Download Ireneo Aud Theory Solution Manual and more Cheat Sheet Auditing in PDF only on Docsity!
By :By : Ireneo, IreIreneo, Ireneo and Jamneo and Jameses
Solutions ManualSolutions Manual
AS!E" #E$ % &'AP(E" 1 :AS!E" #E$ % &'AP(E" 1 : )undamentals o* Assurance Ser+ices)undamentals o* Assurance Ser+ices 111 11 FFAALLSSEE AAssssuurraannccee rreeffeerrss ttoo tthhee practitioner’spractitioner’s satisfaction...satisfaction... 22 TTRRUUEE 33 FFAALLSSEE 44 TTRRUUEE 55 TTRRUUEE 66 FAFALLSESE ThThe re resespoponsnsibibee papartrt! a! an"n" ththe ie intntenen"e"e" u" useser nr neeee" n" notot bbe fe froro# s# sepepararatate oe or$r$anani%i%aatitionons.s. && TTRRUUEE TThhee tteerr## pprraaccttiittiioonneerr iiss broa"erbroa"er in scope co#pare" to the ter# au"itor.in scope co#pare" to the ter# au"itor. '' FFAALLSSEE A pA prrooffeessssiioonnaa a accccoouunnttaannt st shhaa notnot a$ree to perfor# an assurance en$a$e#ent (hich the!a$ree to perfor# an assurance en$a$e#ent (hich the! are not co#petent to carr! out.are not co#petent to carr! out. )) TTRRUUEE 11 FAFALLSESE ThThe ie intntenen"e"e" u" useser #r #a!a! bbe te thehe onone (e (hho eo en$n$aa$e$es ts thehe prprofofesessisiononaa aaccccouountntanant.t. 1111 FAFALSLSEE SeSee ne notote ie in nn nu#u#beber 1r 1.. ThThe ie intntenen"e"e" u" useser ir is ts thehe pepersrsonon oror ccasass os of pf perersosonsns fofor (r (hoho# t# thehe practitioner prepares the report.practitioner prepares the report. 1122 TTRRUUEE 1133 TTRRUUEE 1144 TTRRUUEE 1155 FFAALLSSEE TThhee ccrriitteerriiaa iinn aann FFSS aauu""iitt iiss ++FFRRSS oorr ,,AAAA++.. 1166 FFAALLSSEE AApppprroopprriiaatteenneesss rs reeffeerrs ts too -uait!-uait! (hie sufficienc! refers to (hie sufficienc! refers to -uantit!-uantit!...... 11 && FFAALLSSEE EE//ii""eennccee oobbttaaiinnee"" ""iirreecctt!! bb!! tthhee pprraactctiittiiononeerr iiss #ore#ore reiabe...reiabe... 11 '' FFAALLSSEE TThhee practitionerpractitioner e0presses a concusion that pro/i"es a e/e of assurance...e0presses a concusion that pro/i"es a e/e of assurance... 1)1) FAFALLSESE ThThisis ststaatete##enent "t "esescrcribibeses a "a "irireectct rerepporortitin$n$ asassusurarancnce ee en$n$aa$e$e#e#entnt.. 22 ** TTRRUUEE 2211 FFAALLSSEE AAbbssoouuttee aassssuurraannccee iiss $enera! not$enera! not attainabe...attainabe... 2222 FFAALLSSEE ++AAss ##aa!! ppeerrffoorr## nnoonnaassssuurraannccee eenn$$aa$$ee##eennttss.. 2323 FAFALSLSEE A$A$reree"e"uupoponn prprococe"e"urureses aacc aa (r(ritittetenn asassusurarancncee rerepoportrt oror coconcncuusisionon.. tt isis aa nononn assurance en$a$e#ent.assurance en$a$e#ent. 2424 FAFALLSESE oo#p#piianancece auau"i"itsts araree ccaassssififieie"" aass asassusurarancncee enen$$a$a$e#e#eentnts.s. 2255 TTRRUUEE 121 11 AA 22 33 EEnn$$aa$$ee##eenntt pprroocceessss iiss aann eeee##eenntt aaccccoorr""iinn$$ ttoo tthhee ssuuppeerrssee""ee"" ++SSAA 11 ****.. 44 AA 55 66 && SSuubb 77 eectct ##aatttteer #r #aa! i! innccuu""e fe fiinnaanncciaia o or nr noonnfifinnaanncciiaa i innffoorr##aattiioonn p phh!!ssiicaca c chhaarraaccteterriisstticicss s!ste#s an" processes an" beha/ior.s!ste#s an" processes an" beha/ior. '' AA )) SSuuffffiicciieenncc!! iiss aann aattttrriibbuuttee ooff aauu""iitt ee//ii""eennccee.. 11 ** AA EEffffiicciieenncc!! aann"" eeffffeeccttii//eenneessss ##aa!! iinn//oo//ee ssuubb 77 eeccttii//ee ffaaccttoorrss.. 1111 1212 1133 oo##ppiiaattiioonnss aarree nnoonnaassssuurraannccee eenn$$aa$$ee##eennttss.. 1144 hhooiiccee rreeffeerrss ttoo uussiinneessss RRiiss AAsssseessss##eenntt sseerr//iiccee.. 1515 1616 1&1& AA 1'1' AA 1)1) 22 11
By :By : Ireneo, IreIreneo, Ireneo and Jamneo and Jameses
Solutions ManualSolutions Manual
AS!E" #E$ % &'AP(E" 2 :AS!E" #E$ % &'AP(E" 2 : Audits o* )inancial Statements :Audits o* )inancial Statements : An IntroductionAn Introduction 212 11 TTRRUUEE 22 FFAALLSSEE ......ccoo##ppiiee"" ((iitthh $$eenneerraa!! aacccceeppttee"" accountin$ principesaccountin$ principes or +FRSor +FRS 33 FFAALLSSEE TThhiiss rreeffeerrss ttoo operationa au"itsoperationa au"its .. 44 FAFALLSESE +r+reepapararatitionon ofof fifinnananciciaa ststatate#e#enentsts isis ththee rerespspononsisibibiitit!! ofof ##anana$a$ee#e#entnt.. 55 TTRRUUEE 66 FAFALLSESE AnAn auau"i"it at ai"i"s is in tn thehe coco###u#uninicacatitionon oof ef ecoconono#i#ic "c "aatata bbececauausese iit pt prro/o/i"i"eses rereaasosonanabbee assurance that the financia state#ents are fair! state".assurance that the financia state#ents are fair! state". && FFAALLSSEE TThhe fe fiinnaanncciiaa s statattee##eenntsts rree##aaiin #n #aannaa$$ee##eenntt’’s rs reessppoonnssiibbiiiit!t!.. '' TTRRUUEE )) TTRRUUEE 11 ** TTRRUUEE 1111 FAFALSLSEE ThThe #e #osost ct cososttbebenenefificiciaa opoptitionon toto rere"u"ucece ininfofor#r#atatioion rn risis i is ts to ho ha/a/e te thehe fifinanancnciaia state#ents au"ite".state#ents au"ite". 1212 FAFALLSESE AnAn auau"i"it "t "oeoes ns notot prpro/o/i"i"e ae assssururaancnce re re$e$aar"r"inin$ t$ thehe prpree/e/entntioion on of ff frarau"u".. 1133 TTRRUUEE 1414 FAFALSLSEE ThThe ae au"u"ititoror ofof ththe pe pasast ft fococususe"e" onon "e"etetectctinin$ f$ frarau"u" ( (hihiee ththe ae au"u"ititoror ofof toto"a"a! f! fococususe"e" onon e0pressin$ an opinion on the fairness of financia state#ents.e0pressin$ an opinion on the fairness of financia state#ents. 1155 TTRRUUEE 1166 FFAALLSSEE TThhee rruueess aann"" rree$$uuaattiioonnss aarree sseett bb!! aa hi$her authorit!hi$her authorit! 8such as e$isation9.8such as e$isation9. 1&1& TRTRUEUE :o:otete hoho(e(e/e/err ththatat e0e0teternrnaa auau"i"ititin$n$ #a#a! a! asso ro refeferer toto opopereratatioionana a au"u"itits as an"n" coco#p#piianancece au"its that are perfor#e" b! in"epen"ent au"itors.au"its that are perfor#e" b! in"epen"ent au"itors. 11 '' TTRRUUEE 1)1) FAFALSLSEE nnteternrnaa auau"i"itsts arare ie intntenen"e"e" t" to so serer/e/e ththe ne neeee"s"s ofof #a#anana$e$e#e#entnt n notot toto aiai" t" thehe e0e0teternrnaa au"itor.au"itor. 22 ** FFAALLSSEE TThhe #e #aa 77 oror bbeenneefficiciaiarr! o! of if inntteerrnnaa a auu""iitsts iis #s #aannaa$$ee##eenntt.. 2211 FFAALLSSEE 2222 FFAALLSSEE AAuu""iittiinn$$ rree--uuiirreess tthhaatt ""aattaa sshhoouu"" bbee //eerriiffiiaabbee.. 2233 TTRRUUEE 2244 TTRRUUEE 2525 FAFALSLSEE ThThe #e #aiain "n "ififfefererencnce be betet(e(eenen auau"i"itotorsrs anan" a" accccouountntanants its is ts thehe ababiiitit! t! to $o $atatheher ar an"n" e/e/aauauatete e/i"ence.e/i"ence. 222 11 ee$$rreeee ooff ccoorrrreessppoonn""eennccee bbeett((eeeenn aasssseerrttiioonnss aann"" estabishe" criteriaestabishe" criteria .. 22 33 44 55 TThhiiss rreeffeerrss ttoo tthhee ccoo##ppeetteenneessss aasssseerrttiioonn 66 && '' )) 11 1111 1122 hhoioiccee AA isis ((rroonn$$ bbeeccaauussee iinn""eeppeenn""eenntt aauu""iittinin$$ iiss nnotot aa bbrraanncchh ooff aaccccoouunnttiinn$$.. hhooicicee refers to accountin$.refers to accountin$. hoice is incorrect because au"hoice is incorrect because au"itin$ cannot assure the accurac! ofitin$ cannot assure the accurac! of financia state#ents.financia state#ents. 1313 AA 1144 AA LLiinne fe fuunnctctiioonns as arre pe poossiititioonns ts thhaat et e 00 eerrcciisse "e "eecciissiioonn##aaiinn$$ ppoo((eerrs os or rr reessppoonnssiibbiiiititieess.. 1515 22
By :By : Ireneo, IreIreneo, Ireneo and Jamneo and Jameses
Solutions ManualSolutions Manual
2233 FFAALLSSEE ++eerr##aanneennt et e 00 ee##ppttiioon sn shhaa b be $e $rraannttee" u" uppoon rn reeaachchiinn$ a$ a$$ee 6565 .. 2244 FFAALLSSEE TThhee +R1 1+E 1ounci...+R1 1+E 1ounci... 2525 FAFALSLSEE ++ 6)6)2 h2 hasas aarerea"a"! b! beeeen sn supuperersese"e"e" b" b! R! Repepububiic Ac Actct :o:o. ). )2)2)'' ththe +e +hihiiippppinine Ae Accccouountntananc!c! Act of 24Act of 2 -2- 11 22 33 44 TToo bbee coconnssii""eerree"" aass pprraacctiticicinn$$ ththee pprrooffeessssiioonn tthhee ++AA ##uusstt bbee uussinin$$ hhiiss==hheerr nnoo((ee""$$ee oorr e0pertise in accountin$.e0pertise in accountin$. 55 AA 66 FFuunn""aa##eennttaa p prriinncciippees rs reeffeer tr to eo etthhiiccaa r ree--uuiirree##eenntts ts thhaat #t #uusst bt be ce coo##ppiiee" (" (iitth ih in an a en$a$e#ents of the +A.en$a$e#ents of the +A. n"epen"ence (hie bein$n"epen"ence (hie bein$ an ethica re-uire#ent is notan ethica re-uire#ent is not necessar! in so#e +A ser/ices 8suchnecessar! in so#e +A ser/ices 8such as co#piation of financia state#ents9.as co#piation of financia state#ents9. && '' RReepprreesseennttaattiioon on of cf ciieenntts bs beeffoorre $e $oo//eerrnn##eennt at a$$eenncciiees os on tn taa 00 aann" o" otthheer #r #aatttteerrs #s #uusst bt bee reate"reate" to accountin$.to accountin$. )) AA 11 1111 1212 AA 1133 ;;uusstt nnoott hhaa//ee aann!! ppeeccuunniiaarr!! iinntteerreesstt "irect or in"irect"irect or in"irect...... 1414 1515 1616 1&1& 1'1' AA 1)1) ToeranceToerance of /ioations of the +hiippine Accountanc! Act is a $roun" for suspension orof /ioations of the +hiippine Accountanc! Act is a $roun" for suspension or re#o/a of a #e#ber of the >A.re#o/a of a #e#ber of the >A. 22 2121 2222 2323 2424 2525 2266 AA ::aattuurraaii%%ee"" FFiiiippiinnoo cciittii%%eennss ##aa!! ttaaee tthhee ++AA ooaarr"" EE 00 aa##ss.. 2&2& 2'2' 2)2) AA 33 3131 3232 AA 3333 44
By :By : Ireneo, IreIreneo, Ireneo and Jamneo and Jameses
Solutions ManualSolutions Manual
AS!E" #E$ %AS!E" #E$ % &'AP(E" /&'AP(E" / :: Setting p and MaintainingSetting p and Maintaining An Accounting PracticeAn Accounting Practice
11 TTRRUUEE
22 FFAALLSSEE AAt t eeaasst 't '* u* unniitts bs b! 2! 2** 11 & i& innccrreeaassiinn$ $$ $rraa""uuaa! t! to 1o 1 22 * u* unniittss 33 FAFALLSESE ThThee cocorprpororatatee fofor#r# isis nonot at aoo(e(e"" fforor ththee prpracactiticece ofof ppububiicc acaccocoununtatancnc!.!. 44 FFAALLSSEE TThhiiss ##eetthhoo"" ooff bbiiiinn$$ rreeffeerrss ttoo ppeerr ""iiee## bbaassiiss.. 55 TTRURUEE :o:otete hoho(e(e//erer ththaat tt thihis is is ns notot ththe #e #aainin "e"eteter#r#ininanant ot of tf thehe a#a#ouountnt oof pf prorofefessssioionana f feeees.s. SeSeee reate" -uestion nu#ber 6.reate" -uestion nu#ber 6. 66 TTRRUUEE && FFAALLSSEE TThhiiss iiss aa ccoonnttiinn$$eenntt ffeeee aarrrraann$$ee##eenntt.. '' FFAALLSSEE ::oott aann!!##oorree rree--uuiirree"" ppeerr >>AA RReessoouuttiioonn ::oo.. 55 )) )) FFAALLSSEE TThhiiss rreeffeerrss ttoo ssooiicciittaattiioonn.. 11 ** FFAALLSSEE ......sshhaa bbee //aaii"" ffoorr aa ppeerriioo"" ooff three !earsthree !ears...... 1111 FFAALLSSEE @@ 33 ** ""aa!!ss ffrroo## ""aattee ooff ssuucchh ""eeaatthh 1122 FFAALLSSEE @@aaoo((ee"" ssuubb 77 eecctt ttoo cceerrttaaiinn ccoonn""iittiioonnss 1133 TTRRUUEE 1414 FAFALLSESE @t@theherere isis nono susuchch coconn"i"ititionon foforr rere/o/ocacatitionon ofof pparartntneer’r’ss iicecensnsee 1155 FFAALLSSEE @+@+RR ++E E oouunnccii c caan "n "eeee$$aatete ththe (e (oorr t to +o +++A A ++E E oouunnccii 1616 FAFALSLSEE @n@notot i#i##e#e"i"iatatee!.!. ThThreree !e !eaearsrs ofof #e#eananinin$f$fuu e0e0peperirienencece shshaa bebe eaearnrne"e" fifirsrst bt b!! ththe e +A+A 1&1& FAFALSLSEE @i@it’t’s ths the cee certrtifificicatate oe of ref re$i$iststraratitionon ththat iat is $rs $ranantete" on" on! o! oncnce. e. erertitifificacate ote of Af Accccrere"i"itatatition ion iss /ai" for three !ears./ai" for three !ears. 11 '' TTRRUUEE 11 )) FFAALLSSEE @@ffiirrsstt nnaa##ee iiss aaoo((ee"" 22 ** TTRRUUEE TThheessee aarree aatteerrnnaattii//ee ##eetthhoo""ss ooff eeaarrnniinn$$ ++ u unniittss.. /2/ 11 22 33 44 55 66 && '' )) AA 11 1111 1212 1313 1414 1515 1616 1&1& AA 1'1' 1)1) 22 55
By :By : Ireneo, IreIreneo, Ireneo and Jamneo and Jameses
Solutions ManualSolutions Manual
AS!E" #E$ %AS!E" #E$ % &'AP(E" 3&'AP(E" 3 :: (.e &ode o* E(.e &ode o* Et.ics *or &PAs int.ics *or &PAs in t.e P.ilippinest.e P.ilippines
11 FFAALLSSEE
22 TTRRUUEE
33 FFAALLSSEE TThhee aauu""iittoorr sshhoouu"" aass tthhee cciieenntt ttoo ccoorrrreecctt tthhee eerrrroorr.. 44 FFAALLSSEE AA ++AA ##aa!! notnot /ountari!.../ountari!... 55 TTRRUUEE 66 TTRRUUEE && FFAALLSSEE AA fa#iiarit! threatfa#iiarit! threat...... '' TTRRUUEE )) FFAALLSSEE AA pprrooffeessssiioonnaa aaccccoouunnttaanntt iinn ppuubbiicc pprraaccttiiccee ((ii or"inari! nee"or"inari! nee" ...... 11 ** FFAALLSSEE A pA prrooffeessssiioonnaa a accccoouunnttaannt it in pn puubbiic pc prraaccttiicce #e #aa!! notnot rea"i!...rea"i!... 1111 TTRRUUEE 1212 FAFALSLSEE :e:et(t(oror f firir#s#s arare ae asso ro re-e-uiuirere" t" to bo be ie in"n"epepenen"e"entnt ofof a fa fininananciciaa ststatate#e#enent at au"u"itit ccieientnt.. 1133 TTRRUUEE 1414 FAFALLSESE >n>n!! ee$i$ititi##atatee aai#i#ss #u#ustst bebe fufurtrtheherere"" aan"n" susupppporortete"" b!b! ththee ++A.A. 1155 FFAALLSSEE ++AAs cs caannnnoot pt prroo//ii""e ae assssuurraanncce oe of if innffaaiibbiiiitt!!.. 1616 FAFALSLSEE ThThe fie firsrst ret re#e#e"! i"! is tos to apappp! th! the pe pooicicieies of ts of the ohe or$r$anani%i%atatioion on on ren resosouutition oon of ef eththicica ca cononfficict.t. 1&1& FAFALSLSEE >b>b7e7ectcti/i/itit! i! is "s "ififfefererentnt frfro#o# ststububbobornrnnenessss.. >b>b7e7ectcti/i/itit! s! si#i#pp! r! refeferers ts to bo beiein$n$ neneututrara o orr unbiase".unbiase". 11 '' TTRRUUEE 11 )) FFAALLSSEE SSeeee ccoo####eennttss iinn nnuu##bbeerr 1144 22 FAFALSLSEE ;a;a! b! be ae ao(o(e"e" onon!! ifif ththe ne nececesessasar!r! sasafefe$u$uarar"s"s arare ie in pn paacece 8t8to reo re"u"ucece oror eei#i#ininatate te thrhreaeatsts to co#piance (ith fun"a#enta principes9.to co#piance (ith fun"a#enta principes9. 323 11 AA 22 AA 33 44 55 66 && '' )) 11 1111 AA 1122 AA sseecconon"" rree##ee""!! (o(ouu"" bbee ttoo eenn$$aa$$ee tthhee sseerr//iicceess ooff ee 00 ppeerrttss.. nn tthhee aabbsseennccee ofof rree##ee""iieess the +A has no choice but to "ecine the en$a$e#ent.the +A has no choice but to "ecine the en$a$e#ent. 1313 1414 1515 AA 1616 1&1& 1'1' 1)1) 22 2211 oonnttiinn$$eennt ft feeees rs reessuutt tto so sii$$nniiffiiccaannt tt thhrreeaatsts tto co coo##ppiiaanncce (e (iithth ffuunn""aa##eennttaa p prriinncciippees (s (hheenn ao(e" for assurance en$a$e#ents.ao(e" for assurance en$a$e#ents. 2222 2233 AA ::ootteeBB AAssssuu##ee ththaatt ththee ++AAss hhaa//ee nnoott eesstatabbiisshhee"" tthhee nneececessssaarr!! ssaaffee$$uuaarr""ss toto rree""uucece threats to co#piance (ith fun"a#enta principes.threats to co#piance (ith fun"a#enta principes. &&
By :By : Ireneo, IreIreneo, Ireneo and Jamneo and Jameses
Solutions ManualSolutions Manual
2244 CCiitthh""rraa((aa ooff ffeeeess ffrroo## cciieenntt’’ss ##oonniieess rree--uuiirree cciieenntt aapppprroo//aa.. 2255 AA TThheerre #e #aa! b! be te tii##ees (s (hheen tn thhe ae aii##s os of tf thhe pe prrooffeessssiioon an ann" t" thhe ee e##ppoo!!eer ar arre ie in cn coonnffiicctt.. 2626 2&2& AA 2'2' 2)2) AA 33 3311 eeaarr $$uuii""eeiinneess ffoorr ##ee##bbeerrss ooff tthhee au"itau"it personne on issues of securit! an" confi"entiait!.personne on issues of securit! an" confi"entiait!. 3232 3333 oorrrreeccttiioonnBB TThhee cchhooiicceess sshhoouu"" bbee nnuu##bbeerrss nnoott eetttteerrss.. 3434 3535 &'AP(E" 7 :&'AP(E" 7 : (.e )inancial(.e )inancial Statements Audit ProcessStatements Audit Process 71 :71 : (rue or(rue or )alse)alse 11 FAFALLSESE +r+rofofesessisiononaa coco#p#petetenencece anan" "" "ueue cacarere isis obobttaiainene" t" thrhrouou$h$h a ca co#o#bibinanatitionon ofof e"e"ucucatatioionn an"an" e0perience.e0perience. t cannot bet cannot be obtaine" throu$h e"ucationobtaine" throu$h e"ucation aone.aone. 22 TTRRUUEE 33 FAFALSLSEE ;a;ateteririaaitit! i! is os onene ofof ththe #e #a7a7oror fafactctorors cs cononsisi"e"erere" i" inn "e"eteter#r#inininin$ t$ traransnsacactitionons ts thahat (t (ouou"" bebe re/ie(e".re/ie(e". 44 FAFALSLSEE RiRiss ofof #a#ateteririaa #i#isssstatatete#e#entnt isis $r$reaeateter (r (hehen tn traransnsacactitionons as an"n" babaaancnceses inin/o/o//e"e" esestiti#a#atetess 55 TTRRUUEE 66 TTRRUUEE && TTRRUUEE '' TTRRUUEE )) TTRRUUEE 11 FAFALSLSEE ThThe se sucuccecessssor aor au"u"ititoror hahas ts thehe "u"ut!t! toto ininititiaiate cte co#o##u#uninicacatitionon (i(ith tth thehe prpre"e"ececesessosor ar au"u"ititoror since the atter is boun" b! tsince the atter is boun" b! t he "ut! of confi"entiait!.he "ut! of confi"entiait!. 1111 TTRRUUEE 1212 FAFALSLSEE ThThe pe priri#a#ar!r! obob7e7ectcti/i/e oe of tf thehe ststu"u"! a! an"n" e/e/aauauatitionon ofof ininteternrnaa cocontntroro i is ts to "o "eteterer#i#inene ththee nature e0tent an" ti#in$ of substanti/e tests to be perfor#e".nature e0tent an" ti#in$ of substanti/e tests to be perfor#e". 1133 TTRRUUEE 1144 TTRRUUEE 1155 TTRRUUEE 7272 :: MultipleMultiple &.oice&.oice 11 AA ++eeaassee cchhaann$$ee cchhooiiccee AA ttoo FairnessFairness an" reiabiit! of accountin$ "ata.an" reiabiit! of accountin$ "ata. 22 33 44 AA 55 AA 66 && AA '' )) 11 AA 1111 1212 1313 1414 ''
By :By : Ireneo, IreIreneo, Ireneo and Jamneo and Jameses
Solutions ManualSolutions Manual
ob7ecti/es.ob7ecti/es. >b7ecti/es are the>b7ecti/es are the o/era panso/era pans for the entit!.for the entit!. 22 ** TTRRUUEE 2211 TTRRUUEE 2222 TTRRUUEE 2233 TTRRUUEE 2244 TTRRUUEE 2255 TTRRUUEE 4242 :: MultipleMultiple &.oice&.oice 11 22 33 AA 44 55 AA 66 && AA RReepprreesseennttaattiioon n eetttteerrs as arre ce coonnssii""eerree" a" at at auu""iit ct coo##ppeettiioonn.. '' AA TThhee ##oosstt ccoosstt!! pprrooccee""uurree iiss tteesstt ooff bbaaaanncceess.. )) 11 1111 1212 AA 1133 TThhiis is is as arreeaa""! a! a ffuurrtthheer ar auu""iit pt prrooccee""uurre 8e 8ppeerrffoorr##ee" a" afftteer pr paannnniinn$$ 99 .. 1414 1155 ::oottee tthhaatt tthhee cciieenntt uunn""eerr ccoonnssii""eerraattiioonn iiss aa continuin$continuin$ au"it cient.au"it cient. 1166 oo##ppaarrisisoonn ooff aactctuuaa reressuutsts //eersrsuuss bbuu""$$eettee"" ffii$$uurreess isis nnoo(n(n aass //aarriiaanncece aannaa!!ssiiss.. 1&1& 1'1' 1)1) 22 2211 ++SSAA 5555 ** ccoo//eerrss reate" parties.reate" parties. Reate" parties areReate" parties are in"icate" b!in"icate" b! transactions (hich ha/etransactions (hich ha/e abnor#a ter#s of tra"e.abnor#a ter#s of tra"e. 2222 2323 AA 2424 AA 2255 ieiennt #t #aannaa$$ee##eenntt isis ee 00 ppeeccttee"" toto hhaa//e ae a ""eeeeppeer ur unn""eerrsstatann""iinn$ o$ of tf thhe ee ennttiit!t!’’s os oppeerraatitioonnss.. The au"itor is e0pecte" to obtain an un"erstan"in$ of tThe au"itor is e0pecte" to obtain an un"erstan"in$ of t he entit! sufficient for hi#=her tohe entit! sufficient for hi#=her to perfor# the au"it effecti/e! but notperfor# the au"it effecti/e! but not so #uch as to be co#parabe to the e/e oso #uch as to be co#parabe to the e/e o ff operationa no(e"$e possesse" b! #ana$e#ent.operationa no(e"$e possesse" b! #ana$e#ent. 2266 TThhiiss pprrooccee""uurree iiss aa substanti/e testsubstanti/e test.. 2&2& 2'2' AA 22 )) ;;oosstt bbuussiinneessss rriissss ""oo hhaa//ee ffiinnaanncciiaa ccoonnssee--uueenncceess.. 33 11
By :By : Ireneo, IreIreneo, Ireneo and Jamneo and Jameses
Solutions ManualSolutions Manual
&'AP(E"&'AP(E" 55 :: StudyStudy andand E+aluationE+aluation oo InternalInternal &ontrol&ontrol 5151 :: (rue(rue oror )alse)alse 11 FAFALLSESE >b>btatainin unun"e"ersrstatann"i"in$n$ ofof iintnterernana c conontrtroos rs reeaatete" t" to fo fininananciciaa s statatete#e#entnts as au"u"itit 22 FAFALLSESE nnteternrnaa cocontntroro " "ooes nes not aot a""""reressss aa b bususininesess rs risiss 8s 8onon!! ththosose re risiss (s (hhicich hh haa/e/e bbeeeenn i"entifie" b! #ana$e#ent9.i"entifie" b! #ana$e#ent9. 33 FAFALLSESE tt isis ththe ae au"u"ititoror’s’s sesecocon"n"arar! c! cononsisi"e"eraratitionon toto prpro/o/i"i"e ce cononsstrtrucuctiti/e/e susu$$$$eeststiiononss.. 44 FFAALLSSEE SS##aaeerr eennttiittiieess uussee ess for#aess for#a #eans an" si#per processes.#eans an" si#per processes. 55 TTRRUUEE 66 TTRRUUEE && TTRRUUEE '' FAFALSLSEE RiRiss asassesessss#e#entnt isis ththe ie i"e"entntifificicatatioion an an"n" ananaa!s!sisis ofof rereee/a/antnt ririsss ts too acachihie/e/e#e#enentt ofof ththee ob7ecti/es for#in$ a basis for "eter#inin$ ho( the riss shou" be #ana$e".ob7ecti/es for#in$ a basis for "eter#inin$ ho( the riss shou" be #ana$e". )) TTRRUUEE 11 ** TTRRUUEE 1111 FAFALLSESE oontntroro a acctiti/i/ititiees #s #aa! a! asso bo be ae appppiie"e" inin a ca coo#p#pututereri%i%ee" e" en/n/irironon#e#ennt.t. 1122 TTRRUUEE 1133 TTRRUUEE 1414 TRTRUEUE :o:otete hoho(e(e/e/err ththatat #o#oninitotoririn$n$ isis #a#ainin!! peperfrforor#e#e"" foforr ththee pupurprpososee ofof "e"eteter#r#inininin$$ ththee a"e-uac! an" effecti/eness of interna contros.a"e-uac! an" effecti/eness of interna contros. 1155 TTRRUUEE 1166 FFAALLSSEE ::oot at a ccoonnttrroos as arre re reeee//aannt tt too tthhee aauu""iitt.. 11 && TTRRUUEE 1'1' FAFALSLSEE >b>btatainininin$ a$ an un un"n"ererststanan"i"in$n$ ofof ininteternrnaa cocontntroross inin/o/o//eses e/e/aauauatitin$n$ ththe "e "esesi$i$n an an"n" i#pe#entation 8or operation9i#pe#entation 8or operation9 of contros.of contros. 1)1) FAFALSLSEE A (A (eaeannesess ins in ininteternrnaa cocontntroro t thahat ct couou"" haha/e/e a #a #atatereriaia e effffecect ont on ththe fe fininananciciaa ststatate#e#enentsts is no(n as a #ateriais no(n as a #ateria (ea3ness in interna contro(ea3ness in interna contro .. 22 ** TTRRUUEE 2121 FAFALLSESE ff cconontrtrooss araree nonott efeffefectcti/i/ee cconontrtroo ririss isis asasssesessese"" atat ??,?,?.. 2222 TTRRUUEE 2233 TTRRUUEE 2424 FAFALSLSEE FuFurtrtheherr auau"i"itt prprococe"e"urureses ininccu"u"ee teteststss ofof cocontntroross anan"" susubsbstatantnti/i/ee teteststs os onn!.!. 2255 TTRRUUEE 2626 FAFALSLSEE TeTeststs ofs of cocontntroross arare pe pererfofor#r#e"e" onon!! (h(henen ththe pe prereii#i#inanar! cr! conontrtroo ririss asassesessss#e#ent int is ?s ?,,?.?. 22 && TTRRUUEE 2'2' FAFALSLSEE AsAssesessss#e#entnt ofof cocontntroro r risis isis susub7b7ecect tt too popossssibibee rere/i/isisionon inin ii$h$ht ot of sf sububsese-u-uenentt "e/eop#ents "urin$ the au"it."e/eop#ents "urin$ the au"it. 22 )) TTRRUUEE 33 FAFALSLSEE LaLacc ofof sese$r$re$e$atatioion on of "f "ututieies is is ns notot anan ininhehererentnt ii#i#itatatitionon ofof ininteternrnaa cocontntroro.. 5252 :: MultipleMultiple &.oice&.oice 11 AA 22 hhooiiccee AA iiss iinnccoorrrreecctt bbeeccaauussee tthhee aauu""iittoorr ##uusstt ssttii oobbttaaiinn aann uunn""eerrssttaann""iinn$$ ooff tthhee accountin$ s!ste# an" contro proce"ures ofaccountin$ s!ste# an" contro proce"ures of an entit!.an entit!. hoice is incorrect becausehoice is incorrect because contro proce"ures 8ree/ant to the aucontro proce"ures 8ree/ant to the au"it9 aso re-uire the au"it9 aso re-uire the au"itor’s consi"eration."itor’s consi"eration. hoice hoice is incorrect because not a controis incorrect because not a contro proce"ures are consi"ere" b! the au"itor 8on! those proce"ures are consi"ere" b! the au"itor 8on! those ree/ant to the au"it9.ree/ant to the au"it9. 33 44 55 TThhee iinntteerrnnaa ccoonnttrroo ss!!ssttee## oof af a ccoo##ppaann!! iiss bbrrooaa""eerr iinn ssccooppee ccoo##ppaarree"" ttoo tthhee aaccccoouunnttiinn$$ 1111
By :By : Ireneo, IreIreneo, Ireneo and Jamneo and Jameses
Solutions ManualSolutions Manual
&'AP(E"&'AP(E" 1010 :: Su6stanti+eSu6stanti+e (esting(esting andand ocumentationocumentation 101101 :: (rue(rue oror )alse)alse 11 FFAALLSSEE 22 FAFALSLSEE AuAu"i"it et e/i/i"e"encnce ie incncuu"e"es os onn!! ththe ie infnforor#a#atitionon ususe"e" b!b! ththee auau"i"itotor ar as as a babasisis fs foror hihis os opipininionon.. 33 TTRRUUEE 44 TTRRUUEE 55 FFAALLSSEE AAccccoouunnttiinn$$ rreeccoorr""ss oonn tthheeiirr oo((nn ""oo notnot constitute sufficient appropriate au"it e/i"ence.constitute sufficient appropriate au"it e/i"ence. 66 FFAALLSSEE TThhee hhii$$hheerr tthhee - -uuaaiitt!! ooff aauu""iitt ee//ii""eennccee tthhee essess e/i"ence is re-uire".e/i"ence is re-uire". && FFAALLSSEE >b>bttaaiinninin$$ aauu""iit et e//ii""eenncece rreeaattinin$$ tto ao a ppaarrtticicuuaar ar asssseerrttiionon iiss notnot a substitute for obtainin$a substitute for obtainin$ au"it e/i"ence re$ar"in$ another assertion.au"it e/i"ence re$ar"in$ another assertion. '' TTRRUUEE )) TTRRUUEE 11 ** TTRRUUEE 1111 FFAALLSSEE TThhiiss ssttaattee##eenntt rreeffeerrss ttoo substanti/e testssubstanti/e tests.. 1122 TTRRUUEE 1313 FAFALSLSEE nn-u-uirir! i! is cs cononsisi"e"erere" a" as is insnsufuffificicienent ut unnesess cs cororroroboboraratete" b" b! e! e/i/i"e"encnce fe froro# o# oththerer auau"i"itt proce"ures.proce"ures. 1144 FFAALLSSEE TThhee hhii$$hheerr tthhee aasssseessss##eenntt ooff rriiss tthhee moremore reiabe is the au"it e/i"ence sou$ht b! thereiabe is the au"it e/i"ence sou$ht b! the au"itor fro# substanti/e proce"ures.au"itor fro# substanti/e proce"ures. 1155 TTRRUUEE 1616 FAFALLSESE SuSubsbstatantnti/i/ee teteststss aarere nene/e/err eeii#i#inanatete"" inin anan auau"i"itt enen$a$a$e$e#e#entnt.. 1&1& FAFALSLSEE AuAu"i"it obt ob7e7ectcti/i/es ees eststababiish bsh broroa" $a" $enenerera $a $oaoass (h (hiie aue au"i"it prt prococe"e"urures ses spepecicif! tf! the "he "etetaiaiee"" (or to be perfor#e".(or to be perfor#e". 1'1' FAFALSLSEE AnAnaa!t!ticicaa prprococe"e"urures aes arere rere-u-uirire"e" asas a pa paannnninin$ p$ prorocece"u"urere anan" a c" a co#o#ppetetioion pn prorocece"u"urere b butut not as a substanti/e test.not as a substanti/e test. 11 )) TTRRUUEE 22 FAFALLSESE TeTeststs os of "f "etetaaiis cs caan bn be ue usse"e" fofor /r /ererifif!i!in$n$ e0e0isistetencncee anan"" /a/auuatatioion.n. 2121 FAFALSLSEE CoCorrinin$$ papapepersrs "o"o nonot st serer/e/e asas aa susubsbstititututete foforr ththee ccieientnt’s’s fifinanancnciaia r rececoror"s"s.. 2222 TTRRUUEE 2233 FFAALLSSEE CCoorriinn$$ ppaappeerrss sshhoouu"" notnot be ept in the cient’s pre#ises.be ept in the cient’s pre#ises. 2424 FAFALSLSEE CoCorrinin$ p$ papaperers (s (hihichch cocontntaiain in infnforor#a#atitionon rereaatitin$n$ prpri#i#ararii! t! to tho the ae au"u"it oit of a sf a sinin$$e pe pererioio"" are no(n as current fies.are no(n as current fies. 2255 FFAALLSSEE TThhee primaryprimary purpose of in"e0in$ is topurpose of in"e0in$ is to increase efficienc!increase efficienc! in the rechecin$ an" re/ie( ofin the rechecin$ an" re/ie( of (or perfor#e".(or perfor#e". 121 11 AA &orrection:&orrection: hoice Ahoice A shou" rea"Bshou" rea"B DThe infor#ationDThe infor#ation obtaine" b!obtaine" b! thethe au"itorau"itor...... 22 33 44 SSoo##ee aauu""iitt pprrooccee""uurreess aa""""rreessss tt((oo oorr ##oorree aauu""iitt oobb 77 eeccttii//eess.. 55 SSeeee nnootteess iinn 11 11 nnuu##bbeerr && 66 && '' )) TThhee - -uueessttiioonn ""ee##aann""ss ffoorr ee 00 aa##ppeess ooff assetsassets (hich are(hich are inspecte".inspecte". hoice A ishoice A is inco#pete.inco#pete. hoice incu"es cancee" checs an" saes "ocu#entshoice incu"es cancee" checs an" saes "ocu#ents 8both of (hich are not assets9.8both of (hich are not assets9. hoice incu"es cancee" checs 8a$ain not an asset9.hoice incu"es cancee" checs 8a$ain not an asset9. 11 1111 1212 1313 1313
By :By : Ireneo, IreIreneo, Ireneo and Jamneo and Jameses
Solutions ManualSolutions Manual
1166 SSaa##ppiinn$$ aaffffeeccttss tthhee ssuuffffiicciieenncc!! ooff aauu""iitt ee//ii""eennccee.. 1&1& 1'1' AA 11 )) AA TThhe "e "iiffffiicucut!t! aann"" ee 00 ppeennsse ie inn//oo//ee" i" inn tetesstitinn$ a$ a ppaarrtiticucuaar ir itete# i# is ns noot at a //aaii" b" baassiis fs foor ar ann au"itor to "eci"e to o#it a test.au"itor to "eci"e to o#it a test. 22 ** TThhee hhii$$hheerr tthhee aauu""iittoorr’’ss aasssseessss##eennttss ooff iinnhheerreenntt aann"" ccoonnttrroo rriissss tthhee #ore#ore reiabe an"reiabe an" ree/ant is the au"it e/i"ence sou$ht b! the au"itor.ree/ant is the au"it e/i"ence sou$ht b! the au"itor. 2121 2222 hhooiiccee iiss iinnccoorrrreecctt bbeeccaauussee ssuubbssttaannttii//ee tteessttss aarree in/erse! reate"in/erse! reate" to the au"itor’s reianceto the au"itor’s reiance on interna contros.on interna contros. 2323 2424 2525 2626 AA 2&2& 2'2' AA 2)2) 33 ** hhooiicceess AA aann"" ( (aarrrraannt tt thhee uussee ooff ppoossiittii//ee ccoonnffiirr##aattiioonn rree--uueessttss.. 3131 AA 3232 3333 3344 AA ccoopp!! ooff tthhee e0ternae0terna au"itor’s au"it pro$ra# shou" be incu"e" in the (orin$ papers.au"itor’s au"it pro$ra# shou" be incu"e" in the (orin$ papers. 3535 3636 AA 3&3& 3'3' 3)3) 44 &'AP(E" 11 % Basic Audit Sampling &oncepts&'AP(E" 11 % Basic Audit Sampling &oncepts 111 :111 : (rue or(rue or )alse)alse 11 FFAALLSSEE 22 TTRURUEE TeTeststs ps pererfofor#r#ee" o" on 1n 1**** o of tf thehe itite#e#s (s (itithihin an a popopupuaatitionon "o"oeses nonot ct cononststititutute se saa#p#piinn$.$. 33 TTRRUUEE 44 TTRRUUEE 55 TTRRUUEE 66 TTRRUUEE && TTRRUUEE '' TTRRUUEE )) TTRRUUEE 11 ** TTRRUUEE 1111 FFAALLSSEE TThhe e aarr$$eer tr thhe te tooeerraabbe ee errrroror t thhe se s##aaeer tr thhe se saa##ppe se sii%%ee 1122 FFAALLSSEE nn tests of controstests of contros the toerabe the toerabe "e/iation rate"e/iation rate is the #a0i#u#is the #a0i#u#...... 1133 TTRRUUEE 1144 TTRRUUEE 1155 FFAALLSSEE TThhiiss ssttaattee##eenntt rreeffeerrss ttoo ran"o# seectionran"o# seection .. 1616 FAFALSLSEE StStraratitifificacatition #on #a! ba! be ae apppproroprpriaiate tte to ao assssisist in tt in the ehe efffficicieient ant an"n" efeffefectcti/i/e "ee "eisis$n o$n of thf the sae sa#p#pee.. 11 && FFAALLSSEE TThhee rriiss ooff oo//eerrrreeiaiannccee aann"" tthhee rrisis ooff iinnccororrreecctt acceptanceacceptance...... 1414
By :By : Ireneo, IreIreneo, Ireneo and Jamneo and Jameses
Solutions ManualSolutions Manual
3&3& AA
33 '' AA 44 == 11 **** GG 44 ssaa##ppee ""ee//iaiattiionon rraatete HH 22 aao(o(aannccee fforor ssaa##ppiinn$$ rrisis GG 66 uuppppeerr ""ee//iiaattioionn rate /ersus toerabe "e/iation rate of 5rate /ersus toerabe "e/iation rate of 5 3)3) 44 4141 4242 4343 4444 TTooeerraabbee ##iissssttaattee##eenntt iiss iinn//eerrssee!! rreeaattee"" ttoo ssaa##ppee ssii%%ee 4545 4646 4&4& AA 44 '' ::ootte te thhaat tt thhe se saa##ppe "e "ee//iiaattiionon rraatte 8e 8iinn tetesstts os of cf coonntrtrooss9 n9 neeee"" nnoot bt bee pprroo 77 eectctee""I oI onn! t! thhee sa#pe #isstate#ent 8in substanti/e tests9 nee" to be pro7ecte" to the popuation.sa#pe #isstate#ent 8in substanti/e tests9 nee" to be pro7ecte" to the popuation. 4)4) 55 AA 5151 5252 5353 &'AP(E"&'AP(E" 1212 :: &ompleting&ompleting t.et.e AuditAudit 121121 :: (rue(rue oror )ales)ales 11 TTRRUUEE 22 TTRRUUEE 33 FFAALLSSEE AA pprroo//iissiioonn iiss nnoott uunncceerrttaaiinn aass ttoo ee 00 iisstteennccee.. 44 TTRRUUEE 55 FAFALLSESE :o:ott aa susubsbse-e-ueuentnt e/e/enentsts nenee"e" a"a"7u7ustst#e#entntII soso#e#e rere-u-uiriree "i"iscscoosusurere onon!!.. 66 FFAALLSSEE && TTRRUUEE '' FFAALLSSEE TThhee ppeerriioo"" ooff aasssseessss##eenntt iiss at eastat east 12 #onths fro# the reportin$ "ate.12 #onths fro# the reportin$ "ate. )) TTRRUUEE 11 FAFALLSESE ThThe ae au"u"ititoror inin ththisis cacasese shshouou"" isissusue a -e a -uauaiififie"e" oror ""isisccaiai#e#er or of of opipinnioion.n. 1111 FAFALSLSEE ChChenen ototheher sr sufuffificicienent at apppproroprpriaiatete e/e/i"i"enencece cacan bn be re reaeasosonanabb! e! e0p0pecectete" t" to eo e0i0istst s sucuchh e/i"ence is obtaine" rather than si#p! $ettin$ (rittene/i"ence is obtaine" rather than si#p! $ettin$ (ritten representations fro# #ana$e#ent.representations fro# #ana$e#ent. 1122 TTRURUEE ++SSA 5A 5''* r* ree--uuirirees (s (rriitttteen #n #aannaa$$ee##eennt rt reepprreesseennttaattiioon n eettteterrss.. 1133 TTRRUUEE 1144 TTRRUUEE 1515 FAFALSLSEE FFo(o(chcharartsts ofof ininteternrnaa cocontntroro "o"o nonot ct cononststititutute ae a fofor#r# ofof ininteternrnaa coco####ununicicatatioion.n. 122122 :: MultipleMultiple &.oice&.oice 11 AA 22 33 AA 44 55 AA SSuubbssee--uueenntt ee//eennttss ththaatt ppeerrtataiinn ttoo ccoonn""iittioionnss tthhaatt ""ii"" nnoott ee 00 iisstt aass ooff bbaaaanncece sshheeeett ""aattee aarree nor#a! "iscose".nor#a! "iscose". 66 && AA '' TThhiiss aaccccoo##ppiisshheess nnoo ppuurrppoossee rreeaattee"" ttoo ssuubbssee--uueenntt ee//eennttss.. 1616
By :By : Ireneo, IreIreneo, Ireneo and Jamneo and Jameses
Solutions ManualSolutions Manual
1122 hhooiciceess AA a ann"" iinn//oo//ee iinncrcreeaassiinn$$ ee 00 ppeenn""iituturrees (s (hhiichch ccouou"" aa$$$$rraa//aatete ththee aarreeaa""!! precarious con"ition of ?i o.precarious con"ition of ?i o. 1133 AA ::oonnccoo##ppiiaannccee (i(ithth tteerr##ss ooff ""eebbtt aa$$rreeee##eennttss nnoorr##aa!! rraaisisee aa ""oouubbtsts aabboouutt $$ooiinn$$ concern.concern. 1414 1515 1616 1&1& AA 1'1' 11 )) SSeeee ccoo####eennttss uunn""eerr 1122 11 nnuu##bbeerr 1111 22 2211 AA TThhee ##ininuutteess ooff ##eeeetitinn$$ss ##uusstt aa bbee ##aa""ee aa//aaiiaabbee ttoo ththee aauu""iitotorr.. ;;aateterriiaaiit!t! iiss nnoott appicabe here J a #inutes #ust be pro/i"e" to the au"itor.appicabe here J a #inutes #ust be pro/i"e" to the au"itor. 2222 2323 2424 2525 2626 AA 2&2& 2'2' 2)2) 33 ** ReReaatete" p" paarrtitiees ss soo##eetti#i#ees as accccoouunnt ft foor tr thheeiir tr trraannssaactctiionons is in an a ((aa! t! thhaat st suubbsstatanncece ""iiffffeerrss fro# the for#.fro# the for#. 3131 3232 AA 3333 AA 3434
&'AP(E"&'AP(E" 1-1- :: (.e(.e AuditAudit "eport"eport
1-1 :1-1 : ("E("E or )A8SEor )A8SE 11 TTRRUUEE 22 FAFALLSESE ThThisis sisitutuaatitionon reresusutts ts to a "o a "isisa$a$reree#e#enent (t (iithth #a#anana$e$e#e#enntt nnotot a a i#i#ititaatitionon oon sn scocopepe.. 33 FFAALLSSEE 44 TTRRUUEE 55 FAFALLSESE ThThisis sisitutuaatitionon (o(ouu" r" re-e-uiuirere ththe ue usese ofof a -a -uuaaififieie" o" or ar a"/"/erersese opopiininionon " "epepeen"n"inin$ o$ onn #ateriait!.#ateriait!. 66 FAFALSLSEE ThThe ae au"u"ititoror isis rerespspononsisibbe ie in "n "etetecectitin$n$ #a#ateteririaa #i#isssstatatete#e#entnts as aririsisin$n$ frfro#o# eieiththerer anan ererroror or orr frau".frau". && FAFALSLSEE ff ththee auau"i"itotorr cacann nonot rt reeieie"" onon ththee bebe$i$innnninin$ i$ in/n/enentotor!r! ththee $r$rososss prprofofitit aasoso cacann nonott bebe reie" upon hence resuts of operations can not be reie" upon but the baance sheet (ithreie" upon hence resuts of operations can not be reie" upon but the baance sheet (ith the correct baance of en"in$ in/entor! can be reie" uponthe correct baance of en"in$ in/entor! can be reie" upon '' FAFALLSESE E#E#phphasasisis ofof a #a #atatteter pr pararaa$r$rapaphshs araree aa(a(a!s!s ppaacece" b" befeforore ae a #o#o""ififieie"" opopininiionon.. )) TTRRUUEE 11 ** TTRRUUEE 1111 FFAALLSSEE 1122 TTRRUUEE 1133 TTRRUUEE 1144 TTRRUUEE 1&1&
By :By : Ireneo, IreIreneo, Ireneo and Jamneo and Jameses
Solutions ManualSolutions Manual
4343 AA
&'AP(E" 1/ :&'AP(E" 1/ : Special &onsiderations and AudSpecial &onsiderations and Audits o* Summary )inancial Statemits o* Summary )inancial Statementsents
1/1 :1/1 : (rue or(rue or )alse)alse 11 TTRRUUEE 22 FFAALLSSEE TThhee rree--uuiirree##eennttss ooff ++SSAA ''**** sshhaa pprree//aaii.. 33 TTRRUUEE 44 FAFALLSESE ThThe se spepeciciaa rerepoportrt onon #o#o"i"ififie"e" cacashsh bbasasisis ststaatete#e#entnts ns neeee"s"s toto inin""icicatate te thehe bbasasisis ooff accountin$ use".accountin$ use". 55 FAFALLSESE AuAu"i"it ot of cf co#o#poponenennts rts resesuuts its in a rn a reepoport ort on a pn a parartiticucuaar pr parart oft of ththe fe fininananciciaa s statatete##enentsts.. 66 FFAALLSSEE AAuu""iitt ooff ccoo##ppoonneennttss rreessuutt ttoo aa #ore e0tensi/e#ore e0tensi/e e0a#ination of that co#ponent.e0a#ination of that co#ponent. && FAFALSLSEE ChChenen anan a"a"/e/ersrsee opopininioionn oror "i"iscscaai#i#erer ofof opopininioionn onon ththee enentitirere fifinanancnciaia ststatate#e#enentsts hahass been e0presse" the au"itor shou" report on co#ponents obeen e0presse" the au"itor shou" report on co#ponents o f the financia state#ents on! iff the financia state#ents on! if those co#ponentsthose co#ponents are not so e0tensi/eare not so e0tensi/e ........ '' TTRRUUEE )) TTRRUUEE 11 ** TTRRUUEE 1/21/2 :: MultipleMultiple &.oice&.oice 11 AA 22 33 44 f sf sttaattee##eenntts as arre pe prreeppaarree" u" ussiinn$ t$ thhe ae accccrruuaa b baassiiss t thhee ssttaann""aarr"" aauu""iit rt reeppoorrt at appppiieess.. 55 66 && '' )) AA 11 1111 AA 1212 1313 1414 AA 1515 1616 1&1& 11 '' SSppeecciiaa r reeppoorrtsts oon cn coo##ppiiaanncce (e (itith ch coonntrtraacctutuaa a a$$rreeee##eenntsts aarre se sttii a auu""iit rt reeppoorrtstsI hI heennccee the! re-uire in"epen"ence.the! re-uire in"epen"ence. 1)1) 22 2121 2222 2323 2424 AA 2525 2626 2&2& 1)1)
By :By : Ireneo, IreIreneo, Ireneo and Jamneo and Jameses
Solutions ManualSolutions Manual
3434 AA
3636 AA
&'AP(E"&'AP(E" 11 :: onAudit AonAudit Assurance Engagessurance Engagements andments and "elated S"elated Ser+iceser+ices
11 :11 : (rue or(rue or )alse)alse 11 FFAALLSSEE ReRe//iiee(( ooff iinntteerrii## ffiinnaanncciiaa ssttaattee##eennttss aarree bbaassee"" oonn ++SSRREEss.. 22 FFAALLSSEE AAuu""iittss aarree nnoott ppaarrtt ooff rreeaattee"" sseerr//iicceess.. 33 TTRRUUEE 44 TTRRUUEE 55 TTRRUUEE 66 FFAALLSSEE RRee//iiee( s( seerr//iiccees rs ree--uuiirre ae auu""iittoor ir inn""eeppeenn""eennccee.. && TTRRUUEE '' FAFALSLSEE oonfnfirir#a#atitionon anan" /" /ererifificicatatioion on of sf si$i$ninifificacantnt acaccocoununt bt baaananceces as arere papartrt ofof auau"i"itsts n notot rere/i/ie(e(s.s. )) TTRRUUEE 11 ** FFAALLSSEE AA ++AA ##aa!! notnot pro/i"e assurance as to the achie/abiit! of a forecast.pro/i"e assurance as to the achie/abiit! of a forecast. 1111 TTRRUUEE 1212 FAFALLSESE A$A$reree"e"uupponon prprococee"u"ureres es enn$a$a$e$e#e#entnts "s "o no noot rt re-e-uuirire ie in"n"epepeen"n"enencece.. 1212 :: MultipleMultiple &.oice&.oice 11 AA 22 33 44 55 hhooiiccee iiss ppaarrtt ooff aa ssttaann""aarr"" aauu""iitt eenn$$aa$$ee##eenntt.. 66 AA && == '' AA )) 11 AA 1111 1212 AA 1313 1414 1515 1616 1&1& AA 1'1' 22
