All the Information You Need to Master the 2018 CPA Exam
The Wiley CPAexcel Study Guides four–volume set, fully updated for the 2018 CPA Exam, reviews all four parts of the exam. The Study Guides provide the detailed information candidates need to master or reinforce tough topic areas. Content is organized into Bite–Sized Lessons that map perfectly to the Wiley CPAexcel online course. The books are designed to supplement the online course but may also be used as a stand–alone study tool.
- Detailed text covers the complete AICPA content blueprint
- Organized in Bite–Sized Lesson format
- Maps perfectly to the Wiley CPAexcel online course
- Explains every topic tested
- Used by leading review providers
Titles in the WILEY CPAexcel EXAM REVIEW STUDY GUIDE 2018 FOUR–VOLUME SET:
Auditing and Attestation Business Environment and Concepts Financial Accounting and Reporting Regulation
Table of Contents
About the Authors ix
About the Auditing and Attestation Professors x
Welcome to Auditing and Attestation xi
Ethics, Professional Responsibilities, and General Principles 1
AICPA Code of Professional Conduct 2
Introduction and Preface 2
Members in Public Practice 5
MIPPs Introduction and Conceptual Framework 5
MIPPs Nonindependence Rules 7
Conflicts of Interest, Directorships, and Gifts 7
Reporting Income and Subordination of Judgment 9
Advocacy, Third–Party Service Providers (TSPs), General Standards, and Accounting Principles 10
Discreditable Acts 12
Fees 14
Advertising and Confidentiality 16
Form of Organization and Names 18
MIPPs Independence Rules 20
Introduction to MIPPs Independence Rules 20
Network Firms and Affiliates 22
Reissues, Engagement Letters, ADR, and Unpaid Fees 24
Financial Interests 25
Overview and Unsolicited Financial Interests 25
Mutual Funds and Retirement Plans 27
Partnerships, 529s, Trust and Estates, Employee Benefit Plans 29
Depository Accounts, Brokerage Accounts, and Insurance Policies 31
Loans, Leases, and Business Relationships 32
Family Relationships 34
Employment Relationships 36
Current Employment 36
Subsequent Employment 38
Other Associations and Relationships 40
Nonaudit Services 42
Code Provisions 42
Specific Services 45
Members in Business 51
Other Members 54
Requirements of SEC and PCAOB 55
Securities and Exchange Commission (SEC) 55
Public Company Accounting Oversight Board (PCAOB) 61
Requirements of GAO and DOL 64
Government Accountability Office (GAO) 64
Department of Labor (DOL) 72
Assessing Risk and Developing a Planned Response 75
Financial Statement Audits 76
Accounting vs. Auditing 76
GAAS and Principles 78
Professional Standards 80
Quality Control Standards (SQCS) 82
Overview of Audit Process 84
Overview of Auditor s Report 85
Different Types of Engagements 89
PCAOB Responsibilities 90
PCAOB on Engagement Quality Review 92
Planning Activities 94
Pre–Engagement Planning Issues 94
Planning and Supervision 99
Materiality 101
Audit Risk 103
Analytical Procedures 106
Detecting Fraud 108
Fraud: Evaluation and Communication 113
Detecting Illegal Acts 115
Using the Work of a Specialist 117
Required Communications with Those Charged with Governance 120
PCAOB on Communications with Audit Committees 123
Internal Control Concepts and Standards 126
Obtaining an Understanding of Internal Control 126
Evaluating Internal Control 128
Assessing Control Risk Under AICPA Standards 131
Performing Procedures in Response to Assessed Risks 135
Required Communications 138
Using the Work of an Internal Audit Function 141
Performing Further Procedures and Obtaining Evidence 145
Internal Control: Transaction Cycles 146
Specific Transaction Cycles 146
Revenue/Receipts Sales 148
Revenue/Receipts Cash 150
Expenditures/Disbursements 152
Payroll Cycle 155
Miscellaneous Cycles 157
Audit Evidence: Concepts and Standards 159
Overview of Substantive Procedures 159
The Nature of Evidence 163
Assertions and Types of Audit Procedures 167
PCAOB Risk Assessment Audit Standards 170
Evaluation of Misstatements Identified During the Audit 174
Audit Documentation 176
PCAOB on Audit Documentation 180
Confirmation 182
Accounting Estimates 184
Fair Value Estimates 186
Lawyer s Letters 188
Management Representations Letters 191
Related–Party Issues 194
PCAOB on Related Parties 197
Subsequent Events and Related Issues 200
Going Concern Issues 203
Audit Evidence: Specific Audit Areas 207
Introduction to Auditing Individual Areas 207
Cash 209
Accounts Receivable 212
Inventory 214
Investments in Securities and Derivative Instruments 217
Fixed Assets 220
Current Liabilities 221
Long–Term Liabilities 223
Stockholders Equity 224
Payroll 225
Audit Sampling 227
Introduction to Sampling 227
Attributes Sampling 229
Variables Sampling 231
Probability–Proportional–to–Size (PPS) Sampling 235
Example Problems 237
Difference Estimation Problem 237
Difference Estimation Solution 238
Ratio Estimation Problem 239
Ratio Estimation Solution 240
MPU Estimation Problem 241
MPU Estimation Solution 242
PPS Sampling Problem 243
PPS Sampling Solution 244
IT (Computer) Auditing 245
IT Controls General Controls 245
IT Controls Application Controls 247
IT Evidence–Gathering Procedures 249
Other IT Considerations 251
Forming Conclusions and Reporting 253
Audit Reports 254
Introduction to Audit Reports 254
PCAOB on Audit Reports 261
Audits of Group Financial Statements 263
Emphasis–of–Matter Paragraphs and Other–Matter Paragraphs 267
Qualified for Scope Limitation 270
Qualified for Misstatement 273
Adverse Opinion 275
Disclaimer of Opinion 277
Consistency of Financial Statements 280
PCAOB on Evaluating Consistency of Financial Statements 282
Opening Balances Initial Audits 284
Other Information Along with Financial Statements 288
Supplementary Information Related to Financial Statements 290
Required Supplementary Information 292
PCAOB on Auditing Supplemental Information 294
Alert to Restrict Report 297
Financial Statements Using Another Country s Framework 299
Reporting on Summary Financial Statements 301
Interim Financial Information 304
Sample Reports 309
Unmodified Opinion (Reference to Legal Requirements) 309
Unmodified Opinion (No Reference to Legal Requirements) 311
Unmodified Opinion (Sentence by Sentence) 313
Unmodified in Current Year, Balance Sheet in Prior Year 315
Unmodified in Prior Year, Qualified in Current Year 317
Qualified for Scope 319
Qualified for Material Misstatement 321
Qualified for Inadequate Disclosure 323
Adverse Opinion 324
Disclaimer of Opinion for Scope 326
Unmodified on B/S, Disclaimer on I/S and Cash Flows 327
Emphasis–of–Matter Paragraph 329
Other–Matter Paragraph 331
Reference to Component Auditor 333
Single Financial Statement 334
Specific Element (Special Purpose Framework) 335
Incomplete Presentation 336
Application of Accounting Principles (Second Opinion) 337
Report on Summary Financial Statements 338
Review Report on Interim Financial Statements 339
Other Reports 340
Reports on Application of Requirements of Framework 340
F/S with Special Purpose Frameworks 343
Audits of Single F/S and Specific Elements, Accounts, or Items 346
Reporting on Compliance with Requirements in an F/S Audit 349
Service Organizations User Auditors 353
Service Organizations Service Auditors 355
Comfort Letters 358
Government Auditing Standards 363
Compliance Audits 367
SSARSs General Principles 370
SSARSs Preparation of Financial Statements 373
SSARSs Compilation Engagements 375
SSARSs Review Engagements 379
SSARSs Other Topics 383
Sample Reports 387
F/S Prepared on Cash Basis 387
F/S Prepared on Regulatory Basis (for General Use) 388
Profit Participation 390
Sample Review Report on Financial Statements 391
Sample Compilation Report on Financial Statements 392
Separate Report on Compliance (No Instances of Noncompliance) 393
Separate Report on Compliance (with Noncompliance Identified) 394
Combined Report on Audited Financial Statements and Compliance Issues 395
Other Professional Services 397
AICPA on Reporting on Internal Control in an Integrated Audit 397
PCAOB on Reporting on Internal Control in an Integrated Audit 407
PCAOB on Reporting Whether a Previously Reported Material Weakness Continues to Exist 413
Auditing Employee Benefit Plans 416
Introduction to Attestation Standards 421
Attestation Standards Common Concepts 424
Examination Engagements 427
Examination Reports 431
Review Engagements 435
Review Reports 438
Agreed ]Upon Procedures Engagements 442
Prospective Financial Information 447
Pro Forma Financial Information 454
Compliance Attestation 459
Management s Discussion and Analysis (MD&A) 463
Assurance Services 467
Sample Reports 469
Examination of Forecast 469
AUP of Forecast 470
Compilation of Forecast 471
Examination of Pro Forma 472
Review of Pro Forma 473
Examination for Compliance 474
AUP for Compliance 475
Example Management Report (with No Material Weaknesses Reported) 476
Unmodified Opinions on Financial Statements and ICFR (Combined Report) 477
Unmodified Opinion on ICFR (Separate Report on ICFR) 479
Adverse Opinion on ICFR (Separate Report on ICFR) 481
Examination of MD&A 483
Review of MD&A 484
Index 485
