• Solutions manual Auditing The Art and Science of Assurance Engagements 15th Canadian Edition, 15e Alvin Arens, Randal Elder Mark Beasley Joanne Jones Solutions Manual


    Auditing The Art and Science of Assurance Engagements 15E Canadian Alvin A. Arens Solutions manual

    Auditing The Art and Science of Assurance Engagements

    ( Solutions manual )

    Auditing The Art and Science of Assurance Engagements 15E Canadian Alvin A. Arens Solutions manual

    Edition:15E Canadian

    Author Name: Alvin A. Arens


    [email protected]

    Whatsapp +1 (949) 734-4773


    for the Facebook page click here 


    for more books  for  ( Test Bank and Solution Manual) click here


    for the test bank click here

    sample free


    Loader Loading...
    EAD Logo Taking too long?

    Reload Reload document
    | Open Open in new tab


    Chapter 1

    The Demand for Audit and Other Assurance Services



    Concept Checks


    C1-1     What is meant by determining the degree of correspondence between information and established criteria? What are the criteria for the audit of a company’s financial statements?


    To do an audit, there must be information in a verifiable form and some standards (criteria) by which the auditor can evaluate the information. Determining the degree of correspondence between information and established criteria is determining whether a given set of information is in accordance with the established criteria. For an audit of a company’s financial statements the criteria are International Financial Reporting Standards, Accounting Standards for Private Enterprises, Accounting Standards for Not-for-Profits.


    C1-2    What are the major causes of information risk. How can information risk be reduced?


    Information risk reflects the possibility that the information upon which the business risk decision was made was inaccurate. The major causes of information risk are: remoteness of information, biases and motives of the provider, voluminous data, and complex exchange transactions. Users can reduce information risk by examining the information directly, sharing the risk with the information preparer, or requesting some assurance over the information (either an audit or a review engagement).


    C1-3    Explain how and why the auditor makes information trustworthy and credible.

    External users value the auditor’s assurance because of the auditor’s integrity, independence, expertise, and knowledge of the subject matter. This makes the information credible and trustworthy.


    C1-4    Describe and explain the differences and similarities between financial statement, compliance, and operational audits.


    Differences—are based upon the information and criteria being audited: a financial statement audit (e.g., historical financial statements) assesses evidence with respect to potential material misstatements; a compliance audit (e.g., compliance with environmental legislation) assesses the organization’s ability to comply with legislation; and an operational audit (e.g., effective factory production) helps to provide good quality control and manage costs.


    Similarities—The auditor is acting with due care, meaning that he/she is following some type of systematic process governed by auditing standards (financial statements: CPA Canada Handbook (GAAS); compliance: CPA Canada Handbook or IIA standards, depending upon whether a public accountant is conducting the audit; and operational: most likely IIA standards). The auditor is also independent and competent (although the degree of independence will vary according to who is conducting the audit).

    C1-5    Describe and explain the difference and similarities among the various types of auditors.


    Auditor Types of Engagements and Employers Type of Training
    Internal Auditor Tend to perform compliance, financial, and operational audits (although can include fraud audits). Work for large for-profit and not-for-profit organizations (e.g., hospitals, universities). Although there is no requirement for a designation, internal auditors often have a CPA or a CIA designation. Internal auditors receive extensive training on how to conduct operational audits.
    Government Auditor Performs value-for-money audits, financial statement audits, and operational audits. Increasing opportunity for experience in operational auditing. Employed by provincial or federal government. Government auditors generally have a CPA designation (if employed by the auditor general), although some have a CIA designation.
    CRA Auditor Performs compliance audits related to personal, corporate, and value-added taxes (GST/HST). Works for the Canada Revenue Agency. Many CRA auditors have a CPA designation (although not required).
    Fraud and forensic auditors Performs forensic and fraud audits. Many forensic accountants and fraud auditors work for public accounting firms (or firms that specialize in forensic accounting services). Some also work in industry, government, and large not-for-profits (as part of internal audit). Many forensic accountants and fraud auditors have a CPA designation (although not required). Some have a CIA designation or one of the fraud specialist designations.
    Public Accountant The main engagements are related to assurance of financial information for a wide range of enterprises and industries – particularly financial statement audits. However, can also perform compliance and operational audits. Opportunity for experience in auditing, tax consulting, and management consulting practices. Public accountants have a CPA designation as well as a public accountant’s license.



    Review Questions


    1-1       You will be looking at his accounting records (evidence) and evaluating and collecting information about those records. Your evaluation process will be done using relatively standard audit procedures (part of GAAS – generally accepted auditing standards). Your objective is to compare the evidence (his accounting records) to the financial statements that he has prepared (which will become information available to others, such as the Canada Revenue Agency). To help you evaluate his records (the evidence) you will use criteria (likely ASPE – Accounting Standards for Private Enterprises). You are able to add value to the financial statements because you are an independent professional, qualified accountant.


    SKU: n/a
WhatsApp chat