Devry acct 555 entire course

1. 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.

2. 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?

3. 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 evidence?
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.

4. 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
20-17

5. 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
20-20
· 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.
21-17
Which of the following controls will most likely justify a reduced
assessed level of control risk for the occurrence assertion for
purchases of inventory?
21-18
When an auditor tests a client’s cost accounting records, the
auditor’s tests are primarily designed to determine that
21-19
Which of the following procedures is the auditor least likely to
perform on the actual date the physical inventory count is
observed?
21-20
For each of the preceding questions, state the purpose of the
internal control.

6. 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
1. (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?
3. (TCO F) An auditor’s independence is considered impaired if
the auditor has
4. (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):
5. (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:
7. (TCO F) Analytical procedures must be used during which
phase(s) of the audit?
Test of controls OR planning OR completion

7. 8. (TCO F) In a financial statement audit, inherent risk is
evaluated to help an auditor assess which of the following?
9. (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 long-term 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 company.
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.

8. 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.
5. (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.
7. (TCO F) Match nine of the terms (A–K) with the definitions
provided below (1–9).

9. 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 client’s
_____ 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 audit
8. (TCO G) Discuss the essential activities involved in the initial
planning of an audit.
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)
2. (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)
3. (TCO A) An auditor’s independence is considered impaired if
the auditor has: (Points : 5)

10. 4. (TCO H) Which of the following should be included as a written
representation from management? (Points : 5)
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 Control-Integrated Framework. Provide an example of each
of those components and explain why they are important in
providing “Reliable Financial Reporting” for a company. Please
provide a complete answer for full points. (Points : 30)
2.(TCO G) Business risk must be assessed in performing an audit.
(a) Define business risk in association with an audit and describe
several sources of such risk.

11. (b) How does business risk relate to the performance of preliminary
analytical procedures in an audit?
(c) There are four major areas in planning an audit engagement and
there are subparts to each of the four major areas. Please identify
the four major areas and the subparts that are associated with the
major areas.(Points : 30)
3.(TCO H) Audit Risk consists of inherent risk, control risk, and
detection risk.
(a) Please completely define each of the above.
(b) Indicate whether each of the statements below is true or false
and explain your position:
(1) The risk that material misstatement will not be prevented or
detected on a timely basis by internal controls can be reduced to
zero by having effective controls in place.
(2) Detection Risk is a function of the efficiency of an auditing
procedure.
(3) Cash is more susceptible to theft than an inventory of coal
because it has greater inherent risk?
(4) The Inherent risk of the theft of an inventory of cellphones at a
mall store is greater than the misappropriation of cash at a COSTCO
Store?(Points : 30)
4.(TCO I) Accounts Receivable – For each of the following, please
explain if an auditor’s review of the client’s sales cutoff would
detect these problems:
(a) Would excessive goods returned for credit be detected by a
sales cut-off test – why or why not?
(b) Would unrecorded sales discounts be detected by a sales cut-off
test – why or why not?
(c) Lapping of year-end accounts receivable be detected by a sales
cut-off test – why or why not?
(d) Inflated sales for the year – could it be detected by a sales-cut-
off test – why or why not?(Points : 30)

12. 5.(TCO J) One of the major problems in a computer system is that
incompatible functions may be performed by the same individual.
Identify from the below choices the control compensating for
inadequate segregation of duties in a computer system. Explain why
you have selected your response.
(a) Echo Checks
(b) A check digit system
(c) Computer-Generated hash totals
(d) A computer access log (Points : 30)
6.(TCO K) You are the Senior Auditor for WWZ Co. and you have
completed the testing of all the accounts. However, prior to issuing
your report, what are at least five other procedures or reviews that
must be performed prior to issuing your report? Explain your
responses(Points : 30)
ACCT 555 Week 8 Final Exam
1. (TCO A) There are ten generally accepted auditing standards,
divided into three categories. What are the standards of reporting?
2. (TCO A) Distinguish between generally accepted auditing
standards (GAAS) and generally accepted accounting principles
(GAAP). What professional organization establishes GAAS? What
professional organization establishes GAAP?
3. Assume you are the partner in charge of the audit of Franklin
Corporation’s 2002 financial statements. The audit report has not
yet been prepared. In each independent situation following, indicate
the appropriate opinion you should issue and why you would issue
that opinion
4. State whether there is any violation of the AICPA Code of
Professional Conduct, and the nature of the violation. Where there
is a violation, evaluate the potential legal liability the accountant
may face. Justify your position

13. 5. Discuss at least five of the actions that can be taken by
individual CPAs, to protect themselves from legal liability
6. (TCO E) Bobby Thigpen, waiter at Relief Stop, has been taking
cash from the restaurant. Thigpen prepares a customer’s check
from which the customer pays. Thigpen then destroys the check,
and prepares a new one with different items of lower cost. He
presents the new check and indicated amount on the check to the
cashier, and saves the excess cash for himself. Question: Formulate
three internal control features that the restaurant could implement,
to eliminate this defalcation
7. Three types of legal documents and records that auditors
examine in the planning phase of an audit are the corporate charter
and bylaws, corporate minutes of meetings of the board of directors
and stockholders, and contracts. Discuss the audit-relevant
information contained in each of these three types of documents
that an auditor should be aware of early in the audit.
8. (TCO F) What are specific audit objectives? Explain their
relationship to the general audit objectives. (Points: 25)
2.(TCO H) Explain why it is necessary to allocate the preliminary
judgment about materiality to individual accounts (segments) in the
financial statements. Also explain why allocating to balance sheet
accounts is more common than allocating to income statement
accounts. (Points: 25)
Allocating the preliminary judgment about materiality to individual
segments is necessary because evidence is accumulated for
segments rather than for the financial statements as a whole.
Allocating to segments establishes a tolerable misstatement
amount for each segment, which helps the auditor decide the
appropriate audit evidence to accumulate for each segment. Most
practitioners allocate materiality to balance sheet accounts rather
than income statement accounts because there are fewer balance
sheet than income statement accounts
3. (TCO I) For each of the following potential misstatements,
provide one potential audit test that could be used to detect the
misstatement
4. (TCO I) Describe how the auditor tests the classification
objective for accounts receivable. (Points: 25)

14. The classification objective is tested by reviewing the aged trial
balance for material receivables from affiliates, officers, directors,
or other related parties. If notes receivable or accounts that should
not be classified as a current asset are included with the regular
accounts, these should also be segregated. Finally, if credit
balances in accounts receivable are significant, it is appropriate to
reclassify them as accounts payable
5. The design of tests of details of balances for inventory is
affected by audit results from multiple cycles. Identify the cycles,
other than the inventory and warehousing cycle, that affect the
audit of inventory
6. Describe three computer auditing techniques available to the
auditor
7. (TCO K) Match seven of the terms (a-p) with the
description/definitions provided below (1-7):