DeVry Chicago ACCT 212, Summer 2014 Explain the relationships among audit services, attestation services, and ……

| November 24, 2016

Chapter 1

Explain the relationships among audit services, attestation services, and assurance services, and give examples of each.

Discuss the major factors in today’s society that have made the need for independent audits much greater than it was 50 years ago.

Distinguish among the following three risks: risk-free interest rate, business risk, and information risk. Which one or ones does the auditor reduce by performing an audit?

Identify the major causes of information risk and identify the three main ways information risk can be reduced. What are the advantages and disadvantages of each?

Explain what is meant by determining the degree of correspondence between information and established criteria. What are the information and established criteria for the audit of Jones Company’s tax return by an internal revenue agent? What are they for the audit of Jones Company’s financial statements by a CPA firm?

Describe the nature of the evidence the internal revenue agent will use in the audit of Jones Company’s tax return

What knowledge does the auditor need about the client’s business in an audit of historical financial statements? Explain how this knowledge may be useful in performing other assurance or consulting services for the client.

What are the major differences in the scope of the audit responsibilities for CPAs, GAO auditors, IRS agents, and internal auditors?

Explain why CPAs need to be knowledgeable about information technology, including e-commerce technologies.

Multiple Choice

Which of the following best describes why an independent auditor is asked to express an opinion on the fair presentation of financial statements?

Independent auditing can best be described as:

Which of the following professional services is an attestation engagement?

Which of the following attributes is likely to be unique to the audit work of CPAs as compared to the work performed by practitioners of other professions?

Operational audits generally have been conducted by internal auditors and governmental audit agencies but may be performed by certified public accountants. A primary purpose of an operational audit is to provide;

In comparison to the external auditor, an internal auditor is more likely to be concerned with:

Which of the following best describes the operational audit?

Compliance auditing often extends beyond audits leading to the expression of opinions on the fairness of financial presentation and includes audits of efficiency, economy, effectiveness, as well as:

Read and explain the following:

a. In what ways are the services provided by Consumers Union similar to assurance services provided by CPA firms?

b. Compare the concept of information risk introduced in this chapter with the information risk problem faced by a buyer of an automobile.

c. Compare the four causes of information risk faced by users of financial statements as discussed in this chapter with those faced by a buyer of an automobile.

d. Compare the three ways users of financial statements can reduce information risk with those available to a buyer of an automobile.

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