Johnstone 9e Auditing Chapter5 PPtFINAL

AUDITING
A RISK-BASED APPROACH
TO CONDUCTING A
QUALITY
AUDIT
9th Edition
Karla M. Johnstone | Audrey A. Gramling | Larry E.
Rittenberg
Chapter 5
Professional Auditing Standards and
the Audit Opinion Formulation Process
Copyright 2014 South-Western/Cengage

Learning
Learning Objectives
1.
2.
3.
4.
Identify and compare the various auditing

standards that provide guidance on the audit
opinion formulation process
List and discuss the foundational principles
underlying the auditing standards
List the phases and related activities in the
audit opinion formulation process
Explain the concept of accounting cycles and
discuss their importance to the audit opinion
formulation process
Learning
5-2
Learning Objectives
5.
6.
7.
8.
Describe the assertions that are inherent to

financial statements and explain their
importance to the audit opinion formulation
process
Define audit evidence and describe the purpose
and types of audit procedures used to obtain
audit evidence
Discuss the importance of audit documentation
and provide examples
Discuss audit activities in Phase I of the audit
Learning
5-3
Learning Objectives
9.
10.
11.
12.
Discuss audit activities in Phase II of the

Discuss audit activities in Phase III of the
Discuss audit activities in Phase IV of the
Discuss audit activities in Phase V of the

Learning
5-4
Learning Objectives
13.
14.
Apply the concepts related to the

auditors assessment of internal control
design effectiveness, implementation,
and operating effectiveness
Apply the frameworks for professional
decision making and ethical decision
making to issues involving conducting an
audit

Learning
5-5
THE AUDIT OPINION

FORMULATION PROCESS

Learning
5-6
PROFESSIONAL JUDGMENT IN CONTEXT Importance of Adhering to Professional

Auditing Standards
Adhering to the professional auditing
standards is viewed as conducting a quality
audit
Lack of adherence heightens the risk of
issuing an unqualified audit opinion on
financial statements that are materially
misstated
Highlighted in the 2004-2006 audits of
Thornton Precision Components, Limited (TPC)
performed by Ernst & Young, LLP UK (E&Y UK)
Learning
5-7

Auditing Standards
What is the role of auditing standards and
their underlying principles in promoting a
quality audit? (LO 1, 2)
How does the fundamental concept of
professional skepticism relate to audit
quality? (LO 2)
What audit evidence is necessary for opining
on a clients financial statements? (LO 6)
How does audit documentation provide
evidence related to audit quality? (LO 7)
Learning
5-8

Auditing Standards
What audit activities are conducted during

the audit opinion formulation process to
provide reasonable assurance about a
clients financial statements? (LO 8, 9, 10,
11, 12)
How does professional judgment and
ethical decision making contribute to audit
quality? (LO 14)

Learning
5-9
Learning Objective 1
Identify and Compare the Various Auditing

Standards that Provide Guidance on the Audit
Opinion Formulation Process

Learning
Professional Auditing Standards

Auditors in the United States follow auditing
guidance issued by:
American Institute of Certified Public Accountants
(AICPA)
Public Company Accounting Oversight Board
(PCAOB)
International Auditing and Assurance Standards
Board (IAASB)
Common objective - Provide assurance to public

that audits are conducted in a quality manner
Learning
5-11
Professional Auditing Standards

Require auditors to develop and
communicate:
Opinion on financial statements
Clients internal control over financial reporting
Vary according to the nature of organization

audited
Audit compliance depends on:
Domicile of the organization
Where its stock is publicly traded
Learning
5-12
AICPAS AUDITING STANDARDS

BOARD - CLARITY PROJECT
Made standards easier to read, understand,
and apply
Converged its standards with the
International Standards on Auditing (ISAs),
issued by the IAASB
Standards were written using drafting
convention called the clarity format
Issued the clarified standards in a single
Statement on Auditing Standard (SAS No.
122) in 2012
Learning
5-13
Each standard of Clarity format

presented in following sections
Introduction
Purpose and scope of the standard
Objective
Context in which the requirements are set
Definitions
Relevant meanings of terms in standards
Requirements
Actions required to achieve objective of the
Application
and other explanatory
standard
material
Cross-references to the requirements

Guidance for applying requirements of
standard Copyright 2014 South-Western/Cengage
Learning
5-14
Auditing Standards Issued by

the IAASB
Objectives
Set auditing, assurance, and other related
standards
Facilitate convergence of international and
national auditing and assurance standards
Enhance quality and consistency of practice
throughout the world
Strengthen public confidence in the global
auditing and assurance profession

Learning
5-15

the IAASB
Standards should to be understandable, clear,
and consistent
Launched a program in 2004 to enhance
clarity of its ISAs
Clarity Project was completed in 2009
As of 2013, a set of its clarified standards
comprises of:
36 ISAs
1 International Standard on Quality Control
(ISQC)
Learning
5-16
Each standard of Clarity format

presented in following sections
Introduction
Purpose and scope of subject matter of ISA
Objective
Clear statement of the objective of the
auditor
Definitions
For applicable terms included
Requirements
For each objective are provided
Application and other explanatory

material
Explains what a requirement means or

intends to cover

Learning
5-17

the PCAOB
Apply to auditors of U.S. public companies
Issued sixteen Auditing Standards (ASs) as
of 2013
PCAOB interim standards - Standards
adopted from AICPA
Requirement for public company auditors,
unless superseded by a PCAOB standard
Standards issued by AICPA after April 16,
2003, not included
Learning
5-18
Exhibit 5.1 - Comparison of U.S.

and International Auditing
Standards

Learning
5-19
List and Discuss the Foundational Principles

Underlying the Auditing Standards

Learning
PCAOB Guidance - General

standards
Require
Audit to be performed by individuals having
adequate technical training and proficiency as
an auditor
Auditors to be independent:
In fact, i.e., in reality in terms of mental attitude
and
In appearance, i.e., in how the auditor is perceived
by users
Audit to be conducted with professional care

expected of a prudent auditor
Learning
5-21
PCAOB Guidance - Fieldwork

standards
Applicable to conduct of the audit
Require auditors to:
Properly plan and supervise the audit
Develop an understanding of clients
controls
Prerequisite for developing audit tests
Obtain audit evidence by performing audit

procedures

Learning
5-22
PCAOB Guidance - Reporting

standards
Applicable to communicating auditors opinion
Require auditors to:
State whether financial statements are presented in
accordance with the applicable financial reporting
framework (i.e., GAAP or IFRS)
Identify conditions where accounting principles are
not consistently observed
Review disclosures for adequacy and state in the
report if disclosures are not reasonably adequate
Express an opinion on financial statements as a
whole or state that an opinion cannot be expressed
Learning
5-23
AICPA Guidance - Purpose and

premise of audit
Purpose - Enhance degree of confidence
that users can place in financial statement
Premise - Management has responsibility
to:
Prepare financial statements
Maintain internal control over financial
reporting
Provide auditor with relevant information
and access to personnel
Learning
5-24
AICPA Guidance Responsibilities

The auditors responsibilities include
Having appropriate competence and
capabilities to perform audit
Complying with ethical requirements
Maintaining professional skepticism
throughout the audit

Learning
5-25
AICPA Guidance - Performance

Obtain assurance that financial statements are
free from material misstatement
Limitations - Lack of absolute assurance about
financial statements being free from misstatement
Requires an auditor to:
Plan and supervise work

Determine materiality levels
Identify risks of material misstatement
Design and implement audit responses to assessed
risks

Learning
5-26
AICPA Guidance - Reporting

Expressing either of the following
Financial statements are free of material
misstatement
Stating that an opinion cannot be expressed

Learning
5-27
Integrated audit
Combines audits of an organizations
financial statements and its internal
control over financial reporting
In this audit:
Opinion provided on effectiveness of
internal control over financial reporting
Additional audit work done to be able to
issue that opinion

Learning
5-28
Auditing in Practice - Benefits

of Integrating the Audits
Integrating audits of internal controls and of
financial statements makes sense
Both the tests of controls and direct tests of
account balances provide evidence related to
each other
Example:
Tests of controls provide indirect evidence that
financial statements are free from misstatement
Further, if material misstatements found in account
balances or disclosures, it implies that there were
material weaknesses in internal controls
Learning
5-29
List the Phases and Related Activities in the

Audit Opinion Formulation Process

Learning
EXHIBIT 5.2 - OVERVIEW OF CLIENTS PREPARATION

OF FINANCIAL STATEMENTS AND MANAGEMENT
REPORT ON INTERNAL CONTROL

Learning
5-31
Exhibit 5.3 - Activities of each Phase of

the Audit Opinion Formulation Process

Learning
5-32
Important Concepts Affecting Audit

Accounting cycles
Management assertions
Audit evidence and audit procedures
Documentation

Learning
5-33
Explain the Concept of Accounting Cycles and

Discuss Their Importance to the Audit Opinion
Formulation Process

Learning
Accounting Cycles
Recording and processing transactions
that affect a group of related accounts
Begin when a transaction occurs and ends
when it is recorded in financial statements
Break the audit into manageable sections
of related accounts

Learning
5-35
Accounting Cycles
Auditor focuses on:
Flow of transactions within a particular cycle
Identifying:
Points where material misstatement can occur
Controls that have been designed and
implemented to mitigate those risks
Understanding risks and controls within each

cycle
Helps determine specific audit procedures to be
used and specific audit evidence to be obtained
Learning
5-36
Exhibit 5.4 - Illustrations of Cycles

and Related Accounts

Learning
5-37
Describe the Assertions that Are Inherent to Financial

Statements and Explain Their Importance to the
Audit Opinion Formulation Process

Learning
Financial Statement Assertions

Assertions made by management
Existence
Completeness
Rights and obligations
Valuation
Presentation and disclosure
Related evidence is obtained for accounts

and disclosure in financial statements

Learning
5-39
MANAGEMENTS FINANCIAL
STATEMENT ASSERTIONS IN PCAOB
STANDARDS

Learning
5-40
Define Audit Evidence and Describe the Purpose

and Types of Audit Procedures Used to Obtain
Audit Evidence

Learning
Audit Evidence and Procedures

Audit evidence: Information used by auditor in
arriving at conclusions on which the opinion is
based
Audit procedures: Procedures designed to
obtain audit evidence to support audit opinion(s)
Risk assessment procedures
Provide information for assessing the risks of
material misstatement in the financial statements
Do not provide sufficient evidence upon which to
base an audit opinion
Used for purposes of planning the audit
Learning
5-42
Audit Evidence and Procedures

Tests of controls: Designed for evaluating
operating effectiveness of controls in
preventing, or detecting and correcting,
material misstatements, typically at
assertion level
Substantive procedures
Designed for detecting material
misstatements at assertion level
Comprising of tests of details and substantive
analytical procedures
Learning
5-43
Audit Procedures
Sufficient appropriate audit evidence:
Measure of the quantity of audit evidence
about following factors of audit procedures
Nature
Timing
Extent
Audit program
Lists audit procedures to be followed in
gathering evidence
Helps monitor progress and supervising work
Learning
5-44
Exhibit 5.6 - Types of Audit

Procedures

Learning
5-45
Discuss the Importance of Audit Documentation

and Provide Examples

Learning
Audit Documentation
Record of audit procedures performed,
relevant audit evidence obtained, and
conclusions the auditor reached
Known as working papers or workpapers

Learning
5-47
Purposes of Audit
Documentation
Assisting engagement team in:
Planning and performing audit
Supervising and reviewing audit work
Retaining a record of matters of continuing

significance to future audits
Enabling internal or external inspections of
completed audits
Assisting auditors in understanding work
performed in prior year
Learning
5-48
Examples of Audit
Documentation
Audit programs
Analyses prepared by client or auditor
Memorandums
Summaries of significant findings or issues
Letters of confirmation and representation
Checklists
Correspondence concerning significant
findings or issues
Learning
5-49
Discuss Audit Activities in Phase I of the Audit


Learning
Phase I - Making Client

Acceptance and Continuance
Decisions
Preconditions for accepting auditing

engagements
Use of an acceptable financial reporting

framework
Agreement of management to acknowledge
and understand its responsibilities

Learning
5-51
Auditing in Practice - Accepting

a New Audit Engagement
Communicate with predecessor auditor
Following issues should be addressed
Information regarding integrity of management
Disagreements with management about
accounting policies, auditing procedures
Communications to management and those in
charge with governance regarding:
Fraud and noncompliance with laws
Deficiencies and material weaknesses in internal
control
Learning
5-52
Audit Engagement Letter

Document specifying responsibilities of client
and auditor that includes the following:
Objective and scope of audit of financial statements
Responsibilities of auditor and management
Statement that some material misstatements may
not be detected due to inherent limitations of audit
and internal control
Identification of applicable financial reporting
framework for preparation of financial statements
Reference to expected form and content of any
reports to be issued
Learning
5-53
Discuss Audit Activities in Phase II of the Audit


Learning
Phase II - Performing Risk

Assessment
Identifying relevant risks and determining
audit procedures required to address them
Continuing clients - Update information
from previous years audit
New clients - the risk assessment process
is more time consuming

Learning
5-55
Identifying and Assessing Risks

of Material Misstatement
Essential to audit planning
Requires identification of significant:
Accounts
Disclosures
Relevant assertions
Auditor establishes a materiality level

overall and for specific accounts and
disclosures

Learning
5-56
EXHIBIT 5.7 - Examples of

Sources of Risk of Material
Misstatement

Learning
5-57
Risks at assertion level

Inherent risk
The susceptibility of an assertion to a misstatement,
due to error or fraud, that could be material,
individually or in combination with other
misstatements, before consideration of any related
controls
Control risk
The risk that a misstatement due to error or fraud
that could occur in an assertion and that could be
material, individually or in combination with other
misstatements, will not be prevented or detected on
a timely basis by the organization's internal control
Learning
5-58
Risk assessment procedures

Inquiries for information to assist in
identifying risks of material misstatement
due to fraud or error
Preliminary analytical procedures
Observation and inspection of
documentation

Learning
5-59
Types of controls
Entity-wide controls
Transaction controls
Fraud-related controls

Learning
5-60
Auditing in Practice - Controls

to Address Fraud Risk
PCAOB has identified the following
Controls over significant, unusual transactions,
particularly those resulting in unusual journal entries
Controls over journal entries and adjustments made
in the period-end financial reporting process
Controls over related-party transactions
Controls related to significant management estimates
Controls mitigating incentives for, and pressures on,
management to falsify financial results

Learning
5-61
types of procedures to
assess design effectiveness
Inquiry of appropriate personnel
Observation of the organizations operations
Inspection of relevant documentation
Performance of walkthroughs
Documentation of preliminary assessment of
control design and basis for that assessment
Understand the approach used by
management for conclusions on
effectiveness of internal control
Learning
5-62
AUDITING IN PRACTICE - DOCUMENTING

AUDITORS UNDERSTANDING OF AN
ORGANIZATIONS INTERNAL CONTROLS
Process of documentation uses:

Narratives
Flowcharts
Questionnaires
Once documented, in subsequent years

audit firms focus on:
Changes in the system
Effectiveness of monitoring controls

Learning
5-63
Assessing range of control risk

High control risk
Weak internal controls
Auditor cannot rely on controls to reduce
substantive procedures for account balances
Assessing control risk as low

Strong internal controls
Auditor will test operating effectiveness of
controls to reduce substantive procedures for
account balances
Learning
5-64
AUDITING IN PRACTICE EXAMPLE FOR WEAK

INTERNAL CONTROL DESIGN AND LINKS TO
SUBSTANTIVE AUDIT PROCEDURES
Scenario - Clients internal control design

assessed as ineffective that makes a
preliminary assessment of control risk as
high
Requires expanding substantive tests for
sales returns by:
Arranging to be on hand at year end to
observe the taking of physical inventory
Determining if receipts for items returned by
customers are issued in the correct time period
Learning
5-65
AUDITING IN PRACTICE EXAMPLE FOR WEAK

INTERNAL CONTROL DESIGN AND LINKS TO
SUBSTANTIVE AUDIT PROCEDURES
Reviewing credit memos issued shortly after

year end
Increasing number of accounts receivable
confirmations sent to the clients customers

Learning
5-66
Additional Considerations for

an Integrated Audit
Risk assessment procedures apply to:
Audit of internal control over financial reporting
Audit of financial statements
Top-down approach - Used for audit of internal

control over financial reporting to select
controls to test
Begins at financial statement level
Focuses on entity-wide controls
Works down to significant accounts and
disclosures and their relevant assertions
Learning
5-67
Responding to Identified Risks

Purpose of risk assessment procedures
Identify risks of material misstatement
Determine where misstatements in financial
statements may occur
Design appropriate audit strategy
Controls reliance audit: Includes tests of

controls and substantive procedures
Substantive audit: Includes substantive
procedures and does not include tests of
controls
Learning
5-68
Responding to Identified Risks

Selecting specific audit procedures to respond to
identified risks
Assembling an audit team having knowledge,
skill, and ability needed to address assessed
risks
Emphasizing the need for professional skepticism
Providing an appropriate level of supervision for
assessed risks
Incorporating elements of unpredictability in
selection of audit procedures
Learning
5-69
EXHIBIT 5.8 - Responding to Identified

Risks through Evidence Decisions

Learning
5-70
Additional Considerations for

an Integrated Audit
Audit strategy that includes tests of controls
to accomplish objectives of both audits
Sufficient evidence related to operating
effectiveness of controls to support
auditors:
Control risk assessments for purposes of the
audit of financial statements
Opinion on internal control over financial
reporting as of year-end

Learning
5-71
Fraud Considerations
Performing tests of controls and
substantive procedures susceptible to
fraud risks
Performing procedures related to risk of
management override of controls
Examining journal entries
Reviewing accounting estimates for biases
Evaluating business rationale for significant
unusual transactions
Learning
5-72
Discuss audit activities in Phase III of the audit


Learning
PHASE III - Obtaining Evidence about

Internal Control Operating
Effectiveness
Auditor tests controls
Determine whether controls are operating
effectively at year-end or throughout the
year
Auditor obtains more persuasive audit

evidence
As the reliance auditor places on
effectiveness of a control increases

Learning
5-74
Auditing in Practice - Risk Assessment

Procedures and Tests of Operating Effectiveness
of Controls
Auditors risk assessment procedures

include
Inquiring about managements use of
budgets
Inspecting documentation of managements
comparison of monthly budgeted and actual
expenses
Inspecting reports pertaining to the
investigation of variances between
budgeted and actual amounts
Learning
5-75
Selecting Controls to Test

Involves choosing controls that effectively
indicate capability to address the assessed
risk of material misstatement for relevant
assertions
Auditor selects:
Entity-wide controls
Reduce number of control activities selected
for testing
Transaction controls
Learning
5-76
EXHIBIT 5.9 - Linking Financial

Statement Assertions and Selecting
Controls to Test

Learning
5-77
Types of Controls and Examples of

Concepts Affecting Control Testing

Learning
5-78

Authorizatio
ns
Reconciliatio
ns
Reviews for unusual

transactions

Learning
5-79


Learning
5-80


Learning
5-81
First Approach to Testing

Controls
Take sample of customer orders and trace it
through the system to determine whether:
There was proper review of credit and
Credit authorization or denial was proper
Advantage - Most effective because it helps in

determining that the control worked
effectively
Requires documentation of all credit
applications and purchase orders required
Based on audit sampling
Learning
5-82
Second Approach to Testing

Controls
Taking a sample of recorded items and
tracing back to credit approval process
Provides evidence on proper credit
approval for all items presently recorded
Does not provide evidence as to whether
other items should have been approved
for credit, but had not been approved

Learning
5-83
Third Approach to Testing

Controls
Uses a computer audit program and
develops a print-out of account balances
exceeding their credit authorization
Cost-effective
Requires an inference about the control
Covers only the operation of the controls
related to the current account balances
100% evaluation of each item currently
recorded
Learning
5-84
Testing the Operating

Effectiveness
Auditor tests relevant principles of
components of:
Control environment
Risk assessment
Information and communication
Monitoring

Learning
5-85
Results of Tests of Controls For

financial statement audit
If control deficiencies are identified
Assess them to determine whether preliminary
control risk assessment should be modified
Record the implications for substantive procedures
If no control deficiencies are identified

Assess whether preliminary control risk
assessment is still appropriate
Determine extent that controls can provide
evidence on accuracy of account balances
Determine planned substantive audit procedures

Learning
5-86
Results of Tests of Controls For

financial statement audit
Determine how much assurance about
reliability of account balances can be
obtained from the effective operation of
controls
Within any audit, level of assurance will
vary across:
Accounts
Disclosures
Assertions
Learning
5-87
Discuss audit activities in Phase IV of the audit


Learning
Phase IV - Obtaining Substantive Evidence

about Accounts, Disclosures, and Assertions
Substantive procedures include:
Substantive analytical procedures
Tests of details of account balances
Considerations in determining appropriate

substantive procedures:
Source of potential misstatement
Extent and type of potential misstatement

Learning
5-89
EXHIBIT 5.12 - Factors Affecting

Substantive Procedures to be
Performed

Learning
5-90
Discuss audit activities in Phase V of the audit


Learning
Phase V - Completing the Audit

and Making Reporting
Decisions
Completing various review and
communication activities
Making a decision about what types of
opinions should be issued
Deciding on the appropriate opinion to be
issued
It can be based on financial statements and

internal control
It can be issued in one report or in two
separate reports
Learning
5-92
APPLY THE CONCEPTS RELATED TO THE AUDITORS
ASSESSMENT OF INTERNAL CONTROL DESIGN
EFFECTIVENESS, IMPLEMENTATION, AND OPERATING
EFFECTIVENESS

Learning
Management Assessment of
Controls
Factors considered in deciding whether to
categorize a deficiency as significant or not
Risk that is being mitigated and whether other
controls operate effectively
Materiality of related account balances
Nature of deficiency
Volume of transactions affected
Subjectivity of account balance that is subject
to control
Rate at which control fails to operate
Learning
5-94
Controls
Deficiency of segregation of duties
Did not rise to a significant deficiency or a
material weakness
Management decides to use this deficiency
as a motivation to centralize purchases

Learning
5-95
Controls
Deficiency of lack of approval considered
as a significant deficiency based on the
following rationale:
Major departure from an approved process
Could lead to purchase of unauthorized
goods
Could be shipped elsewhere and lead to
material misstatement in financial
statements
Learning
5-96
Auditor Assessment of Controls

Auditor reviews:
Managements documentation of its internal
control
Managements evaluation and findings
related to internal control effectiveness
Auditor then gathers evidence on operating

effectiveness of these controls
By taking a random sample auditor needs to
independently determine that the controls
are working or not
Learning
5-97
Auditor Assessment of Controls

Implications for substantive procedures in
financial statement audit:
Auditor will do limited testing of inventory
quantities at year end
Auditor will assess year-end inventory for
potential obsolescence
Auditor will continue to examine all
adjusting entries at the end of the year

Learning
5-98

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AUDITING

Copyright 2014 South-Western/Cengage

Identify and compare the various auditing

Describe the assertions that are inherent to

Discuss audit activities in Phase II of the

Copyright 2014 South-Western/Cengage

Apply the concepts related to the

Copyright 2014 South-Western/Cengage

THE AUDIT OPINION

Copyright 2014 South-Western/Cengage

PROFESSIONAL JUDGMENT IN CONTEXT Importance of Adhering to Professional

PROFESSIONAL JUDGMENT IN CONTEXT Importance of Adhering to Professional

PROFESSIONAL JUDGMENT IN CONTEXT Importance of Adhering to Professional

What audit activities are conducted during

Copyright 2014 South-Western/Cengage

Identify and Compare the Various Auditing

Copyright 2014 South-Western/Cengage

Professional Auditing Standards

Common objective - Provide assurance to public

Professional Auditing Standards

Vary according to the nature of organization

AICPAS AUDITING STANDARDS

Each standard of Clarity format

Cross-references to the requirements

Auditing Standards Issued by

Copyright 2014 South-Western/Cengage

Auditing Standards Issued by

Each standard of Clarity format

For applicable terms included

Application and other explanatory

Explains what a requirement means or

Copyright 2014 South-Western/Cengage

Auditing Standards Issued by

Exhibit 5.1 - Comparison of U.S.

Copyright 2014 South-Western/Cengage

List and Discuss the Foundational Principles

Copyright 2014 South-Western/Cengage

PCAOB Guidance - General

Audit to be conducted with professional care

PCAOB Guidance - Fieldwork

Obtain audit evidence by performing audit

Copyright 2014 South-Western/Cengage

PCAOB Guidance - Reporting

AICPA Guidance - Purpose and

AICPA Guidance Responsibilities

Copyright 2014 South-Western/Cengage

AICPA Guidance - Performance

Requires an auditor to:

Plan and supervise work

Copyright 2014 South-Western/Cengage

AICPA Guidance - Reporting

Copyright 2014 South-Western/Cengage

Copyright 2014 South-Western/Cengage

Auditing in Practice - Benefits

List the Phases and Related Activities in the

Copyright 2014 South-Western/Cengage

EXHIBIT 5.2 - OVERVIEW OF CLIENTS PREPARATION

Copyright 2014 South-Western/Cengage

Exhibit 5.3 - Activities of each Phase of

Copyright 2014 South-Western/Cengage

Important Concepts Affecting Audit

Copyright 2014 South-Western/Cengage

Explain the Concept of Accounting Cycles and

Copyright 2014 South-Western/Cengage