Auditing An International Approach 7th edition Wally J. Smieliauskas, Kathryn Bewley - Solutions

Identify various authoritative supports for GAAP, with an indication of their ranking.
Why does the timing of an auditor’s appointment matter in the conduct of a financial statement audit?
Locate Nortel’s audit committee report on the Internet. Is the OSC or the SEC website more user-friendly for investors?
What are the three major areas of public accounting services?
Identify several types of professional accountants and their organizations.
What are the overall objectives of a financial statement audit?
Why are professional accountants required to comply with GAAP and GAAS?
Explain the mechanism by which financial statement audits serve as an instrument of financial regulation.
What are five situations that can threaten an auditor’s independence? Explain each situation in terms of the three-party accountability model.
How does independence in fact differ from independence in appearance? Why, and to whom, does the distinction matter?
For what types of work does a professional accountant require independence?
Describe the five essential components of a professional ethics code for accountants.
What distinguishes public accounting from other types of work professional accountants might perform, such as bookkeeping, financial statement preparation, or tax return preparation?
How is the accounting profession in Canada regulated?
1. Do you think that the auditor’s primary responsibility should be to detect deceptive reporting (e.g., earnings manipulation by management)? Yes or no? Discuss in class.2. What is information risk? List reasons it is important to society to reduce this risk.3. Name and describe three theories
Identify a report on a major investigation of the Auditor General of Canada in 2012 that led to a major embarrassment for the federal government. How extensively was this reported in the media? Identify the three-party accountability in these engagements. Do you think that the media reports reflect
Give several examples of misstatements that contribute to audit risk. Give several examples of misstatements that contribute to accounting risk. How can you distinguish between the two types of misstatements? Discuss in class.
The primary objective of compliance auditing is toa. Give an opinion on financial statements.b. Develop a basis for a report on internal control.c. Perform a study of effective and efficient use of resources.d. Determine whether auditee personnel are following laws, rules, regulations, and policies.
Independent auditors of financial statements perform audits that reduce and controla. The business risks faced by investors.b. The information risk faced by investors.c. The complexity of financial statements.d. Quality reviews performed by other public accounting firms.
Operational audits of a company’s efficiency and economy of managing projects and of the results of programs are conducted by whom?a. Financial statement auditorsb. The company’s internal auditorsc. Tax auditors employed by the federal governmentd. Fraud auditors
Bankers who are processing loan applications from companies seeking large loans will probably ask for financial statements audited by an independent PA becausea. Financial statements are too complex for them to analyze themselves.b. They are too far away from company headquarters to perform
According to CPA Canada, the objective of an audit of financial statements isa. An expression of opinion on the fairness with which they present financial position, results of operations, and cash flows in conformity with GAAP.b. An expression of opinion on the fairness with which they present
Company A hired Sampson & Delila, CPAs, to audit the financial statements of Company B and deliver the audit report to Megabank. Which is the client?a. Megabankb. Sampson & Delila c. Company Ad. Company B
When people speak of the assurance function, they are referring to the work of auditors ina. Lending credibility to a client’s financial statements.b. Detecting fraud and embezzlement in a company.c. Lending credibility to an auditee’s financial statements.d. Performing a program-results audit

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