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Gleim Exam Questions and ExplanationsUpdates to Auditing

17-1 Edition, 1st PrintingSeptember 9, 2011

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Appendix A, Subunit Cross-References to Auditing Textbooks

Pages 579 through 586, Auditing Textbooks: The auditing textbook cross references have been updated.

AUDITING TEXTBOOKSArens, Elder, and Beasley, Auditing and Assurance Services: An Integrated Approach, Fourteenth

Edition, Prentice Hall, Inc., 2011.

Boynton and Johnson, Modern Auditing: Assurance Services and the Integrity of Financial Reporting, Eighth Edition, John Wiley & Sons, Inc., 2005.

Guy, Carmichael, and Whittington, Audit Sampling: An Introduction, Fifth Edition, John Wiley & Sons, Inc., 2001.

Hooks, Auditing and Assurance Services: Understanding the Integrated Audit, First Edition, John Wiley & Sons, Inc., 2010.

Knechel, Salterio, and Ballou, Auditing: Assurance & Risk, Third Edition, South-Western, 2006.

Louwers, Ramsay, Sinason, Strawser, and Thibodeau, MP Auditing & Assurance Services, Fourth Edition, McGraw-Hill, Inc., 2010.

Messier, Glover, and Prawitt, Auditing & Assurance Services, Seventh Edition, McGraw-Hill, Inc., 2009.

OReilly, McDonnell, Winograd, Gerson, and Jaenicke, Montgomerys Auditing, Twelfth Edition, John Wiley & Sons, Inc., 1998.

Ricchiute, Auditing, Eighth Edition, South-Western, 2005.

Rittenberg, Johnstone, and Grambling, Auditing: A Business Risk Approach, Eighth Edition, South-Western, 2011.

Sawyer, Dittenhofer, and Scheiner, Sawyers Internal Auditing, Fifth Edition, The Institute of Internal Auditors, Inc., 2003.

Stuart, Auditing and Assurance Services: An Applied Approach, First Edition, McGraw-Hill/Irwin, 2011.

Whittington and Pany, MP Principles of Auditing & Assurance Services, Eighteenth Edition, McGraw-Hill, Inc., 2011.

Copyright 2011 Gleim Publications, Inc. and/or Gleim Internet, Inc. All rights reserved. Duplication prohibited. www.gleim.com

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Arens, Elder, and Beasley, Auditing and Assurance Services: An Integrated Approach, Fourteenth Edition, PrenticeHall, Inc., 2011.Part 1: The Auditing Profession

Chapter 1 - The Demand for Audit and Other Assurance Services 1.1-1.4Chapter 2 - The CPA Profession - SU 1Chapter 3 - Audit Reports - SU 16, SU 17, SU 19Chapter 4 - Professional Ethics 2.1-2.6Chapter 5 - Legal Liability - 2.7, 3.6, 3.7

Part 2: The Audit ProcessChapter 6 - Audit Responsibilities and Objectives - 1.2, 10.1 Chapter 7 - Audit Evidence - SU 10 Chapter 8 - Audit Planning and Analytical Procedures - 3.1-3.5, 4.1, 8.1 Chapter 9 - Materiality and Risk 3.3 Chapter 10 - Section 404 Audits of Internal Control and Control Risk - 5.1-5.3, 8.1, 8.2, 9.3, 9.4 Chapter 11 - Fraud Auditing - 3.3, 3.6, 3.7 Chapter 12 - The Impact of Information Technology on the Audit Process - 5.5, 6.6, 7.2, 7.3, 7.5, 7.6 Chapter 13 - Overall Audit Plan and Audit Program - SU 3, SU 4

Part 3: Application of the Audit Process to the Sales and Collection Cycle Chapter 14 - Audit of the Sales and Collection Cycle: Tests of Controls and Substantive Tests of Transactions -

SU 6, SU 11 Chapter 15 - Audit Sampling for Tests of Controls and Substantive Tests of Transactions - SU 15 Chapter 16 - Completing the Tests in the Sales and Collection Cycle: Accounts Receivable - 10.2, 11.1 Chapter 17 - Audit Sampling for Tests of Details of Balances - SU 15

Part 4: Application of the Audit Process to Other Cycles Chapter 18 - Audit of the Acquisition and Payment Cycle: Tests of Controls, Substantive Tests of Transactions,

and Accounts Payable - 7.1-7.3, 12.1 Chapter 19 - Completing the Tests in the Acquisition and Payment Cycle: Verification of Selected Accounts -

7.1-7.3, 12.1 Chapter 20 - Audit of the Payroll and Personnel Cycle - 7.4, 7.5, 13.5 Chapter 21 - Audit of the Inventory and Warehousing Cycle - 7.1, 7.2, 12.2 Chapter 22 - Audit of the Capital Acquisition and Repayment Cycle - 4.4, 7.6, SU 13 Chapter 23 - Audit of Cash Balances - 5.2, 11.2

Part 5: Completing the Audit Chapter 24 - Completing the Audit - SU 4, 9.1, 9.2, SU 14

Part 6: Other Assurance and Non-Assurance Services Chapter 25 - Other Assurance Services - SU 18, SU 19, 2.8, 2.9 Chapter 26 - Internal and Governmental Financial Auditing and Operational Auditing - SU 20, SU 21

Knechel, Salterio, and Ballou, Auditing: Assurance & Risk, Third Edition, South-Western, 2006.

Chapter 1 - Assurance and Auditing - SU 1, 2.8, 2.9Chapter 2 - Managing Risk: The Role of Auditing and Assurance - 3.1-3.4, 8.1, 23.5Chapter 3 - The Building Blocks of Auditing - 3.5, 10.1Chapter 4 - The Integrated Audit Process - 9.3Chapter 5 - Understanding the Clients Industry and Business: Strategic Analysis - SU 3Chapter 6 - Management of Strategic Risks: Business Processes and Controls - SU 3Chapter 7 - Risk Assessment and Internal Control - 3.3, SU 5, 8.1Chapter 8 - Evaluating Internal Controls over the Financial Reporting Process - SU 8Chapter 9 - Inquiry and Analytical Evidence - 3.5, SU 4, 10.1Chapter 10 - Evidence about Management Assertions: Linking Residual Risks to Substantive Tests - SU 10Chapter 11 - Audit Testing for the Sales and Customer Service Process - SU 6, SU 11Chapter 12 - Audit Testing for the Supply Chain and Production Process - SU 7, SU 12Chapter 13 - Audit Testing for Resource Management Processes - SU 7, SU 13Chapter 14 - Completing the Integrated Audit I: Business Measurement Analysis - SU 9, SU 14Chapter 15 - Completing the Integrated Audit II: Audit Reporting - SU 16, SU 17Chapter 16 - Interpreting Sample-Based Audit Evidence - SU 15Chapter 17 - The Ethical Auditor: Factors Affecting Auditor Decision Making - 2.1-2.5Chapter 18 - Audit and Assurance Services - 1.3, 1.4, SU 18, SU 19

Copyright 2011 Gleim Publications, Inc. and/or Gleim Internet, Inc. All rights reserved. Duplication prohibited. www.gleim.com

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Messier, Glover, and Prawitt, Auditing & Assurance Services, Seventh Edition, McGraw-Hill, Inc., 2009.

Part I: Introduction to Financial Statement AuditingChapter 1 - An Introduction to Assurance and Financial Statement Auditing - 1.1-1.4Chapter 2 - The Financial Statement Auditing Environment - 1.2, 1.5, 3.1

Part II: Basic Auditing Concepts: Risk Assessment, Materiality, and EvidenceChapter 3 - Risk Assessment and Materiality - 3.3Chapter 4 - Audit Evidence and Audit Documentation - SU 10

Part III: Planning the Audit and Understanding Internal ControlChapter 5 - Audit Planning and Types of Audit Tests - SU 3, SU 4Chapter 6 - Internal Control in a Financial Statement Audit - SU 5, SU 8Chapter 7 - Auditing Internal Control over Financial Reporting - 9.3, 9.4

Part IV: Statistical and Nonstatistical Sampling Tools for AuditingChapter 8 - Audit Sampling: An Overview and Application to Tests of Controls - 15.1, 15.2Chapter 9 - Audit Sampling: An Application to Substantive Tests of Account Balances - 15.1, 15.3, 15.4

Part V: Auditing Business ProcessesChapter 10 - Auditing the Revenue Process - SU 6, SU 11Chapter 11 - Auditing the Purchasing Process - 7.1-7.3, SU 12Chapter 12 - Auditing the Human Resource Management Process - 7.4, 7.5, 13.5Chapter 13 - Auditing the Inventory Management Process - 12.2Chapter 14 - Auditing the Financing/Investing Process: Prepaid Expenses, Intangible Assets, and Property,

Plant and Equipment - 7.6, 13.1Chapter 15 - Auditing the Financing/Investing Process: Long-Term Liabilities, Stockholders Equity, and Income

Statement Accounts - 7.6, 13.3, 13.4Chapter 16 - Auditing the Financing/Investing Process: Cash and Investments - 11.2, 13.2

Part VI: Completing the Audit and Reporting ResponsibilitiesChapter 17 - Completing the Audit Engagement - 9.1, 9.2, SU 14Chapter 18 - Reports on Audited Financial Statements - SU 16, SU 17, SU 19

Part VII: Professional ResponsibilitiesChapter 19 - Professional Conduct, Independence, and Quality Control 1.7, 2.1-2.6Chapter 20 - Legal Liability - 2.7

Part VIII: Assurance, Attestation, and Internal Auditing ServicesChapter 21 - Assurance, Attestation, and Internal Auditing Services - 2.8, 2.9, SU 18, SU 19, SU 21

Copyright 2011 Gleim Publications, Inc. and/or Gleim Internet, Inc. All rights reserved. Duplication prohibited. www.gleim.com

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Sawyer, Dittenhofer, and Scheiner, Sawyers Internal Auditing, Fifth Edition, The Institute of Internal Auditors, Inc., 2003.

Part 1: Introduction to Internal AuditingChapter 1 - The Nature of Internal Auditing - 21.1Chapter 2 - Control - 21.4

Part 2: Techniques of Internal AuditingChapter 3 - Risk Assessment - 21.5Chapter 4 - Preliminary Surveys - 21.5, 21.6Chapter 5 - Audit Programs - 21.6Chapter 6 - Field Work - I - 21.6Chapter 7 - Field Work - II - 21.6Chapter 8 - Audit Findings - 21.9Chapter 9 - Working Papers - 10.3, 21.7Chapter 10 - Control Self-assessment - 21.4

Part 3: Sampling and Analytical MethodsChapter 11 - Sampling - SU 15Chapter 12 - Analytical and Quantitative Methods - SU 22

Part 4: Data ProcessingChapter 13 - Information Systems Auditing - I - SU 22Chapter 14 - Information Systems Auditing - II - SU 22Chapter 15 - Information Systems Auditing - III - SU 22Chapter 16 - Using Personal Computers in Auditing - 10.4, SU 22

Part 5: ReportingChapter 17 - Reports - 21.9Chapter 18 - Audit Report Reviews and Replies - 21.9Chapter 19 - Reports to Executive Management and the Board - 21.9

Part 6: AdministrationChapter 20 - Establishing the Auditing Activity - 21.7Chapter 21 - Selecting and Developing the Staff -