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DEVRY ACCT 555 Entire Course .pdf

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DEVRY ACCT 555 Entire Course
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ACCT 555 Week 1 Homework
Chapter 2, pages 41–44: Problems 2-16, 2-17, 2-19, and 2-20
Chapter 3, pages 67–69: Problems 3-23, 3-25, and 3-26

ACCT 555 Week 2 Homework
4-18, 4-21, 4-22, 5-17, 5-19, 5-21, 5-26, 11-19, 11-20

ACCT 555 Week 3 Homework Assignment
6-19 (Objective 6-1) The following questions concern the reasons auditors do audits.
Choose the best response.

Which of the following best describes the reason why an independent auditor
reports on financial statements?
Because of the risk of material misstatement, an audit should be planned and
performed with an attitude of
The major reason an independent auditor gathers audit evidence is to

6-20 (Objective 6-3) The following questions deal with errors and fraud. Choose the
best response.
An independent auditor has the responsibility to design the audit to provide
reasonable assurance of detecting errors and fraud that might have a material effect
on the financial statements. Which of the following, if material, is a fraud as defined
in auditing standards?
What assurance does the auditor provide that errors, fraud, and direct-effect illegal
acts that are material to the financial statements will be detected?

6-27 (Objectives 6-6, 6-7) The following are specific transaction-related audit
objectives applied to the audit of cash disbursement transactions (a through f),
management assertions about classes of transactions (1 through 5), and general
transaction-related audit objectives (6 through 11).
Specific Transaction-Related Audit Objective
Recorded cash disbursement transactions are for the amount of goods or services
received and are correctly recorded.
7-25 (Objectives 7-3, 7-4) The following questions concern persuasiveness of
evidence. Choose the best response.
Which of the following types of documentary evidence should the auditor consider to
be the most reliable?
Which of the following statements concerning audit evidence is true?
Audit evidence can come in different forms with different degrees of persuasiveness.
Which of the following is the least persuasive type of evidence?
Which of the following presumptions is correct about the reliability of audit

7-26 (Objectives 7-5, 7-6) The following questions concern audit documentation.
Choose the best response.
Which of the following isnota primary purpose of audit documentation?
During an audit engagement, pertinent data are compiled and included in the audit
files. The audit files primarily are considered to be
Although the quantity, type, and content of audit documentation will vary with the
circumstances, audit documentation generally will include the
The permanent file of an auditor’s working papers most likely would include copies
of the

7-27 (Objective 7-4) The following are examples of documentation typically obtained
by auditors:
7-28 (Objective 7-4) The following are examples of audit procedures:
8-25 (Objectives 8-1, 8-3) The following questions concern the planning of the
engagement. Select the best response.
Which of the following is an effective audit planning procedure that helps prevent
misunderstandings and inefficient use of audit personnel?

8-28 (Objectives 8-2, 8-3, 8-4, 8-5) The following are various activities an auditor
does during audit planning.

ACCT 555 Week 4 Homework Assignment
9-22 (Objectives 9-1, 9-2) The following questions deal with materiality. Choose the
best response.
9-23 (Objectives 9-6, 9-8) The following questions concern audit risk. Choose the
best response.

Some account balances, such as those for pensions and leases, are the result of
complex calculations. The susceptibility to material misstatements in these types of
accounts is defined as
9-24 (Objective 9-9) The following questions deal with audit risk and evidence.
Choose the best response.
10-30 (Objectives 10-1, 10-2, 10-7) The following are general questions about
internal control. Choose the best response.

When considering internal control, an auditor must be aware of the concept of
reasonable assurance, which recognizes that the

ACCT 555 Week 5 Homework Assignment
Chapter 12, pages 390–397: Problems 12-17, 12-18, and 12-27
Chapter 13, pages 429–430: Problems 13-22, 13-23, and 13-24

ACCT 555 Week 6 Homework
Chapter 14 Problems 14-21, 14-22, 14-23 14-24,
Chapter 15 Problems 15-22, 15-24, 15-25,
Chapter 16 Problem 220,21,22,24,28
Chapter 17 Problem 28

ACCT 555 Week 7 Homework Assignment
a.A factory foreman at Steblecki Corporation discharged an hourly worker but did
not notify the human resources department. The foreman then forged the worker’s
signature on time cards and work tickets and, when giving out the checks, diverted
the payroll checks drawn from the discharged worker to his own use. The most
effective procedure for preventing this activity is to

An auditor found that employee time records in one department are not properly
approved by the supervisor. Which of the following could result?
The purpose of segregating the duties of hiring personnel and distributing payroll
checks is to separate the


Identify whether each of the procedures is primarily a test of control or a
substantive test of transactions.
Identify the transaction-related audit objective(s) of each of the procedures.

Which of the following controls will most likely justify a reduced assessed level of
control risk for the occurrence assertion for purchases of inventory?
When an auditor tests a client’s cost accounting records, the auditor’s tests are
primarily designed to determine that
Which of the following procedures is the auditor least likely to perform on the actual
date the physical inventory count is observed?
For each of the preceding questions, state the purpose of the internal control.
For each internal control, list a test of control to test its effectiveness.
For each of the preceding questions, identify the nature of the potential financial
misstatement(s) if the control is not in effect.
For each of the potential misstatements in part c, list a substantive audit procedure
to determine whether a material misstatement exists

ACCT 555 Week 7 Course Project Smackey Dog Foods Inc

ACCT 555 Midterm

(TCO F) Which of the following procedures should an auditor generally perform
regarding subsequent events?

2. (TCO A) An auditor reads the letter of transmittal accompanying a county’s
comprehensive annual financial report and identifies a material inconsistency with
the financial statements. The auditor determines that the financial statements do not
require revision. Which of the following actions should the auditor take?

(TCO F) An auditor’s independence is considered impaired if the auditor has


(TCO B) When an independent CPA is associated with the financial statements of
a publicly held entity but has not audited or reviewed such statements, the
appropriate form of report to be issued must include a(an):

(TCO F) Which is not a characteristic of the reliability of evidence?

6. (TCO C) According to PCAOB standards, the nature and extent of required
planning activities for an issuer audit are influenced by all of the following factors,
except for:

(TCO F) Analytical procedures must be used during which phase(s) of the audit?
Test of controls OR planning OR completion

(TCO F) In a financial statement audit, inherent risk is evaluated to help an
auditor assess which of the following?
(TCO F) The primary purpose of performing analytical procedures in the
planning phase of an audit is to
10. (TCO G) The most widely used profitability ratio is

11. (TCO G) Which ratio is best used to assess a company’s ability to meet its longterm debt obligations?
12. (TCO A) Match the following definitions to the appropriate terms.
13. (TCO B) The following is a portion of a qualified audit report issued for a private
To the shareholders of Tamarak Corporation,

We have audited the accompanying balance sheet of Tamarak Corporation as of
October 31, 2009, and the related statements of income, retained earnings, and cash
flows for the past year. These financial statements are the responsibility of the
company’s management. Our responsibility is to express an opinion on these
financial statements based on our audit.
We conducted our audit in accordance with auditing standards generally accepted in
the United States of America. Those standards require that we plan and perform the
audit to obtain reasonable assurance about whether the financial statements are
free of material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit also
includes assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation. We
believe that our audit provides a reasonable basis for our opinion.
The company has included in property and debt in the accompanying balance sheet
certain lease obligations that, in our opinion, should be expensed in order to
conform with generally accepted accounting principles. If these lease obligations
were capitalized, property would be decreased by $4,000,000, long-term debt by
$2,000,000, and retained earnings by $180,000 as of October 31, 2009, and net
income and earnings per share would be decreased by $180,000 and $0.62,
respectively, for the past year.
3. (TCO C) The following situation involves a possible violation of the AICPA’s code
of professional conduct. For this situation, (1) determine the applicable rule number
from the code, (2) decide whether or not the code has been violated, and (3) briefly
explain how the situation violates (or does not violate) the code. Your answer should
be set up something like this:
Rule # _____ Violation? Yes or No.
Provide a one- or two-line explanation.
Auditor Tex Gato of the CPA firm Smackey and Smackey, CPAs, enjoyed auditing his
favorite client, Super Pup Dog Food, because the client would allow him to take home
to his dog a variety of dog food samples that amounted to a year’s worth of dog food.
4. (TCO C) The following situation involves a possible violation of the AICPA’s code
of professional conduct. For this situation, (1) determine the applicable rule number
from the code, (2) decide whether or not the code has been violated, and (3) briefly
explain how the situation violates (or does not violate) the code. Your answer should
be set up something like this:
Rule # _____ Violation? Yes or No.
Provide a one- or two-line explanation.

Howard Cunningham & Co., CPAs, designates its firm as Members of the American
Institute of Certified Public Accountants. All of the partners of the firm are CPAs.
However, one of the partners has recently chosen to allow her membership to lapse
because of personal reasons.

(TCO C) Under the provisions of the Sarbanes-Oxley Act of 2002 (SOX), the audit
committee of a public company has specific guidelines to which employees must
adhere. Discuss some of the mandated features of the audit committee of a public
company under SOX.

6. (TCO D) Discuss some of the steps the AICPA and the accounting profession as a
whole can and are taking to reduce practitioners’ exposure to lawsuits. You answer
should provide at least five steps.

(TCO F) Match nine of the terms (A–K) with the definitions provided below (1–
A – Foot
B – Compute
C – Scan
D – Inquire
E – Count
F – Trace
G – Recompute
H – Read
I – Examine
J – Observe
K – Compare

_____ 1: A calculation done by the auditor independent of the client
_____ 2: Addition of a column of numbers to determine if the total is the same as the
_____ 3: A comparison of information in two different locations
_____ 4: A use of the senses to assess certain activities
_____ 5: Following details of transactions from original documents to journals
_____ 6: A less detailed examination of a document or record to determine if there is
something unusual warranting further investigation
_____ 7: Obtaining information from the client in response to specific questions
_____ 8: A determination of assets on hand at a given time
_____ 9: An examination of written information to determine facts pertinent to the

(TCO G) Discuss the essential activities involved in the initial planning of an

ACCT 555 Final Exam
1. (TCO B) An auditor was unable to obtain sufficient appropriate audit evidence
concerning certain transactions due to an inadequacy in the entity’s accounting
records. The auditor would choose between issuing a(an): (Points : 5)

(TCO K) An auditor should consider which of the following when evaluating the
ability of a company to continue as a going concern? (Points : 5)


(TCO A) An auditor’s independence is considered impaired if the auditor has:
(Points : 5)


(TCO H) Which of the following should be included as a written representation
from management? (Points : 5)


(TCO E) An auditor would most likely be concerned with internal controls that
provide reasonable assurance about the: (Points : 5)

1.(TCO A) In performing an ATTEST Engagement A CPA would be required to do what
as part of the engagement? (Points : 19)
2.(TCO B) When a CPA performs an Audit the Client is always looking to receive a
“CLEAN OPINION” or an Unqualified Opinion. Explain what your client must do for a
CPA to justify that Unqualified Opinion? (Points : 19)
3.(TCO C) – Based upon the below 4 situations – explain your position of “why” or
“why not” the following circumstances would have violated the professions ethical
standards when you are a practicing CPA?
4.(TCO D) Discuss five steps individual practicing auditors can take to minimize their
legal liability.(Points : 19)
5.(TCO F) Sarbanes Oxley requires that per Section 404 that Internal Controls within
a publicly held company are to be reviewed, evaluated and tested at year end to
insure that adequate controls are in place. In addition to understanding the Internal
Controls present within your client’s company, the auditor must also evaluate
whether these controls are in place, and implemented. How does an auditor evaluate
these controls to see that they are working and in place?(Points : 19)

1. (TCO E) What is COSO? Describe the 5 elements of COSO’s Internal ControlIntegrated Framework. Provide an example of each of those components and explain

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