Solutions Manual All Chapter

Auditing + Assurance A Business Risk Approach, 3e Christine Jubb (Solutions Manual All Chapter)

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Copyright © 2012 Cengage Learning Australia Pty Limited

Part I: Understanding Auditor Responsibilities

Chapter 1

Assurance and Auditing: Integral to the Economy

Learning Objectives:

By studying this chapter, students should be able to:

• Define the concepts of assurance, including review engagements, and auditing.

• Describe the special role of audits, which provide reasonable assurance, in

meeting the demands of society for true and fair financial reporting and the role of reviews, which provide limited assurance.

• Describe how the public accounting profession has changed this decade, the

influences that have caused those changes and how those changes affect the nature of the audit and review processes.

• Distinguish the differences among assurance services including review services

and audit services and describe the role of internal control in financial reporting integrity.

• Describe the requirements for professionals entering the public accounting

profession generally and the assurance profession more specifically where professional judgement and scepticism is vital for a quality product.

• Describe the unique roles of internal, external and public sector assurance

providers in improving the reliability of information and the processes that lead to the recording and presentation of information (both financial and operational).

• Identify the important professional and regulatory bodies that affect the nature

and quality of audit and assurance services as well as the scope of services provided.

Teaching Suggestions

The public and management of organisations rely on various services provided by public accounting firms, internal audit departments, and others in the ‘assurance’ business. This chapter explores the growing importance of assurance in our society, describes how auditing fits within the assurance framework, and discusses the requirements to become an auditor. Attention is given to the various types of assurance, the services public accountants provide, and the professional and regulatory organisations that impact them. 2 / 4

Assurance and Auditing: A business risk approach 3e

Instructor’s Manual Chapter 1: Assurance and Auditing: Integral to the Economy 2 Copyright © 2012 Cengage Learning Australia Pty Limited

Most accounting students do not fully comprehend what assurance or auditing entails nor will they have read Chapter 1 before the first class period. Accordingly, much of the first class period should be devoted to broadly defining assurance. A suggestion is to create discussion around examples of assurance outside the accounting context – such as the suitability of computer software developed to simulate flight or textbooks written for introductory calculus classes to illustrate the concept. From this broad perspective, students can be led into areas more familiar to accountants: financial auditing, performance auditing, and compliance auditing as performed by public accountants, internal auditors, and governmental auditors. Throughout the discussion, stress the need of the free enterprise system for a free flow of reliable information. Spend a few minutes summarising the major changes that have come about in the wake of the Corporate Law Economic Reform Program (Audit Reform and Corporate Disclosure) Act (2004) CLERP

• Act and explain the need for restored confidence in the accounting profession.

Once students are familiar with attestation in a broad sense, narrow the discussion to independent financial auditing, which is the subject matter for most of this course.Students often find that an overview of the audit process helps to put the various topics covered in the text into perspective. Conclude by discussing the standard audit and review reports and how the reports serve as a communication mechanism with the user of external financial statements; briefly explain reviews and compilations and how these differ from an audit. 3 / 4

Assurance and Auditing: A business risk approach 3e

Instructor’s Manual Chapter 1: Assurance and Auditing: Integral to the Economy 3 Copyright © 2012 Cengage Learning Australia Pty Limited

Suggested Homework Problems

Learning Objectives Review Questions Multiple-Choice Questions Discussion and Research Questions Research and Internet Questions Cases LO 1 Pp 8-12

1-2, 1-5,

1-10, 1-11

1-27, 1-28, 1-29,

1-30, 1-36, 1-38,

1-43 LO 2 Pp 12-16

1-1, 1-3,

1-6, 1-8,

1-11, 1-14 1, 2,

1-26, 1-27, 1-28,

1-29, 1-30, 1-31,

1-36, 1-38,

1-42 1-43, 1-44 LO 3 Pp16-21 1-12, 1-13 5, 8 1-36, 1-42 1-42 1-43 LO 4 Pp21-23 1-7, 1-9 3, 4, 8

1-27, 1-28, 1-29,

1-32, 1-36

LO 5 Pp23-24

1-4, 1-14,

1-15, 1-16

1-33, 1-35

LO 6 Pp25-27

1-17, 1-18,

1-24 6

1-28, 1-33, 1-35

1-36, 1-37

1-43 LO 7 Pp 27-32

1-19, 1-20,

1-21, 1-22,

1-23, 1-25 7, 8, 9, 10, 11

1-29, 1-34, 1-36,

1-39, 1-40, 1-41 1-43

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