Chapter 1: The Demand for audit and assurance Services Ob jectives After studying this chapter, you should be able to: 1. Describe assurance services and distinguish audit services from other assurance and nonassurance services provided by 2. Explain the importance of auditing in reducing information 3. List the causes of information risk, and explain how this risk may be reduced Describe auditing 5. Distinguish between auditing and accounting 6. Differentiate the three main types of audits 7. Identify the primary types of auditors 8. Describe the requirements for becoming a cpa Chapter 2: The CPA Profession Objectives After studying this chapter, you should be able to 1. Describe the nature of CPa firms, what they do, and their structure 2. Describe the key functions performed by the aicpa 3. Use generally accepted auditing standards as a basis for further study. 4. Identify quality control standards and practices within the accounting profession. 5. Summarize the role of the Securities and Exchange Commission in accounting and auditing Chapter 3: Audit Reports Objectives After studying this chapter, you should be able to
Chapter 1: The Demand for Audit and Assurance Services Objectives After studying this chapter, you should be able to: 1. Describe assurance services and distinguish audit services from other assurance and nonassurance services provided by CPAs. 2. Explain the importance of auditing in reducing information risk. 3. List the causes of information risk, and explain how this risk may be reduced. 4. Describe auditing. 5. Distinguish between auditing and accounting. 6. Differentiate the three main types of audits. 7. Identify the primary types of auditors. 8. Describe the requirements for becoming a CPA. Chapter 2: The CPA Profession Objectives After studying this chapter, you should be able to: 1. Describe the nature of CPA firms, what they do, and their structure. 2. Describe the key functions performed by the AICPA. 3. Use generally accepted auditing standards as a basis for further study. 4. Identify quality control standards and practices within the accounting profession. 5. Summarize the role of the Securities and Exchange Commission in accounting and auditing. Chapter 3: Audit Reports Objectives After studying this chapter, you should be able to:
1. Describe the parts of the standard unqualified audit report. 2. Specify the conditions required to issue the standard unqualified audit report. 3. Describe the five circumstances when an unqualified report with an explanatory paragraph or modified wording is appropriate 4. Identify the types of audit reports that can be issued when an unqualified opinion is not justified 5. Explain how materiality affects audit reporting decisions 6. Draft appropriately modified audit reports under a variety of circumstances 7. Determine the appropriate audit report for a given audit situation Chapter 4: Professional ethics Objectives After studying this chapter, you should be able to 1. Distinguish ethical from unethical behavior in personal and professional contexts. 2. Resolve ethical dilemmas using an ethical framework. 3. Explain the importance of ethical conduct for the accounting profession 4. Describe the purpose and content of the aicpa code of Professional conduct 5. Apply the AICPa Code rules and interpretations on independence and explain their importance 6. Understand the requirements of other rules under the aicpa 7. Describe the enforcement mechanisms for the rules of conduct Chapter 5: Legal liability Ob ject After studying this chapter, you should be able to Understand the litigious environment in which CPAs practice
1. Describe the parts of the standard unqualified audit report. 2. Specify the conditions required to issue the standard unqualified audit report. 3. Describe the five circumstances when an unqualified report with an explanatory paragraph or modified wording is appropriate. 4. Identify the types of audit reports that can be issued when an unqualified opinion is not justified. 5. Explain how materiality affects audit reporting decisions. 6. Draft appropriately modified audit reports under a variety of circumstances. 7. Determine the appropriate audit report for a given audit situation. Chapter 4: Professional Ethics Objectives After studying this chapter, you should be able to: 1. Distinguish ethical from unethical behavior in personal and professional contexts. 2. Resolve ethical dilemmas using an ethical framework. 3. Explain the importance of ethical conduct for the accounting profession. 4. Describe the purpose and content of the AICPA Code of Professional Conduct. 5. Apply the AICPA Code rules and interpretations on independence and explain their importance. 6. Understand the requirements of other rules under the AICPA Code. 7. Describe the enforcement mechanisms for the rules of conduct. Chapter 5: Legal Liability Objectives After studying this chapter, you should be able to: 1. Understand the litigious environment in which CPAs practice
2. Explain why the failure of financial statement users to differentiate among business failure, audit failure, and audit risk has resulted in lawsuits 3. Use the primary legal concepts and terms concerning accountants' liability as a basis for study ing legal liability of auditors 4. Describe accountants' liability to clients and related defenses 5. Describe accountants liability to third parties under common law and related defenses 6. Describe accountants' civil liability under the federal securities laws and related defenses 7. Specify what constitutes criminal liability for accountants 8. Describe what the profession and the individual CPa can do and what is being done to reduce the threat of litigation Chapter 6: Audit Responsibilities and Objectives Objectives After studying this chapter, you should be able to 2. Distinguish management's responsibilities for preparing financi T 1. Explain the objective of conducting an audit of financial statemen statements from the auditor 's responsibilities for verifying those financial statement 3. Explain the auditor's responsibility for discovering material misstatements 4. Classify transactions and account balances into financial statement cycles and identify benefits of a cycle approach to segmenting the audit 5. Describe why the auditor obtains a combination of assurance by auditing classes of transactions and ending balances in accounts 6. Distinguish among the five categories of management assertions about financial information 7. Link the six general transaction- related audit objectives to the five management assertions 8. Link the nine general balance-related audit objectives to the five management assert 9. Explain the relationship between audit objectives and the accumulation of audit evidence
2. Explain why the failure of financial statement users to differentiate among business failure, audit failure, and audit risk has resulted in lawsuits. 3. Use the primary legal concepts and terms concerning accountants’ liability as a basis for studying legal liability of auditors. 4. Describe accountants’ liability to clients and related defenses. 5. Describe accountants’ liability to third parties under common law and related defenses. 6. Describe accountants’ civil liability under the federal securities laws and related defenses. 7. Specify what constitutes criminal liability for accountants. 8. Describe what the profession and the individual CPA can do and what is being done to reduce the threat of litigation. Chapter 6: Audit Responsibilities and Objectives Objectives After studying this chapter, you should be able to: 1. Explain the objective of conducting an audit of financial statements. 2. Distinguish management's responsibilities for preparing financial statements from the auditor's responsibilities for verifying those financial statements. 3. Explain the auditor's responsibility for discovering material misstatements. 4. Classify transactions and account balances into financial statement cycles and identify benefits of a cycle approach to segmenting the audit. 5. Describe why the auditor obtains a combination of assurance by auditing classes of transactions and ending balances in accounts. 6. Distinguish among the five categories of management assertions about financial information. 7. Link the six general transaction-related audit objectives to the five management assertions. 8. Link the nine general balance-related audit objectives to the five management assertions. 9. Explain the relationship between audit objectives and the accumulation of audit evidence
Cha pter 7: Audit Evidence Objectives After studying this chapter, you should be able to 1. Contrast audit evidence with evidence used by other professions 2. Identify the four audit ev idence decisions that are needed to create an audit program 3. Specify the characteristics that determine the persuasiveness of evidence 4. Identify and apply the seven types of evidence used in auditing. 5. State the purposes of analytical procedures and the timing of each purpose 6. Select the most appropriate analytical procedure from among the five major type 7. Explain the benefits of using statistical techniques and computer software for analytical procedures Chapter 8: Audit Planning and Documentation Obj After studying this chapter, you should be able to Discuss why adequate audit planning is essential 2. Preplan the audit 3. Obtain appropriate background information about an audit client 4. Obtain information about an audit client's legal obligations 5. Discuss the nature and purposes of preliminary analytical procedures 6. Understand the purposes of audit working papers 7. Prepare organized audit working papers Chapter 9: Materiality and risk Objectives After studying this chapter, you should be able to 1. Apply the concept of materiality to the audit 2. Make a preliminary judgment about what amounts to consider material 3. Allocate preliminary materiality to segments of the audit during planning 4. Use materiality to evaluate audit findings 5. Define risk in auditing 6. Describe the audit risk model and its components 7. Consider the impact of business risk on acceptable audit risk 8. Consider the impact of several factors on the assessment of inherent risk 9. Discuss risk for segments and measurement difficulties
Chapter 7: Audit Evidence Objectives After studying this chapter, you should be able to: 1. Contrast audit evidence with evidence used by other professions. 2. Identify the four audit evidence decisions that are needed to create an audit program. 3. Specify the characteristics that determine the persuasiveness of evidence. 4. Identify and apply the seven types of evidence used in auditing. 5. State the purposes of analytical procedures and the timing of each purpose. 6. Select the most appropriate analytical procedure from among the five major types. 7. Explain the benefits of using statistical techniques and computer software for analytical procedures. Chapter 8: Audit Planning and Documentation Objectives After studying this chapter, you should be able to: 1. Discuss why adequate audit planning is essential. 2. Preplan the audit. 3. Obtain appropriate background information about an audit client. 4. Obtain information about an audit client's legal obligations. 5. Discuss the nature and purposes of preliminary analytical procedures. 6. Understand the purposes of audit working papers. 7. Prepare organized audit working papers. Chapter 9: Materiality and Risk Objectives After studying this chapter, you should be able to: 1. Apply the concept of materiality to the audit. 2. Make a preliminary judgment about what amounts to consider material. 3. Allocate preliminary materiality to segments of the audit during planning. 4. Use materiality to evaluate audit findings. 5. Define risk in auditing. 6. Describe the audit risk model and its components. 7. Consider the impact of business risk on acceptable audit risk. 8. Consider the impact of several factors on the assessment of inherent risk. 9. Discuss risk for segments and measurement difficulties
10. Discuss how materiality and risk are relate d and integrated into the audit pre ocess Chapter 10: Internal Control and Control risk After studying this chapter, you should be able to 1. Contrast management's need for internal control with the auditor's need to consider internal control when designing an audit 2. Explain the five components of internal control 3. Explain methods used to obtain an understanding of internal control 4. Assess control risk by linking strengths and weaknesses of internal control to transaction-related audit objectives 5. Describe the process of designing and performing tests of controls Chapter 11: The impact of Information Technology on the audit Process Ob jectives After studying this chapter, you should be able to 1. De scribe how It improves internal control. 2. Identify risks that arise from using an it-based accounting system 3. Explain how specific types of general controls and application controls reduce risks associated with using It based accounting systems 4. Describe how the strength of general controls affects the auditor s testing of application controls. 5. Use test data, parallel simulation, and embedded audit module approaches when auditing through the computer. 6. Identify issues for environments involving microcomputers, networks, database management sy stems, and outsourced computer service centers
10.Discuss how materiality and risk are related and integrated into the audit process. Chapter 10: Internal Control and Control Risk Objectives After studying this chapter, you should be able to: 1. Contrast management's need for internal control with the auditor's need to consider internal control when designing an audit. 2. Explain the five components of internal control. 3. Explain methods used to obtain an understanding of internal control. 4. Assess control risk by linking strengths and weaknesses of internal control to transaction-related audit objectives. 5. Describe the process of designing and performing tests of controls. Chapter 11: The Impact of Information Technology on the Audit Process Objectives After studying this chapter, you should be able to: 1. Describe how IT improves internal control. 2. Identify risks that arise from using an IT -based accounting system. 3. Explain how specific types of general controls and application controls reduce risks associated with using IT - based accounting systems. 4. Describe how the strength of general controls affects the auditor's testing of application controls. 5. Use test data, parallel simulation, and embedded audit module approaches when auditing through the computer. 6. Identify issues for environments involving microcomputers, networks, database management systems, and outsourced computer service centers