at year-end. Which of the following is necessary if the auditor plans to observe inven- tory at interim dates?a. Complete recounts are performed by independent
Inquiries of warehouse personnel concerning possibly obsolete or slow- moving inventory items provide assurance about management's asser- tion ofa. Completeness.b. Existence.c. Presentation.d. Valuation. P-963
When auditing merchandise inventory at year-end, the auditor performs a purchase cutoff test to obtain evidence thata. All goods purchased before year-end are received before the physical inventory count.b. No goods held on consignment for customers are included in the inventory balance.c. Goods
After accounting for a sequence of inventory tags, an auditor traces a sample of tags to the physical inventory listing to obtain evidence that all itemsa. Included in the listing have been counted.b. Represented by inventory tags are included in the listing.c. Included in the listing are
A client maintains perpetual inventory records in both quantities and dollars. If the level of control risk were set at high, an auditor would probablya. Insist that the client perform physical counts of inventory items several times during the year.b. Apply gross profit tests to ascertain the
Which of the following internal control activities is most likely to address the completeness assertion for inventory?a. The work-in-process account is periodically reconciled with subsidiary records.b. Employees responsible for custody of finished goods do not perform the receiving function. P-963
An auditor's tests of controls over the issuance of raw materials to pro- duction would most likely includea. Reconciliation of raw materials and work-in-process perpetual inven- tory records to general ledger balances.b. Inquiry of the custodian about the procedures followed when defective
Independent internal verification of inventory occurs when employees whoa. Issue raw materials obtain materials requisitions for each issue and prepare daily totals of materials issued.b. Compare records of goods on hand with physical quantities do not maintain the records or have custody of the
Which of the following would most likely be an internal control activity designed to detect errors and fraud concerning the custody of inventory?a. Periodic reconciliation of work in process with job cost sheets.b. Segregation of functions between general accounting and cost accounting.c.
Which of the following control activities would be most likely to assist in reducing the control risk related to the occurrence of manufacturing transactions?a. Perpetual inventory records are independently compared with goods on hand.b. Forms used for direct materials requisitions are prenumbered
The objectives of internal control for an inventory management process are to provide assurance that transactions are properly executed and recorded and thata. Independent internal verification of activity reports is established.b. Transfers to the finished goods department are documented by a com-
List five items for inventory and related accounts that may require disclosure. P-963
What are some possible causes of book-to-physical inventory differences? P-963
List the procedures the auditor should perform during the count of the client's physical inventory. P-963
Describe how an auditor audits standard costs. P-963
List three substantive analytical procedures that can test the fairness of inventory and related accounts. P-963
What control activities can a client use to prevent unauthorized inventory production? P-963
List the major steps in setting control risk in the inventory management process. P-963
List the inherent risk factors that affect the inventory management process. P-963
List the key segregation of duties in the inventory management process. What errors or fraud can occur if such segregation of duties is not present? P-963
What duties are performed within the inventory management, stores, and cost-accounting functions? P-963
Briefly describe each of the following documents or records: production schedule, materials requisition, inventory master file, production data information, and cost accumulation and variance reports. P-963
How does the inventory management process relate to the revenue, pur- chasing, and payroll processes? P-963
Why does inventory represent one of the more complex parts of the audit? P-963
Evaluate the audit findings and reach a final conclusion on inventory and related accounts. P-963
Identify tests of details of account balances used to audit inventory and related accounts. P-963
Identify tests of details of transactions used to audit inventory and related accounts. P-963
Know how to observe physical inventory. P-963
Know how to audit standard costs. P-963
Identify substantive analytical procedures used to audit inventory and related accounts. P-963
Relate the assessment of control risk to substantive procedures. P-963
Identify key internal controls and develop relevant tests of controls for inventory transactions. P-963
Assess control risk for the inventory system. P-963
Identify and evaluate inherent risks relevant to the inventory management process. P-963
Know the appropriate segregation of duties for the inventory management process. P-963
Understand the functions in the inventory management process. P-963
Identify and describe the types of documents and records used in the inventory management process. P-963
Develop an understanding of the inventory management process. P-963
Baker, CPA, was engaged to audit Mill Company's financial statements for the year ended September 30. After studying Mill's internal control, Baker decided to obtain evidence about the effectiveness of both the design and the operation of the controls that may support a low assessed level of con-
Doug Iceberge, senior-in-charge of the audit of Fisher Industries, has de- cided to test the following two controls for Fisher's revenue process. 1. All sales invoices are supported by proper documentation, that is, a sales order and a shipping document. 2. All sales invoices are mathematically
Nathan Matthews conducted a test of controls where the tolerable devia- tion rate was set at 5 percent and the expected population deviation rate was 3 percent. Using a sample size of 150, Matthews performed the planned test of controls. He found six deviations in the sample, and he cal- culated
Calgari Clothing Company manufactures high-quality silk ties that are marketed under a number of trademarked names. Joe & Vandervelte have been the company's auditors for five years. Lisa Austen, the senior-in- charge of the audit, has reviewed Calgari's controls over purchasing and inventory, and
Using the sample sizes determined in Problem 8-27-.-and the number of de- viations shown here, determine the sample deviation rate, computed upper deviation rate, and the auditor's decision for each control procedure. lop85
Using the sample sizes determined in Problem 8-25-.-and the number of deviations shown here, determine the sample deviation rate, the computed upper deviation rate, and the auditor's decision for each control procedure. lop85
Determine the sample size for each of the control procedures shown in the following table (assuming a large population): lop85
Jenny Jacobs, CPA, is planning to use attribute sampling in order to deter- mine the degree of reliance to be placed on an audit client's system of internal control over sales. Jacobs has begun to develop an outline of the main steps in the sampling plan as follows: 1. State the test objectives
Following is a set of situations that may or may not involve sampling. 1. An auditor is examining loan receivables at a local bank. The population of loans contains two strata. One stratum is composed of 25 loans that are each greater than $1 million. The second stratum contains 450 loans that are

Showing 1 - 100 of 2824

1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
Last

Auditing And Assurance Services A Systematic Approach 5th Edition William Messier, Steven Glover, Douglas Prawitt - Solutions

Step by Step Answers