Contents

Preface

About the Author

About the Contributor

Introduction

Chapter 1: Beginning Your CPA Review Program

General Comments on the Examination

Attributes of Examination Success

Purpose and Organization of this Review Textbook

Self-Study Program

Planning for the Examination

Note

Chapter 2: Examination Grading

Chapter 3: Solutions Approach

Chapter 4: Taking the Examination

Examination Strategies

CPA Exam Checklist

Chapter 5: Exam Content Overview

AICPA Content and Skills Specifications

Researching AICPA Professional Standards

Auditing and Attestation

Module 1: Professional Responsibilities

Note

Module 2: Engagement Planning, Obtaining an Understanding of the Client and Assessing Risks

Note

Module 3: Understanding Internal Control and Assessing Control Risk

Note

Module 4: Responding to Risk Assessment: Evidence Accumulation and Evaluation

Module 5: Reporting

Module 6: Accounting and Review Services

Financial Statement Compilations

Financial Statement Reviews

Statements on Standards for Accounting and Review Services

Module 7: Audit Sampling

Note

Module 8: Auditing with Technology

Module 41: Information Technology (Supplement)

Appendices

Appendix A: Outlines of Professional Standards

Appendix B: Auditing and Attestation Sample Examination

Appendix C: Sample Auditing and Attestation Testlet Released by AICPA

Appendix D: 2014 Released AICPA Questions for Auditing and Attestation

Index

End User License Agreement

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Guide

Cover

Table of Contents

Begin Reading

Wiley CPAexcel® Exam Review 2014 Study Guide July 2014

AUDITING AND ATTESTATION

O. Ray Whittington, CPA, PhD

Cover Design: John Wiley & Sons, Inc.

Cover image: © iStockphoto/turtleteeth

The following items, copyright © by the American Institute of Certified Public Accountants, Inc., are reprinted with permission:

Material from Uniform CPA Examination Questions and Answers, 1978 through 2014.

Information for Uniform CPA Examination Candidates, Board of Examiners, 2013.

Material from the Certified Internal Auditor Examination, Copyright © 1994 through 1997 by the Institute of Internal Auditors, Inc., are reprinted and/or adapted with permission.

Material from the Certified Management Accountant Examinations, Copyright © 1993 through 1997 by the Institute of Certified Management Accountants, are reprinted and/or adapted with permission.

Material adapted, with permission, from Writing for Accountants, Aletha Hendrickson, South-Western Publishing Co., 1993.

Copyright © 2014 by John Wiley & Sons, Inc. All rights reserved.

Published by John Wiley & Sons, Inc., Hoboken, New Jersey.

Published simultaneously in Canada.

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ISBN 978-1-118-91790-9 (paperback); 978-1-118-94778-4 (ebk); 978-1-118-94785-2 (ebk)

PREFACE

Passing the CPA exam upon your first attempt is possible! The Wiley CPAexcel Exam Review 2014 Study Guide July: Auditing and Attestation preparation materials provide you with the necessary materials (visit our website at www.wiley.com/cpa for more information). It’s up to you to add the hard work and commitment. Together we can beat the pass rate on each section of about 50%. All Wiley CPAexcel products are continuously updated to provide you with the most comprehensive and complete knowledge base. Choose your products from the Wiley preparation materials and you can proceed confidently. You can select support materials that are exam-based and user-friendly. You can select products that will help you pass!

Remaining current is one of the keys to examination success. Here is a list of what’s new in this edition of the Wiley CPAexcel Exam Review 2014 Study Guide July: Auditing and Attestation text.

The AICPA Content Specification Outlines on Auditing and Attestation for the Computerized CPA Examination beginning in 2014

AICPA questions released in 2014

The new task-based simulations

Coverage of new audit and attestation standards, especially

Latest AICPA auditing, ethics, and quality control standards, including the new clarity standards

Latest Public Company Accounting Oversight Board auditing standards

International auditing standards

Don’t forget to visit our website at www.wiley.com/cpa for supplements and updates.

The objective of this work is to provide you with the knowledge to pass the Auditing and Attestation portion of the Uniform Certified Public Accounting (CPA) Exam. The text is divided up into eight areas of study called modules. Each module contains written text with discussion, examples, and demonstrations of the key exam concepts. Following each text area, actual American Institute of Certified Public Accountants (AICPA) unofficial questions and answers are presented to test your knowledge. We are indebted to the AICPA for permission to reproduce and adapt examination materials from past examinations. Author-constructed questions and simulations are provided for new areas or areas that require updating. All author-constructed questions and simulations are modeled after AICPA question formats. The multiple-choice questions are grouped into topical areas, giving candidates a chance to assess their areas of strength and weakness. Selection and inclusion of topical content is based upon current AICPA Content Specification Outlines. Only testable topics are presented. If the CPA exam does not test it, this text does not present it.

The CPA exam is one of the toughest exams you will ever take. It will not be easy. But if you follow our guidelines and focus on your goal, you will be thrilled with what you can accomplish.

—Ray Whittington

July 2014

ABOUT THE AUTHOR

Ray Whittington, PhD, CPA, CMA, CIA, is the dean of the Driehaus College of Business at DePaul University. Prior to joining the faculty at DePaul, Professor Whittington was the Director of Accountancy at San Diego State University. From 1989 through 1991, he was the Director of Auditing Research for the American Institute of Certified Public Accountants (AICPA), and he previously was on the audit staff of KPMG. He previously served as a member of the Auditing Standards Board of the AICPA and as a member of the Accounting and Review Services Committee and the Board of Regents of the Institute of Internal Auditors. Professor Whittington has published numerous textbooks, articles, monographs, and continuing education courses.

ABOUT THE CONTRIBUTOR

Kurt Pany, PhD, CPA, is a Professor of Accounting at Arizona State University. His basic and advanced auditing courses provided the basis on which he received the Arizona Society of CPAs’ Excellence in Teaching Award and an Arizona CPA Foundation Award for Innovation in the Classroom for the integration of computer and professional ethics applications. His professional experience includes serving for four years on the AICPA’s Auditing Standards Board, serving as an academic fellow in the Auditing Division of the AICPA, and, prior to entering academe, working as a staff auditor for Deloitte and Touche.

INTRODUCTION

To maximize the efficiency of your review program, begin by studying (not merely reading) this chapter and the next three chapters of this volume. They have been carefully organized and written to provide you with important information to assist you in successfully completing the Auditing and Attestation section of the CPA exam. Beyond providing a comprehensive outline to help you organize the material tested on the Auditing and Attestation exam, Chapter 1 will assist you in organizing a study program to prepare for the exam. Self-discipline is essential.

Chapter 1: Beginning Your CPA Review Program

Chapter 2: Examination Grading

Chapter 3: Solutions Approach

Chapter 4: Taking the Examination

Chapter 5: Exam Content Overview

Chapter 1:
Beginning Your CPA Review Program

GENERAL COMMENTS ON THE EXAMINATION

The Uniform CPA Examination is delivered using computer-based testing (CBT). CBT has several advantages. You may take the exam one section at a time. As a result, your studies can be focused on that one section, improving your chances for success. In addition, the exam is no longer offered twice a year. In addition, you may take the exam on your schedule, eight months of the year, six days a week, and in the morning or in the afternoon.

Successful completion of the Auditing and Attestation section is an attainable goal. Keep this point foremost in your mind as you study the first four chapters in this volume and develop your study plan.

Purpose of the Examination¹

The Uniform CPA Examination is designed to test the entry-level knowledge and skills necessary to protect the public interest. An entry-level CPA is defined as one who has fulfilled the applicable jurisdiction’s educational requirements and has the knowledge and skills typically possessed by a person with up to two years of experience. These knowledge and skills were identified through a Practice Analysis performed in 2008, which served as a basis for the development of the content specifications for the exam beginning in 2014.

The CPA examination is one of many screening devices to assure the competence of those licensed to perform the attest function and to render professional accounting services. Other screening devices include educational requirements, ethics examinations, and work experience.

The CPA examination appears to test the material covered in accounting programs of the better business schools. It also appears to be based upon the body of knowledge essential for the practice of public accounting and the audit of a medium-sized client. Since the examination is primarily a textbook or academic examination, you should plan on taking it as soon as possible after completing your required education.

Examination Content

Guidance concerning topical content of the computer-based exam in Auditing and Attestation can be found in a document prepared by the Board of Examiners of the AICPA entitled . We have included the content outline for Auditing and Attestation at the beginning of Chapter 5. The outline should be used as an indication of the topics’ relative emphasis on the exam.

Lesen Sie weiter in der vollständigen Ausgabe!

Lesen Sie weiter in der vollständigen Ausgabe!

Lesen Sie weiter in der vollständigen Ausgabe!

Lesen Sie weiter in der vollständigen Ausgabe!

Lesen Sie weiter in der vollständigen Ausgabe!

Lesen Sie weiter in der vollständigen Ausgabe!

Lesen Sie weiter in der vollständigen Ausgabe!

Lesen Sie weiter in der vollständigen Ausgabe!

Lesen Sie weiter in der vollständigen Ausgabe!

Lesen Sie weiter in der vollständigen Ausgabe!

Lesen Sie weiter in der vollständigen Ausgabe!

Lesen Sie weiter in der vollständigen Ausgabe!

Lesen Sie weiter in der vollständigen Ausgabe!

Lesen Sie weiter in der vollständigen Ausgabe!

Lesen Sie weiter in der vollständigen Ausgabe!

Lesen Sie weiter in der vollständigen Ausgabe!

Lesen Sie weiter in der vollständigen Ausgabe!

Lesen Sie weiter in der vollständigen Ausgabe!

Lesen Sie weiter in der vollständigen Ausgabe!

Lesen Sie weiter in der vollständigen Ausgabe!

Lesen Sie weiter in der vollständigen Ausgabe!

Lesen Sie weiter in der vollständigen Ausgabe!

Lesen Sie weiter in der vollständigen Ausgabe!

Lesen Sie weiter in der vollständigen Ausgabe!

Lesen Sie weiter in der vollständigen Ausgabe!

Lesen Sie weiter in der vollständigen Ausgabe!

Lesen Sie weiter in der vollständigen Ausgabe!