Chapter 6

6-19
a. (1) A misappropriation of assets may exist, and it is more likely to be detected by independent auditors

b. (2) Lends credibility to the financial statements

c. (1) form an opinion on the financial statements

6-20
a. (1) misappropriation of an asset or groups of assets

b. (2) Reasonable, Reasonable, Reasonable

c. (2) An audit is designed to provide reasonable assurance of detecting material errors, but there is no similar responsibility concerning fraud.

6-27
a. “Management assertions are implied or expressed representations by management about classes of transactions and the related accounts and disclosures in the financial statements. Transactions related audit objectives provide a framework to help the auditor accumulate sufficient appropriate evidence.”
b.
a. 3.) Accuracy
b. 4.) classification
c. 3.) accuracy
d. 4.)classification
e. 2.)completeness
f. 5.) cutoff

c. a. 8.) Accuracy b. 8.) accuracy and 9.) posting and summarization c. 7.) completeness d. 10.) classification e. 7.) completeness f. 11.) timing

Chapter 7

7-14

Unusual fluctuations, the auditor must determine the reason and be satisfied that the cause is a valid economic event and not a misstatement. This is usually called attention directing, because there are more detailed descriptions.

7-27
a. (2) Confirmation of an account payable balance mailed by and returned directly to the auditor

b. (1) Physical examination by the auditor.

c. (2) Bank statement obtained from the client

d. (4) Effective internal control provides more assurance about the reliability of audit evidence

7-28
a. (1) to coordinate the audit

b. (4) a record to be used as a basis for the following years engagement

c. (4) Auditing procedures followed and the testing performed in obtaining evidential matter.

d. (1)