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Lecture Notes for Auditing and Assurance Services, 17th Edition

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    ACL Installation and Instructions INTRODUCTION ACL is generalized audit software used by auditors to extract and analyze data on client’s computerized systems. Generalized audit software is discussed on pages 329 and 398 of the text. The ACL Problems included in selected chapters (Chapters 7, 8, 10, 12, 14, 15, 16 and 17) are intended to provide you with an introduction to ACL. An in - depth study of its use is beyond the scope of most first auditing courses. The guidance provided in this Append ix is intended only to help you solve the problems in the text. Downloading ACL Complete the following steps to access the ACL software: 1. Visit the ACL Academic Network page for Professors at https://info.acl.com/Academic - Network - for - Professors.html 2. Sign up for the ACL Academic Network. 3. You will receive two emails: the first explains your software entitlement and the second will contain instructions on how to activate the user account and set a password. Access to ACL software expires after six months. 4. More information on the ACL Academic Network for Students can be found here: https://info.acl.com/Academic - Network - for - Students.html Note that ACL is only compatible with the following versions of Windows: Windows 10, Windows 8.1, and Windows 7. Additional support can be found at the ACL websites: Analytics installation: https://help.highbond.com/helpdocs/analytics/14/user - guide/en - us/Content/administration/home.htm . GRC quick start: https://help.highbond.com/helpdocs/projects/current/user - guide/en - us/Content/projects/quick_start/Projects_quick_start.html?cshid=pm - pm - quick - start Opening ACL An icon to open ACL should be on your desktop after installation. If it does not appear, then go to Windows Start and select “Programs” to then locate the ACL link. Select the ACL link to launch the software. Finding Companies, Tables, and Using Commands The main ACL screen should appear when you open the ACL software. Look at that screen now. On that screen, you will see a choice to create a new analytic project or open an analytic project. Click on the link for “Open Analytic Project.” Within the “Sample Files” you will see three projects listed. The ACL assignments in the text use only two of these projects: ACL_Rockwood and ACL_Cypress_Pcards. Both of these projects have several folders and files within those folders, which ACL calls tables. You will first double - click on a project to identify the folders, which will appear in the left side o f your screen window once you double - click on the project folder. ( Note: When you open ACL again, any

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    projects you have accessed will appear under “Recent Analytics Files” and can be accessed using those links.) Note: From now on, when you see italics it means you should use your computer to follow an instruction. The arrow sign ( → ) indicates an additional action to be taken. Double - Click ACL_Rockwood to open the folders under ACL_Rockwood → Click the plus sign next to the payroll folder to view the available tables. Observe that there are now three tables available in the payroll folder. Double click Payroll_details and observe that a typical ACL table labeled Payroll_details for payroll transactions opens. On the bottom row of that screen, the number of records in the table is listed (5,801). The table includes columns with titles and data in each column. That is the information that auditors verify using various commands. Click the top of the Net pay column on the table (make sure the column is now all highlighted ) → Go to the Windows drop - down options at the top of the screen and select “Analyze” (on the Menu bar) → Under “Analyze,” select “Total” (on the drop - down list). The amount shown on the screen should be 7,466,987.20. You just used an ACL command (Total) to calculate the total of the net pay amounts in the table. That sure beats using a calculator or reentering the data in Excel. Click the small x next to the Total tab to close that window and return to the Payroll_details table. → Click the small x next to the Payroll_details tab to close the Payroll_details table. ACL_Rockwood Project” will still be open on the left side of the screen. → Click the large X to exit ACL. You will use the remainder of this material to help you answer the assigned questions in the text. The first three functions (Quick Sort, Filters, and Computed Fields) are not considered ACL commands. The remaining functions included here are all ACL commands. You will use these commands in ACL homework problems that are i ncluded in selected chapters. The descriptions below provide a brief overview of the functions that will be used to complete those problems. Within each ACL homework problem in the text, you will see the commands needed to answer the problem listed within parentheses in that problem. Quick Sort Used to sort data in any field, either from lowest to highest or vice versa. 1. Click on the column heading of the field you want to sort. 2. Right click on the top of the column to find the → Quick Sort Ascending or Quick Sort Descending. (You can right click Quick Sort Off to undo the sort.)

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    Filters Used to ask questions of data in a table without adding a new field. 1. Click the Edit View Filter button in the row above the column headings to enter the Edit view filter window. 2. Use the Expression box to build an expression. 3. The Expression box is where you build filters using the available fields in the current table, as well as the operators (=, < >, AND, etc.). There are three components to a filter: (1) field, (2) operator, and (3) a numeric value, character value, or date. 4. In the Available Fields portion of the window, double - click the name of the field for which you are building a filter. Notice that the field name is inserted in the Expression box. 5. Use the operator buttons (=, +, <, >, etc.) and the numeric keypad on the keyboard to build the filter. Note: If you are performing a recalculation to determine if the original calculation already in the data table is correct, use <> as the operator with no spaces between the less than and greater than signs. 6. Enter an appropriate string or value after the operator. Use the following guidelines: • Numeric values — enter as a number with no commas or dollar signs. For example, to enter $1,000, type 1000. • Character values — enclose with one or two quotations. For example, to enter department D10, type “D10” or ‘D10’. Use the same case as is used in the data field. • Dates — click on the Date & Time button located just below the mathematical operators to open the Date & Time Selector box. Click the drop - down arrow to enter the monthly calendar box. Select the date, then click OK. 7. For more complex filters, use the AND, OR, or NOT operators and repeat the preceding process for each portion of the filter. After selecting an AND, OR, or NOT, it is necessary to repeat all three components [(1) field, (2) operator and (3) a numeric value, character value, or date] of the filter. 8. An example of an expression to select all gross pay amounts greater than $1,000 for employee number 0000124921 from the Payroll_details table is as follows: employee_number = “0000124921” AND gross_pay > 1000 9. Cli ck OK to complete the filter. 10. If you want to change the filter, click again to return to the Edit view filter window. Make changes in the filter and click OK. 11. You can also apply additional commands to a filtered table until you remove the filter. 12. Click the Remove Filter button after you have completed all additional tests on the filtered table to return to the unfiltered table. Computed Fields Used to ask questions of data in a table by adding a new field. The new field is derived from calculations using other fields in the table. 1. Click Edit → Table Layout to open the Layout Options window.

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    2. Select the “Edit Fields/Expressions” tab folder on the top row of the Layout window. 3. Click the Add a New Expression button , which is the third button down on the left side of the window under the “Edit Fields/Expressions” tab. (You may need to expand the window to see the .) 4. Add a name for the computed field in the Name box that describes the new column. Also add a column title in the Alternative Column Title box, which will appear in the Table after you complete the new field. 5. Click the Expression button , which is located to the right of the Name box to open the Expression box. 6. Build an expression in the expression box in the same way as for filters. For example, assume you want to independently calculate the net pay. Enter “Recalc Net Pay” in the Name box and in the Alternative Column Title box and in the Expression builder box build an expression by double - clicking on “gross_pay”, “ - ”, and “deducations” in the Available Fields box to build the following expression (note that the field name for deductions is misspelled as “deducations”): gross_pay – deductions 7. After building the expression, click OK to return to the original table layout window. 8. Click the Accept Entry button on the top left of the screen to save the new computed field. 9. The new field can be added to the table view by completing the following steps: • Close the Edit Fields/Expressions window if it is still open. • Return to the data table which contains all the data for the file you are examining. Place the cursor in the column heading to the right of where you want the new computed field to appear in the table view. • Right Click and then click Add Columns from the drop - down menu. • Double - click on the name of the new computed field you just created. • Click OK. The new computed field now appears in the table view. Age Command Used to accumulate data in a table by age, usually for accounts receivable. 1. Click Analyze → Age to open the Age window. 2. Use the Age On drop - down arrow to select the date field you want to run the Age command on 3. In the Subtotal Fields portion of the command dialog, click on the name of the numeric field you want to list for each aging interval. 4. Enter a date in the Cutoff Date box using the calendar. This date is used to calculate the aging. It is typically the client’s year - end date. 5. Click OK to run the Age command. Classify Command Used to count and aggregate the number and percentage of records for each value of a character field and to subtotal the numeric fields for the field. 1. Click any cell in a column for any character field you want summarized. (Do not click the column heading.) 2. Click Analyze → Classify, then select the field you want to classify on. Next click on the quantity field in the Subtotal Field that you want summarized.

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    3. Click OK. Count Command Used to count records in a table that you have filtered. (For a table that has not been filtered, the record count is indicated at the bottom of the open table.) After a filter is applied to a table, observe that there is now a ?/ in the lower left corner that replaces the original count. 1. Click Analyze → Count. 2. Click OK. The new count replaces ?/ in the lower left corner. Duplicates Command Used to detect duplicates in the sequence of numbers in a table, usually document numbers. 1. Click on the column heading for the document numbers you want to test for duplicates. 2. Click Analyze → Duplicates. 3. The result is a list of duplicates if any exist. When prompted click on OK and type any output file name such as “Duplicates.” (You can change the radio button from “file” to “screen” under the output tab if you want to see the output on your screen and not save it to a file.) Gaps Command Used to detect gaps in the sequence of numbers in a table, usually document numbers. 1. Click on the column heading for the document numbers you want to test for gaps. 2. Click Analyze → Gaps. The result is a table of gaps if any exist. Statistics Command Used to identify characteristics in client data files to better understand the data being audited. 1. Click Analyze → Statistics to open the Statistics window. 2. Select the numeric or date field(s) you want to generate statistics on by clicking on the line(s) containing the field name(s). Use the Shift or Control key to select more than one field. 3. Click OK to run the command. Stratify Command Used to accumulate stratification of numeric information in a field. 1. Select the field on which you intend to stratify. Use Quick Sort to identify large and small population items you want to exclude from the stratification. 2. Click Analyze → Stratify to open the Stratify window. 3. Use the Stratify On drop - down arrow to choose the name of the field you want to stratify. 4. Enter the minimum and maximum values in the minimum and maximum boxes with no dollars or commas and the number of intervals (the default is 10). You can also highlight the entire column and click Analyze → Stratify to stratify without having to enter values. 5. Click OK to run the Stratify command. Summarize Command Used to count records and accumulate numeric amounts for a character or date field.

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    1. Click Analyze → Summarize to open the Summarize window. 2. In the Summarize On portion of the window, click on the field you want to summarize on . For example, in the Payroll_details table in the ACL_Rockwood Project, if you want the total amount of gross pay for each employee, you would summarize on employee number. Click on the Summarize On dropdown arrow and click on “employee_number” in the Name column . 3. In the Subtotal Fields portion of the window, click on the name of the numeric field you want to accumulate for each summary category (for example, gross pay) . 4. Click OK and when prompted to enter an output file name type any name for the file you are summarizing such as “Pay_by_employee.” 5. Click OK for a new table. Total Command Used to total one or more data fields for a table. 1. Click on the column heading for the column you want to total. 2. Click Analyze → Total to obtain a total. Sampling Command Used to perform sampling for transactions or balances. First select "Record/Monetary Unit Sampling" (you can also select "Classical Variables Sampling" which is not illustrated in these examples). To determine sample size: 1. Click Sampling → Calculate Sample Size from the menu bar. 2. Select the Monetary radio button to determine an MUS sample size; select the Record radio button to determine a sample size for records. 3. Input the sampling parameters and select Calculate. The sample size and sampling interval will appear below the calculate bar. To select a sample: 1. Click Sampling → Sample. 2. Select the Record radio button to sample records. Select the fixed interval or random radio button. • For random selection, input the sample size and indicate the output file name. (You can also indicate a random seed number, but it is not required.) • For fixed interval selection, indicate the size of the sampling interval and output file name. (You can also indicate a random seed number, but it is not required.) 3. Select the MUS radio button to select an MUS sample. Also indicate the monetary amount field to be sampled from. Select the fixed interval or random radio button. • For random selection, input the sample size and population size and indicate the output file name. (You can also indicate a random seed number, but it is not required.) • For fixed interval selection, indicate the size of the sampling interval and output file name. (You can also indicate a random seed number, but it is not required.) Note: The evaluation of sample errors is not illustrated.

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    v Course Approach Suggestions The purpose of the Instructor ’ s Resource Manual is to help you teach auditing and other assurance services courses more efficiently. Naturally, we do not want to interfere with your present approach or imply that our suggestions are the only good alternatives. This resource manual has several parts:  Illustrative schedules for one - quarter and one - semester courses.  Term projects we have successfully used.  Chapter - by - chapter s uggestions for teaching the content in each chapter. The suggestions for each chapter include the following:  Ideas we find useful in teaching introductory auditing.  Homework problems we use most often.  A matrix illustrating how learning objectives correlate with chapter problem material. The matrix for each chapter is designed to provide a one - page summary of this information in order to assist you in assigning problem material.  Overhead masters containing ideas we like to emphasize in class that can be projected using a document camera or transparency machine . These are labeled “ OH ” in the back of the teaching notes for each chapter. The overhead masters can also be downloaded from the Instructor ’ s Resource Center ( www.pearsonhighered.com/arens). We find that use of the overheads, especially the ones that require student responses, are an excellent way to involve students. We use the overheads in conjunction with the PowerPoint slides to help vary the course approach. Many of the chapter figures and tables are included in the PowerPoint slides for the respective chapters. Note that the Image Gallery posted at the Instructor ’ s Resource Center contains every table, graph, and piece of art from the textbook. You can use the items in the Image Gallery to create additional PowerPoint presentations or overhead transparencies . Many of the key figures and tables have already been included on PowerPoint slides . The chapters are designed so that their arrangement and selection provides maximum flexibility in course design. Suggested Syllabi In this section, we provide a possible schedule for use in a one - quarter course and in a one - semester course. We also provide suggested problem assignments that could easily be presented in your syllabus. Following these sample syllabi, we briefly overview other teaching materials that you might find helpful as you develop your plan for coverage of the course content.

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    vi One - Quarter Schedule (assumes two 75 - minute sessions per week) WEEK NO. CONTENTS CORRESPONDING CHAPTER IN TEXT 1 Introduction The demand for audit and other assurance services The CPA profession Audit reports Chapter 1 Chapter 2 Chapter 3 2 Audit responsibilities and objectives Audit evidence Chapter 6 Chapter 7 3 Audit planning and materiality Assessing the risk of material misstatement Chapter 8 Chapter 9 4 Assessing and responding to fraud risks Internal control and COSO framework Chapter 10 Chapter 11 5 Assessing control risk and reporting on internal controls Midterm examination Chapter 12 Midterm 6 Overall audit strategy and audit program Audit of the sales and collection cycle: tests of controls and substantive tests of transactions Chapter 13 Chapter 14 7 Accounts receivable: tests of details of balances Audit sampling for tests of controls and substantive tests of transactions Chapter 16 Chapter 15 8 Audit sampling for tests of controls and substantive tests of transactions (cont.) Completing the audit Chapter 15 Chapter 24 9 Audit reporting – other assurance reports Professional ethics Chapter 25 Chapter 4 10 Legal liability Internal and governmental financial auditing and operational auditing Chapter 5 Chapter 26

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    vii One - Semester Schedule (assumes two 75 - minute sessions per week) WEEK NO. CONTENTS CORRESPONDING CHAPTER IN TEXT 1 Introduction The demand for audit and other assurance services The CPA profession Audit reports Chapter 1 Chapter 2 Chapter 3 2 Professional ethics Legal liability Chapter 4 Chapter 5 3 Audit responsibilities and objectives Audit evidence Chapter 6 Chapter 7 4 Audit planning and materiality Assessing the risk of material misstatement Chapter 8 Chapter 9 5 Assessing the risk of material misstatement (cont.) Midterm examination #1 Chapter 9 Midterm #1 6 Assessing and responding to fraud risks Internal control and COSO framework Chapter 10 Chapter 11 7 Assessing control risk and reporting on internal controls Overall audit strategy and audit program Chapter 12 Chapter 13 8 Audit of the sales and collection cycle: tests of controls and substantive tests of transactions Accounts receivable: tests of details of balances Chapter 14 Chapter 16 9 Audit sampling for tests of controls and substantive tests of transactions Audit sampling for tests of details of balances Chapter 15 Chapter 17 10 Audit sampling for tests of details of balances (cont.) Midterm examination #2 Chapter 17 Midterm #2 11 Audit of the acquisition and payment cycle Completing tests in the acquisition and payment cycle Chapter 18 Chapter 19 12 Audit of cash and financial instruments Completing the audit Chapter 23 Chapter 24 13 Audit reporting – completion and other assurance services reports Chapter 3 Chapter 25 14 Internal and governmental financial auditing and operational auditing Chapter 26

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    viii One - Quarter Assignment Schedule SESSION SUBJECT READING ASSIGNMENT (CHAPTER) PROBLEM ASSIGNMENT 1 Introduction, audit and assurance services, and the CPA profession 1 and 2 1 - 1 7 , 1 - 1 8 , 2 - 19 , 2 - 20 2 Audit reports 3 3 - 2 3 , 3 - 2 6 , 3 - 2 7 3 Audit responsibilities and objectives 6 6 - 2 6 , 6 - 30 , 6 - 3 3 , 6 - 3 4 , 6 - 35 4 Audit evidence 7 7 - 2 6 , 7 - 2 7 , 7 - 30 , 7 - 3 6 , 7 - 38 5 Audit planning and materiality 8 8 - 2 7 , 8 - 3 1 , 8 - 3 4 , 8 - 37 , 8 - 39 6 Assessing the risk of material misstatement 9 9 - 29, 9 - 31 , 9 - 3 4 , 9 - 3 7 , 9 - 38, 9 - 40 7 Assessing and responding to fraud risks 10 10 - 2 2 , 10 - 2 3 , 10 - 33 , 10 - 3 4 , 10 - 3 5 8 Internal control and COSO framework 11 11 - 23, 11 - 24, 11 - 25 9 Assessing control risk and reporting on internal controls 12 12 - 2 1 , 12 - 2 3 , 12 - 29, 12 - 3 5 , 12 - 3 7 10 Midterm Midterm 11 Overall audit strategy and audit program 13 13 - 2 5 , 13 - 30 , 13 - 32 , 13 - 3 3 , 13 - 3 7 12 Audit of the sales and collection cycle: tests of controls and substantive tests of transactions 14 14 - 2 5 , 14 - 2 6 , 14 - 30 , 14 - 3 2 , 14 - 3 6 13 Accounts receivable: tests of details of balances 16 16 - 2 4 , 16 - 2 8 , 16 - 2 9 , 16 - 3 3 , 16 - 3 9 14 Audit sampling for tests of controls and substantive tests of transactions 15 15 - 3 1 , 15 - 3 2 , 15 - 3 8 15 Audit sampling for tests of controls and substantive tests of transactions (cont.) 15 15 - 3 9 16 Completing the audit 24 24 - 2 5 , 24 - 2 7 , 24 - 31 17 Audit reporting – completion 25 25 - 2 3 , 25 - 2 5 , 25 - 29 18 Professional ethics 4 4 - 2 2 , 4 - 2 3 , 4 - 2 4 , 4 - 31 19 Legal liability 5 5 - 2 1 , 5 - 2 4 , 5 - 2 8 20 Internal and governmental financial auditing and operational auditing 26 26 - 19 , 26 - 2 2

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    ix One - Semester Assignment Schedule SESSION SUBJECT READING ASSIGNMENT (CHAPTER) PROBLEM ASSIGNMENT 1 Introduction, audit and assurance services, and the CPA profession 1 and 2 1 - 1 7 , 1 - 1 8 , 2 - 19 , 2 - 20 2 Audit reports 3 3 - 2 3 , 3 - 2 6 , 3 - 2 7 3 Professional ethics 4 4 - 2 2 , 4 - 2 3 , 4 - 2 4 , 4 - 31 4 Legal liability 5 5 - 2 1 , 5 - 2 4 , 5 - 2 8 5 Audit responsibilities and objectives 6 6 - 2 6 , 6 - 30 , 6 - 3 3 , 6 - 3 4 , 6 - 35 6 Audit evidence 7 7 - 2 6 , 7 - 2 7 , 7 - 30 , 7 - 3 6 , 7 - 38 7 Audit planning and materiality 8 8 - 2 7 , 8 - 3 1 , 8 - 3 4 , 8 - 37 , 8 - 39 8 Assessing the risk of material misstatement 9 9 - 29, 9 - 31 , 9 - 3 4 9 Assessing the risk of m ateriality misstatement (cont.) 9 9 - 3 7 , 9 - 38, 9 - 40 10 Midterm #1 Midterm #1 11 Assessing and responding to fraud risks 10 10 - 2 2 , 10 - 2 3 , 10 - 33 , 10 - 3 4 , 10 - 3 5 12 Internal control and COSO framework 11 11 - 23, 11 - 24, 11 - 2 5 13 Assessing control risk and reporting on internal controls 12 12 - 2 1 , 12 - 2 3 , 12 - 29, 12 - 3 5 , 12 - 3 7 14 Overall audit strategy and audit program 13 13 - 2 5 , 13 - 30 , 13 - 32 , 13 - 3 3 , 13 - 3 7 15 Audit of the sales and collection cycle: tests of controls and substantive tests of transactions 14 14 - 2 5 , 14 - 2 6 , 14 - 30 , 14 - 3 2 , 14 - 3 6 16 Accounts receivable: tests of details of balances 16 16 - 2 4 , 16 - 2 8 , 16 - 2 9 , 16 - 3 3 , 16 - 3 9 17 Audit sampling for tests of controls and substantive tests of transactions 15 15 - 3 1 , 15 - 3 2 , 15 - 3 8 , 15 - 3 9 18 Audit sampling for tests of details of balances 17 17 - 2 5 17 - 2 6 , 17 - 2 8 19 Audit sampling for tests of details of balances (cont.) 17 17 - 2 9 , 17 - 3 3 , 17 - 3 5 20 Midterm #2 Midterm #2

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    x One - Semester Assignment Schedule (continued) SESSION SUBJECT READING ASSIGNMENT (CHAPTER) PROBLEM ASSIGNMENT 21 Audit of the acquisition and payment cycle: tests of controls, substantive tests of transactions and accounts payable 18 18 - 2 1 , 18 - 2 4 , 18 - 2 8 , 18 - 3 0 22 Completing the tests in the acquisition and payment cycle: verification of selected accounts 19 19 - 19 , 19 - 2 1 , 19 - 2 8 , 19 - 2 9 23 Audit of cash and financial instruments 23 23 - 1 5 , 23 - 1 9 , 23 - 20 , 23 - 2 5 24 Completing the audit 24 24 - 2 5 , 24 - 2 7 , 24 - 31 25* Audit reports (continued) 3 26 Audit reporting – completion 25 25 - 2 3 , 25 - 2 5 , 25 - 29 27 Internal and governmental financial auditing and operational auditing 26 26 - 19 , 26 - 2 2 28 Internal and governmental financial auditing and operational auditing (cont.) 26 26 - 2 3 * Can be used as a catch - up session or as a review of audit reporting before covering Chapter 25 in the next session. Chapter Opening Vignettes ― Lessons from Practice Each chapter begins with a short vignette that is based on a realistic situation that auditors might expect to face in practice. In addition, each chapter contains several mid - chapter vignettes that highlight other real - world issues that relate to the chapter content, including recent events, news articles, fraud cases, or related thought papers and articles. Many of these opening and mid - chapter vignettes summarize actual company issues, while others highlight realistic judgments faced by auditors in pract ice. We have used these vignettes in our own classrooms over the years. We have also shared them with others. One of our colleagues has used them as a “ Lesson for the Day ” for students. Each vignette illustrates the point implied by its title. Thus, they can be used by the instructor as pre - reading for discussion of a particular point or as short cases on a stand - alone basis. In any event, we believe they are interesting and add a flavor that does not otherwise exist in the traditional academic study of auditing , unless significant time is spent on longer case studies. We suggest you review all 26 opening vignettes plus the shaded mid - chapter vignettes at the beginning of the course and decide which ones to use and how they can be used in your auditing class. A brief discussion of many of the vignettes appears in each chapter ’ s material in this resource guide. Several of them emphasize international issues.

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    xi Data Analytics Coverage and Problems The use of data analytics is introduced in Chapter 7 on audit evidence. Most of the subsequent chapters include a vignette box describing how data analytics can be integrated in the audit process. Several chapters include data analytics problems based on a data set we have provided for the JA Tires company. These problems can be answered using Excel, IDEA, or ACL, as well as data visualization software. The JA Tires data analytics problems are 6 - 35, 7 - 38, 9 - 38, and 14 - 32 . Additional data analytics problems based on publicly available data or text data sets include 3 - 37 on PCAOB Form AP, 10 - 25 on restatements, 18 - 29 involving acquisition transactions, and 19 - 23 involving fixed asset additions. Multiple Choice Problems from CPA Examinations and Becker CPA Exam Review Every chapter includes at least two sets of multiple choice questions from past CPA examinations. These questions have been carefully selected by the author team to cover important audit concepts. Use of polling software included with Pearson’s MyAccountin gLab or outside providers can be used to quickly review multiple choice questions and assess student comprehension. A set of multiple choice problems from Becker CPA Exam Review is also included with every chapter. Concept Checks and Review Questions C oncepts checks are included in two or three places in the chapter immediately following reading material that allow students to quickly assess their understanding of important concepts in the reading material. The end - of - chapter material includes an extensive number of review questions, and this manual includes suggestions as to questions to review in class. End - of - Chapter Discussion Problems, Research Problems, and Cases We have used a group discussion icon to highlight problems that are particularly well - suited for class discussion. Most chapters have at least one of these problems. These problems are a great way to involve the class in discussion to help them understand the application of course material. Research problems that require students to research auditing standards and to search for information using a number of Internet - based resource s are included in the end - of - chapter material for most chapters. Many of t hese assignments require students to use the Internet to research relevant auditing standards and issues , and other research problems expose students to real - world events, such as actual 10 - K annual reports, management reports on internal control over financial reporting, and SEC enforcement actions related to fraud investigations. T hese assignments provide opportunities for students to engage in research activities outside of traditional homework problems to become familiar with how to work with auditing standards and to learn about issues affecting the audit process.

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    xii M ost chapters include Cases that challenge students beyond what is required in other end - of - chapter problems. They are generally more complex than other homework problems. Thus, we sometimes assign these as group assignments that can be worked on outside of class , or we assign them as in - class assignments whereby students work together to develop a group solution to the case for subsequent class discussion. Pinnacle Manufacturing Integrated Case For instructors who are interested in providing a more complex case that students can work across multiple chapters, we have included the Pinnacle Manufacturing Integrated Case. This seven - part case give s students a hands - on experience that begins in Chapter 8 and concludes in Chapter 16. The case can be worked individually or in small teams. We always use the Pinnacle case and assign it to small teams of three or four students, and assign a significant percentage of the final course grade to the case. We made additional changes to this case for the seventeenth edition, which distinguishes this case from prior editions. Use of ACL Software Instructions for installing and using ACL Software are included on the text Web site. Students use this software, which includes several hypothetical databases, to complete ACL - based homework problems in selected chapters. The problems that use ACL software are 7 - 3 5 , 8 - 37 , 1 0 - 3 4 , 12 - 3 5 , 14 - 3 5 , 15 - 3 4 , 16 - 3 7 , and 17 - 3 3 . These problems include the Data Analytics icon in the margin next to the problem and we designate them as ACL problems next to the problem number . Instructors who want to provide more detailed coverage of ACL software can use Data Analytics for Auditing Using ACL , Fourth Edition (20 1 7 ) by Alvin A. Arens , Randal J. Elder, and Carol J. Borsum . This resource is designed for use as a supplement in either an undergraduate or advanced auditing course and contains access to the most current version of the software, along with data sets for 12 companies . Students work through this 25 - to 35 - hour project outside of class time, but the project also provides great flexibility for you to cover important concepts in class. After completing Computerized Auditing Using ACL Data Analytics , students will have an in - depth understanding of how audit software is used in practice for both data analysis and audit testing. Assignment of Excel Problems in the Textbook In the chapter problem materials, there are problems that can be solved using Excel . Most of those have a spreadsheet icon in the margin next to the problem so that you can easily identify them. You may assign these problems to be done manually, with the computer, or both, at your discretion. In the solutions manual, we offer solutions on both bases. In addition, we offer the solution templates and relevant data files on the Instructor ’ s Resource Center . There are other problems that do not have the spreadsheet icon next to the problem; however, the use of Excel could be used to solve the problem.

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    xiii The list below notes all of the problems that can be assigned for solving with computer assistance through the use of Excel software, along with the related solution file names on the Website . PROBLEM NUMBER EXCEL FILE NAME 7 - 3 7 7 - 40 8 - 3 1 8 - 39 1 2 - 37 15 - 2 8 15 - 2 9 15 - 3 9 16 - 3 9 17 - 2 6 17 - 2 8 17 - 2 9 17 - 3 2 17 - 3 4 17 - 3 5 18 - 3 0 21 - 2 6 21 - 3 0 23 - 20 23 - 23 24 - 31 P73 7 .xls P7 40 .xls P83 1 .xls P8 3 9.xls P1 237 .xls P152 8 .xls P152 9 .xls P153 9 .xls P163 9 .xls P17 2 6 .xls P17 2 8 .xls P17 2 9 .xls P17 3 2 .xls P173 4 .xls P173 5 .xls P183 0 .xls P212 6 .xls P213 0 .xls P2320.xls P2323.xls P24 31 .xls The files listed above are available on the Instructor ’ s Resource Center . Instructor ’ s Resource Center The Instructor Resource Center for the Arens/Elder/Beasley /Hogan text (www.pearsonhighered.com/arens) includes a wide variety of resources . If needed, periodic updates of major professional developments may be posted on the Instructor ’ s Resource Center for instructor download and review. Other Resources That We Use In addition to the many features included in this seventeent h edition of Auditing and Assurance Services: An Integrated Approach , there are several other resources that we find useful as compl e mentary materials and assignments.

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    xiv Use of Systems Understanding Aid We find the use of the publication, Systems Understanding Aid , Alvin A. Arens and D. Dewey Ward, Armond Dalton Publishers, Inc., (20 1 6 ) to be extremely useful. The aid is a self - study document that has students work through a simple accounting system, including application of internal controls. It is typically assigned to be done outside of class during the first four weeks, prior to the study of internal control. The aid will give students an adequate familiarity with documents and records to increase their understanding of internal control. Use of Integrated Audit Practice Case The Integrated Audit Practice Case , David S. Kerr, Randal J. Elder, and Alvin A. Arens, Armond Dalton Publishers, Inc., (201 7 ) can be used to give students hands - on experience making audit judgments and completing audit documentation. The case can be completed individually or in groups, and includes 10 assignments that can be assigned throughout the semester. The assignments take students through the planning phase, evaluation of internal control and performance of tests of transactions, substantive tests of balances, and completing the audit. The case includes files that allow students to complete selected assignments in Excel. Use of Auditing Cases Auditing Cases: An Interactive Learning Approach , Seventh Edition (201 9 ) by Beasley, Buckless, Glover, and Prawitt is an excellent supplement to the textbook. This collection of 50 auditing cases addresses most major activities performed during an audit, from client acceptance to issuance of an audit report. Many of the cases are based on actual companies, some of which were engaged in financial reporting fraud. Several cases involve students working with realistic audit evidence and preparing and evaluating audit documentation . Auditing Cases: An Interactive Learning Approach provides instructors an easy opportunity to introduce short active learning exercises to promote in - class discussions of real - world audit issues throughout the introductory auditing course. Suggested Term Projects In addition to the cases included in many of the chapters and the Pinnacle Manufacturing Integrated Case, we identify t wo additional potential term projects. 1. Have students obtain a public company ’ s recent Form 10 - K filing with the SEC and, using a team approach, prepare an analysis of business risks affecting the financial reporting process and develop an audit plan (overview level) for the company selected. 2. Have students go through the audit process for the acquisition and payment cycle of a small manufacturing company from flowcharting the system to designing the audit program. Syllabus excerpts for each project follow.

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    xv TERM PROJECT 1 Analysis and Audit Plan The objectives of this project are as follows: 1. To acquaint students with the Form 10 - K of a publicly held company audited by a CPA firm. 2. To provide data for the practical application of certain steps in the audit process. 3. To allow students to experience working in teams, as is done in actual auditing. Detailed Instructions 1. Form a group of four persons. Discuss how you will organize (assign responsi bilities) to complete this project in a suitable format. 2. Visit the SEC ’ s W eb site (www.sec.gov) to obtain a copy of a recent Form 10 - K filing by a publicly held company with stock actively traded on the New York, NASDAQ , or other over - the - counter exchanges. Answer the following questions : a. What is the company ’ s industry? b. What are its primary products? c. What raw materials does the company use? d. How large is the company: ■ sales ■ assets ■ employees e. Where is the company located? f. What other people/companies are closely associated with this company? g. Look at the Form 10 - K: ■ What information is included in Item 1 and Item 1A of the Form 10 - K? ■ How might that information be useful to the audit during audit planning? 3. Obtain outside information about the company and its industry. Answer the following questions: a. What are the key economic factors about the industry? b. Where is the company in its life cycle? c. What are the five or six most important factors for success in this business? d. How does this company stand with respect to these factors? e. Describe four or five key business risks related to the client ’ s business and industry. f. What notable accounting considerations are there for companies in this industry? g. What legal or regulatory matters are of concern? h. What social matters are of concern?

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    xvi 4. Analyze the company ’ s financial strength: a. Assess the financial strength of the company . b. How is the financial strength likely to change in the next year or so? c. What are its sources of capital , and what is the value of the company ’ s capital? d. How have capital markets responded to the company in the last year? e. What is the quality of earnings? f. How does the company compare with others in the industry? 5. Prepare a broad audit plan: a. What material types of transactions and transaction cycles are involved? b. What are the high - risk areas? Would you consider any of these risk s to be significant risks? c. What are the low - risk areas? d. If management faced tremendous pressure regarding the entity ’ s financial performance, what opportunities might exist for them to engage in fraudulent financial reporting? e. To what extent do you believe it will be appropriate to reduce assessed control risk? f. How will audit effort be allocated among geographical areas? g. What form of audit report do you expect will be issued; what does it mean? 6. Indicate as an appendix to the report how the project team was organized and how it functioned on the project. The project will be graded as follows: ITEM CONTENT STYLE TOTAL 2 to 4 5 6 40% 30% 10% 80% 20% 20% 100% This project accomplishes several purposes. First, it relates the course content to a real (although broadly presented) situation. The students get the idea of auditing the business , not just the books. Students are confronted – some for the first time – with having to obtain, study, and understand content in a Form 10 - K . They have to think about such things as business risk and allocation of scarce resources as a decision - maker. Having the project done by teams is an important part of the approach. Audits are done by teams and auditors must learn to operate successfully in this mode. The team ’ s report determines the grade for each member of the team, regardless of how the team allocated effort. In grading the report, 20 percent of the grade is based on communication quality. This includes organization, style, grammar, neatness, etc. Since effective communication is so essential in practice, this skill receives emphasis in many ways throughout the course.

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    xvii Because students select the company and year to be studied, we do not present a solution. The assignments are evaluated on the completeness of the presentation, rather than “correct” answers. Schedule for Completing Term Project: Week 1 – Form group. Week 2 – Hold organizational meeting. Week 3 – Obtain and read the 10 - K report. Week 10 – Complete and hand in project.

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    xviii TERM PROJECT 2 Internal Control and Audit Program Case You are provided with the following description of the accounting system and internal controls for materials purchases by the Johnson Machinery Company, a medium - sized firm that builds special machinery to order. Materials purchase requisitions are first approved by the plant foreman, who then sends them to the purchasing department. Purchasing department employees enter the purchase requisition information into the computer, which automatically generates a purchase order in sequential order. The system automatically generates a n electronic copy of the purchase order, which is sent by purchasing department employees to the vendor. The receiving department electronically accesses a copy of the purchase order, which is printed to serve as a receiving report. Delivered materials are immediately sent to the storeroom. The completed receiving report, which is a printed copy of the purchase order, is sent to the purchasing department. A copy of the receiving report is sent to the storeroom. Materials are issued to factory employees subsequent to the verbal request by one of the foremen. When the mailroom clerk receives vendors ’ invoices, he or she forwards them to the purchasing department employee who placed the order. The invoice is compared with the electronic copy of the purchase order for price and terms by the employee. The invoice quantity is compared with the receiving department ’ s report. After checking footings, extensions, and discounts on the vendor invoice, the employee indicates approval for payment by initialing the invoice. The invoice is then forwarded to the accounting department (voucher section) where it is coded for account distribution, assigned a voucher number, and entered into the accounting system for recording in the voucher register. The system tracks invoices due by payment date due. The purchase order and receiving report are filed in the purchasing department. On payment dates, the system automatically generates a request for payment. The system automatically prepares checks and a transaction list for preparation of a cash disbursements journal, updates the accounts payable master file, and indicates the payment date for the voucher register. Prenumbered checks are sent to the cashier, who puts them through the check - signing machine. The checks are then sent to the voucher section that makes sure that the checks were correctly prepared. The checks are placed in e nvelopes and sent to the mailroom. The vouchers are subsequently filed in numerical order. At the end of each month, a computer listing of voucher and cash disbursement transactions, and an outstanding accounts payable list is prepared. The Treasurer reviews monthly reports of acquisitions by vendor to identify key vendors. This is used to determine whether any represent key vendors that should be disclosed, and whether the company faces risk due to overreliance on a few vendors.

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    xix Required: 1. Prepare a flowchart for the acquisition and the payment cycle for Johnson Machinery Company. 2. List the controls in existence for each of the s even transaction - related audit objectives for acquisitions. 3. For each control in part 2, list one test of control procedure for verifying its effectiveness. 4. List the most important deficiencies in the acquisition and payment cycle. 5. Identify the most likely error or fraud that could result from each of the deficiencies listed in part 4. 6. Suggest a system alteration for JMC that would correct each of the deficiencies identified in part 4. Be sure to keep cost/benefit in mind. 7. Design an audit program to test internal control. The program should include, but not be limited to, tests of controls from part 3 and procedures to compensate for the deficiencies in part 4. The solution to Term Project 2 is included on the following pages.

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    xx Solution to Term Project 2 Requirement 1 Johnson Machinery Company Materials Purchases Purchasing Department Plant Foreman Receiving Department Storeroom Accounting (Voucher section) Cashier Mailroom Approves and submits purchase requisition Purchase requisition To vendor Good received Goods transferred to storeroom (1) Purchase order used as receiving report Computer- generated prenumbered purchase order Copy of receiving report Vendor s invoice Purchase order Copy of receiving report Vendor s invoice approved for payment (3) System generates checks and disbursement listing (4) Checks Disbursement listing Update A/P master file Checks PO RR Notes 1. Goods issued to employees on verbal request of foreman. 2. Purchasing compares invoice to PO and RR. 3. Invoice coded for account distribution, assigned a voucher number, and entered into the accounting system for recording in voucher register. System tracks payments by due date and generates request for payment when due. 4. Cashier runs checks through check-signing machine. 2 Receive vendor s invoice Vendor s invoice Checks mailed Checks Verify checks are correctly prepared and place in envelopes Checks Invoice/ voucher

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    xxi Requirements 2 and 3 Note: The focus of this problem is on the acquisitions and payments cycle. There would be other controls related to the cash disbursements cycle. a Tested by reperformance since no independent verification. Transaction - Related Audit Objective Controls in Place (Req. 2) Test of Control (Req.3) 1. Recorded acquisitions are for goods and services received, consistent with the best interests of the client (occurrence) 1a. Purchase requisitions are approved by the plant foreman 1b. Vendors’ invoices, receiving reports, and purchase orders are compared for quantity, price and terms 1a. Examine indication of approval 1b. Examine initials indicating verification and approval for payment 2. Existing acquisition transactions are recorded (completeness) 2a. Purchase orders are prenumbered 2b. Receiving reports (copy of PO) are prenumbered 2a. Account for sequence of purchase orders 2b. Account for sequence of receiving reports 3. Recorded acquisition transactions are accurate (accuracy) 3a. Calculations and amounts are verified by purchasing department employee 3a. Examine initials indicating verification and approval for payment 4. Acquisition transactions are correctly included in the accounts payable and inventory master files and are correctly summarized (posting and summarization) 4. Invoices are entered into the accounting system by the accounting department 4. Compare invoices to amounts entered into accounts payable and inventory master files a 5. Acquisition transactions are correctly classified (classification) 5. Accounting department codes the invoice for account distribution 5. Review for proper account distribution a 6. Acquisition transactions are recorded on the correct date (timing) 6. Invoices are recorded when received by the accounting department once approved for payment 6. Compare dates of receiving reports with dates in the acquisition journal a 7. Acquisition transactions are properly aggregated and related disclosures in the financial statements are relevant and understandable (presentation) 7. Treasurer reviews monthly reports of acquisitions by vendor to determine whether any require disclosure 7. Examine evidence of the Treasurer’s review to evaluate proper disclosure a

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    Requirements 4, 5 and 6 Req. 4 Deficiencies Req. 5 Risk of Error or Fraud Req. 6 - Potential Suggestions for Improvement No approvals are required by individuals in the purchasing department. Only the plant foreman, who receives custody of the goods purchased, approves the purchase. The lack of approval beyond that of the plant foreman might result in the use of company resources for the wrong types of purchases. The foreman might make an error in the types and quantities of items needed, resulting in error. Currently, there is a lack of segregation of duties given the foreman has the ability to approve purchases and has full access to the use of those goods. Therefore, the foreman might order goods for personal use, increasing the risk of fraud. The approval of purchase requisitions should be separated from those with custody of the goods purchased. Purchasing department personnel should have responsibility for authorizing the purchase orders based on predetermined criteria, (such as production s chedules for the plant). Additionally, the approval of the processing of payment should reside with someone in a Treasurer (or other senior leadership role). That approval would include review of the purchase order, receiving report, and invoice to ensure all payments are for leg itimate and appropriate business use by Johnson Machinery Company. There is no preapproved list of vendors that purchasing department personnel are authorized to use. There also are no pre - established spending thresholds of how much can be purchased without additional management approvals. Without a pre - specified list of approved vendors and goods that are allowed for purchase, purchasing personnel may make purchases from low - quality or unreliable suppliers, resulting in products that may not be acceptable or purchases from vendors who are n ot able to deliver on a timely basis. Without an approved list of vendors, purchasing personnel might collude with illegitimate vendors to engage in fraud, or purchasing staff might create fictitious vendors to process fraudulent payments to themselves. Management should review and approve a set of approved products and approved vendors that satisfy pre - determined criteria, such as type and quality of product or service delivery, reliability timeliness, and financial viability. Purchasing staff would only be able to purchase products from vendors on the pre - approved vendor and product list; otherwise, they would be required to obtain additional management approvals. xxii

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    Req. 4 Deficiencies Req. 5 Risk of Error or Fraud Req. 6 - Potential Suggestions for Improvement Personnel in the receiving department rely on a copy of the purchase order to serve as the receiving report. Receiving department personnel can see the quantity ordered given they have access to the full purchase order. Receiving department personnel may not independently verify the types and quantities of goods actually received when those goods arrive. Instead, they may rely on the product and quantity descriptions already on the purchase order to indicate what is recei ved. There is a risk that the types and quantities of products received are not the same as those ordered; however, that error may go undetected without independent verification. If more than the amount of product is received than what was ordered, receiving department personnel could fraudulently take the excess quantities for personal use. Receiving department personnel should only have “READ ONLY” access to an electronic copy of the purchase order and they should not be able to see the quantity of products ordered. Receiving department personnel should prepare a stand - alone receiving report to record the types and quantities of products received based on their independent verification when the products arrive in receiving. Receiving reports are not prenumbered or accounted for. There is no reliable method of determining the population of outstanding receiving reports. Goods might be received that have not been invoiced, which may increase the risk of having unrecorded payables. Separate prenumbered receiving reports should be prepared and the sequence of used and unused receiving reports should be regularly accounted for. Personnel in the purchasing department receive the invoice from the mailroom and they compare the invoice to the purchase order and receiving report (which is a copy of the purchase order). Accounting has no responsibility for independently matching purcha se order, receiving report, and invoice. The purchasing department may not reconcile accurately the information on the purchase order, receiving report, and invoice, resulting in errors that might include payment for goods not received or payment for goods not ordered. There is risk of collusion between purchasing department personnel and those in the storeroom and receiving departments given that they could order and receive goods for personal use, and then approve the goods for payment. The mailroom should forward all invoices to the accounting department upon receipt. The purchasing department should also forward a copy of all purchase orders generated and the receiving department should forward a copy of the receiving report to the acc ounting department. The accounting department should then be responsible for the independent matching of all three documents to ensure agreement. The set of matched documents should then be provided to an individual outside of accounting with check - signi ng authority for review and payment approval. Final storage of the matched documents should be in accounting. xxiii

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    Req. 4 Deficiencies Req. 5 Risk of Error or Fraud Req. 6 - Potential Suggestions for Improvement Materials are issued to the factory employees based on a verbal request by the foreman. Materials may be used incorrectly or inefficiently, resulting in waste and loss. Individuals could remove goods for fraudulent use. Procedures for releasing materials from the storeroom to the plant should include a series of approvals. Products that are released should be reconciled to a production schedule to ensure only those products needed for production are released. Once the purchasing department matches the purchase order, receiving report, and invoice, no one else is involved in approving the payment. Payments may occur that are not for approved or appropriate business purposes for Johnson Machinery. Products might be ordered by the purchasing department in error or fraudulent purchases might be made by the purchasing department that would go undetecte d. Approval of final payment should be made by someone in the treasury role or other individuals who are part of the senior management team. The ability to approve the payment for a purchase should not reside in accounting, purchasing, receiving, storeroom, o r plant departments. While vouchers are filed numerically, there is no indication that the sequencing of vouchers is accounted for. Vouchers might be missing and thus payment would not be made to vendors on a timely basis. Alternatively, duplicate vouchers might be created with payment processed twice. Establishing proper cut - off of vouchers at an accounting period end would be difficult to establish, potentially resulting in incorrect timing of the recording of transactions. Someone independent in the accounting department should account for the sequences of vouchers on a regular basis. Checks signed by the check signing machine are forwarded to accounting department personnel who review the payment accuracy and forward checks to the mailroom. Accounting department personnel could create false voucher package documentation and then fraudulently divert the checks for personal use. The cashier should process the mailing of all checks to the vendor after they have been approved and signed. xxi v

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    Req. 4 Deficiencies Req. 5 Risk of Error or Fraud Req. 6 - Potential Suggestions for Improvement There is no indication that there is any reconciliation of computer listings (voucher, cash disbursement, and outstanding accounts payable list). There may be errors in posting transactions in the cash disbursement transactions and in the accounts payable listing. Someone in the accounting department should reconcile the cash disbursement transactions computer listing to postings of vendor payment in the accounts payable list. xx v

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    xxvi Requirement 7 Audit Program Steps 1. Randomly select a sample of transactions from the Cash Disbursements Journal during the year. Perform the following for each transaction selected: a. Vouch the payment in the Cash Disbursement Journals to the voucher package and determine that approvals for the review of the voucher are indicated on the voucher document. b. Obtain the related invoice from accounting and determine if the purchasing department approvals of the footings, extensions, and discounts are present on the invoice indicating review and approval occurred. Reperform the footings, extensions, and discount s to verify accuracy. c. Obtain the related purchase order and receiving report documents stored in the purchasing department. Verify that there is agreement of goods purchased and received on the purchase order and receiving report or that discrepancies have been reconciled by th e purchasing department personnel as part of their review. d. Based on the review of the purchase order, receiving report, and invoice, determine that the quantities of products received agree with those on the invoice. Also review nature and quantity of goods purchased and received for reasonableness and appropriate ness. e. Review the account coding indicated on the invoice for reasonableness with the chart of accounts. f. Verify accuracy and timeliness of the posting of the transaction in the acquisitions journal, cash disbursements journal and accounts payable master file. 2. Account for the sequence of outstanding receiving reports to determine if any goods have been received that have not been invoiced or recorded in the acquisition journal. 3. Select a sample of receiving reports stored in the storeroom and trace them to the acquisitions journal. 4. Select a sample of voucher packages with invoices and trace them to the acquisitions journal. 5. Review the acquisitions journals, cash disbursement journal, and accounts payable list for large or unusual amounts or items, including potential related parties. 6. Examine evidence of Treasurer’s review of monthly reports of acquisitions by vendors to evaluate the adequacy of that review for transactions requiring disclosure in the financial statements.

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    xxvii Summary of Additional, Changed, and Deleted Problem Material We have added new end - of - chapter homework problems and revised others in this s even teenth edition of Auditing and Assurance Ser vices: An Integrated Approach . If you have previously used the six teenth edition of our book, you may want to review this list of new, revised, or deleted homework problems in the seven teenth edition relative to problems you may have used in the six teenth edition. Question/Problem/ Case # in 1 6 /e Question/Problem/ Case # in 1 7 /e Comments CHAPTER 1 1 - 1 5 1 - 1 6 Modified for 1 7 /e 1 - 16 1 - 17 Modified for 1 7 /e 1 - 17 through 1 - 19 1 - 1 8 through 1 - 20 Shifted number, same problem 1 - 2 0 1 - 2 1 Modified for 1 7 /e 1 - 2 1 through 1 - 24 1 - 2 2 through 1 - 25 Shifted number, same problem CHAPTER 2 2 - 1 6 2 - 16 Modified for 1 7 /e 2 - 1 7 2 - 17 Modified for 1 7 /e 2 - 18 2 - 18 Unchanged for 17/e 2 - 19 2 - 1 9 Modified for 1 7 /e 2 - 20 2 - 20 Unchanged for 17/e 2 - 2 1 Deleted for 1 7 /e 2 - 2 1 New for 1 7 /e 2 - 2 2 New for 1 7 /e CHAPTER 3 3 - 23 3 - 23 Unchanged for 17/e 3 - 2 4 3 - 2 4 Modified for 1 7 /e 3 - 25 Deleted for 17/e 3 - 26 3 - 26 Unchanged for 17/e 3 - 27 3 - 25 M odified for 17/e 3 - 27 New for 1 7 /e 3 - 28 3 - 28 Unchanged for 17/e 3 - 29 3 - 29 Modified for 1 7 /e 3 - 30 3 - 30 Modified for 1 7 /e CHAPTER 4 4 - 20 4 - 2 1 Shifted number, same problem 4 - 2 1 through 4 - 2 3 4 - 2 2 through 4 - 2 4 Modified for 1 7 /e 4 - 2 4 4 - 2 5 Shifted number, same problem 4 - 25 4 - 27 Shifted number, same problem 4 - 26 4 - 26 Modified for 17/e 4 - 27 4 - 28 Shifted number, same problem 4 - 29 New for 1 7 /e 4 - 28 through 4 - 30 4 - 30 through 4 - 32 Shifted number, same problem CHAPTER 5 5 - 1 7 5 - 1 9 Shifted number, same problem

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    xxviii Question/Problem/ Case # in 1 6 /e Question/Problem/ Case # in 1 7 /e Comments 5 - 1 8 5 - 1 7 Modified for 1 7 /e 5 - 19 5 - 1 8 Modified for 1 7 /e 5 - 20 through 5 - 2 2 5 - 20 through 5 - 2 2 Unchanged for 1 7 /e 5 - 2 3 5 - 23 Modified for 1 7 /e 5 - 2 4 5 - 24 Modified for 1 7 /e 5 - 25 Deleted for 17/e 5 - 25 New for 1 7 /e 5 - 26 New for 1 7 /e 5 - 26 5 - 2 7 Modified for 1 7 /e 5 - 27 5 - 2 8 Shifted number, same problem CHAPTER 6 6 - 24 through 6 - 29 6 - 2 5 through 6 - 30 Shifted number s , same problem s 6 - 30 through 6 - 33 6 - 31 through 6 - 34 Modified for 1 7 /e 6 - 34 Deleted for 1 7 /e 6 - 35 New for 1 7 /e CHAPTER 7 7 - 2 5 and 7 - 26 7 - 2 7 and 7 - 28 Modified for 1 7 /e 7 - 2 7 7 - 2 9 Shifted number, same problem 7 - 2 8 and 7 - 29 7 - 30 and 7 - 3 1 Modified for 1 7 /e 7 - 3 0 7 - 32 Shifted number, same problem 7 - 3 1 7 - 33 Modified for 1 7 /e 7 - 32 Deleted for 17/e 7 - 3 3 7 - 3 4 Modified for 1 7 /e 7 - 3 4 and 7 - 3 5 7 - 3 6 and 7 - 3 7 Shifted number, same problem 7 - 36 Deleted for 1 7 /e 7 - 37 7 - 40 Shifted number, same problem 7 - 38 New for 1 7 /e 7 - 38 Deleted for 1 7 /e 7 - 39 7 - 35 Shifted number, same problem 7 - 39 New for 17/e CHAPTER 8 8 - 2 9 and 8 - 30 8 - 2 7 and 8 - 28 Shifted number s , same problem s 8 - 29 New for 1 7 /e 8 - 31 and 8 - 3 2 8 - 30 and 8 - 31 Shifted number s , same problem s 8 - 33 Deleted for 17/e 8 - 3 4 through 8 - 38 8 - 3 2 through 8 - 36 Shifted number s , same problem s 8 - 3 9 8 - 3 8 Shifted number, same problem 8 - 40 8 - 3 9 Modified for 1 7 /e 8 - 41 8 - 37 Shifted number, same problem CHAPTER 9 9 - 2 9 through 9 - 31 9 - 29 through 9 - 3 1 Unchanged for 1 7 /e 9 - 32 New for 17/e 9 - 32 9 - 33 Shifted number, same problem

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