ffirs.indd 2 10/7/2014 12:55:59 PM 5Wiley 1CPAexcel® 0 2EXAM REVIEW FOCUS NOTES ffirs.indd 1 10/7/2014 12:55:59 PM ffirs.indd 2 10/7/2014 12:55:59 PM 5Wiley 1CPAexcel® 0 EXAM REVIEW 2 F O C U S N OT E S AUDITING AND ATTESTATION ffirs.indd 3 10/7/2014 12:55:59 PM Cover Design by Wiley Cover image: © turtleteeth/iStockphoto Copyright © 2015 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: 978-1-118-91775-6 (paperback); 978-1-119-05165-7 (ebk); 978-1-119-05172-5 (ebk) Printed in the United States of America 10 9 8 7 6 5 4 3 2 1 ffirs.indd 4 10/7/2014 12:55:59 PM CONTENTS Preface vii About the Author ix About the Contributor ix Module 1: Professional Responsibilities 1 Module 2: Engagement Planning, Obtaining an Understanding, and Assessing Risks 32 Module 3: Understanding Internal Control and Assessing Control Risk 63 Module 4: Responding to Risk Assessment: Evidence Accumulation and Evaluation 95 Module 5: Reporting 156 Module 6: Accounting and Review Services 231 Module 7: Audit Sampling 247 Module 8: Auditing with Technology 263 Index 271 v ftoc.indd 5 9/30/2014 10:14:21 PM ftoc.indd 6 9/30/2014 10:14:21 PM PREFACE This publication is a comprehensive, yet simplified study program. It provides a review of all the basic skills and concepts tested on the CPA exam and teaches important strategies to take the exam faster and more accurately. This tool allows you to take control of the CPA exam. This simplified and focused approach to studying for the CPA exam can be used: (cid:114)(cid:1) As a handy and convenient reference manual (cid:114)(cid:1) To solve exam questions (cid:114)(cid:1) To reinforce material being studied Included is all of the information necessary to obtain a passing score on the CPA exam in a concise and easy-to-use format. Due to the wide variety of information covered on the exam, a number of techniques are included: (cid:114)(cid:1) Acronyms and mnemonics to help candidates learn and remember a variety of rules and checklists (cid:114)(cid:1) Formulas and equations that simplify complex calculations required on the exam (cid:114)(cid:1) Simplified outlines of key concepts without the details that encumber or distract from learning the essential elements vii fpref.indd 7 9/30/2014 10:12:04 PM (cid:114)(cid:1) Techniques that can be applied to problem solving or essay writing, such as preparing a multiple-step income statement, determining who will prevail in a legal conflict, or developing an audit program (cid:114)(cid:1) Pro forma statements, reports, and schedules that make it easy to prepare these items by simply filling in the blanks (cid:114)(cid:1) Proven techniques to help you become a smarter, sharper, and more accurate test taker This publication may also be useful to university students enrolled in Intermediate, Advanced and Cost Accounting; Auditing, Business Law, and Federal Income Tax classes; or Economics and Finance Classes. Good luck on the exam, Ray Whittington, PhD, CPA Preface viii fpref.indd 8 9/30/2014 10:12:04 PM