Lecture Notes for Auditing and Assurance Services, 17th Edition

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ACL Installation and InstructionsINTRODUCTIONACL is generalized audit software used by auditors to extract and analyze data on client’scomputerized systems. Generalized audit software is discussed on pages 329 and 398of the text.The ACLProblems 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 ofits use is beyond the scope of most first auditing courses. The guidance provided in thisAppendix is intended only to help you solve the problems in the text.Downloading ACLComplete the following steps to access the ACL software:1.Visit the ACL Academic Network page for Professors athttps://info.acl.com/Academic-Network-for-Professors.html2.Sign up for the ACL Academic Network.3.You will receive two emails: the first explains your software entitlement and thesecond will contain instructions on how to activate the user account and set apassword. 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.htmlNote 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:Analyticsinstallation:https://help.highbond.com/helpdocs/analytics/14/user-guide/en-us/Content/administration/home.htm.GRCquickstart:https://help.highbond.com/helpdocs/projects/current/user-guide/en-us/Content/projects/quick_start/Projects_quick_start.html?cshid=pm-pm-quick-startOpening ACLAn icon to open ACL should be on your desktop after installation. If it does notappear,then go to Windows Start and select “Programs” to thenlocate the ACL link.Select theACL link to launch the software.Finding Companies, Tables, and Using CommandsThe main ACL screen should appear when you open the ACL software. Look at thatscreen now.On that screen, you will see a choice to create a new analytic project or open ananalytic project. Click on the link for “Open Analytic Project.” Within the “SampleFiles”you will see three projects listed. The ACL assignments in the text use only twoof theseprojects: ACL_Rockwood and ACL_Cypress_Pcards. Both of these projectshave severalfolders and files within those folders, which ACL calls tables. You willfirst double-click ona project to identify the folders, which will appear in the left sideof your screen windowonce you double-click on the project folder. (Note:When youopen ACL again, any

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projects you have accessed will appear under “Recent AnalyticsFiles” and can beaccessed using those links.)Note:From now on, when you see italics it means you should use your computer tofollowan instruction. The arrow sign (→) indicates an additional action to be taken.Double-Click ACL_Rockwood to open the folders under ACL_Rockwood→Clicktheplus sign next to the payroll folderto view the available tables.Observe that there are now threetables available in the payroll folder.DoubleclickPayroll_detailsandobservethatatypicalACLtablelabeledPayroll_details for payroll transactions opens. On the bottom row of that screen,thenumber of records in the table is listed (5,801). The table includes columnswithtitles and data in each column. That is the information that auditors verify usingvarious commands.Click the top of the Net pay column on the table (make sure the column is now allhighlighted)→Go to the Windows drop-down options at the top of the screen andselect“Analyze” (on the Menu bar)→Under “Analyze,” select “Total” (on the drop-downlist).The amount shown on the screen should be 7,466,987.20. You just used an ACLcommand (Total) to calculate the total of thenet pay amounts in the table. That surebeatsusing a calculator or reentering the data in Excel.Click the smallxnext to the Total tabto closethat window and return to thePayroll_details table.→Click the small xnext to the Payroll_details tabto 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 questionsinthe text. The firstthree functions (Quick Sort, Filters, and Computed Fields) arenotconsideredACLcommands.TheremainingfunctionsincludedhereareallACLcommands. You will use these commands in ACL homework problems that areincludedin selected chapters. The descriptions below provide a brief overview of thefunctions thatwill be used to complete those problems. Within each ACL homeworkproblem in the text,you will see the commands needed to answer the problem listedwithin parentheses inthat problem.Quick SortUsed 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 orQuickSort Descending. (You can right click Quick Sort Off to undo the sort.)

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FiltersUsed to ask questions of data in a table without adding a new field.1.Click the Edit View Filter buttonin the row above the column headings toenterthe Edit view filter window.2.Use the Expression box tobuild an expression.3.The Expression box is where you build filters using the available fields in thecurrent table, as well as the operators (=, < >, AND, etc.). There are threecomponentsto a filter: (1) field, (2) operator, and (3) a numeric value, charactervalue, or date.4.In the Available Fields portion of the window, double-click the name of the fieldforwhich you are building a filter.Notice that the field name is inserted in theExpression box.5.Use the operator buttons (=, +, <, >, etc.) and the numeric keypad on the keyboardto build the filter.Note:If you are performing a recalculation to determineif theoriginal calculation already in the data table is correct, use <> as theoperator withno spaces between the less than and greater than signs.6.Enteranappropriatestringorvalueaftertheoperator.Usethefollowingguidelines:•Numeric values—enter as a number with no commas or dollar signs. Forexample, to enter $1,000, type 1000.•Character values—enclose with one or two quotations. For example, toenter department D10, type “D10” or ‘D10’. Use the same case as is usedinthe data field.•Dates—click on the Date & Time button located just below the mathematicaloperatorsto open the Date & Time Selector box. Click the drop-downarrowtoenter the monthly calendar box. Select the date, then click OK.7.For more complex filters, use the AND, OR, or NOT operators and repeat thepreceding process for each portion of the filter.After selecting an AND, OR,orNOT, it is necessary to repeat all three components[(1) field, (2) operatorand(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 $1,000for employee number 0000124921 from the Payroll_details table is as follows:employee_number = “0000124921” AND gross_pay > 10009.Click OK to complete the filter.10.Ifyou want to change the filter, clickagain to return to theEdit view filterwindow.Make changes in the filter and click OK.11.You can also apply additional commands to a filtered table until you removethefilter.12.Click the Remove Filter buttonafter you have completed all additional testsonthe filtered table to return to the unfiltered table.Computed FieldsUsed to ask questions of data in a table by adding a new field.Thenew 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 ontheleft sideof the window under the “Edit Fields/Expressions” tab.(You mayneed toexpand thewindow to see the.)4.Add a name for the computed field in the Name box that describes the newcolumn.Also add a column title in the Alternative Column Title box, which willappear in theTable after you complete the new field.5.Click the Expression button, which is located to the right of the Name box toopen the Expression box.6.Build an expression in the expression box in the same way as for filters.Forexample, assume you want to independently calculate the net pay.Enter“RecalcNet Pay” in the Name box and in the Alternative Column Title box and intheExpression 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–deductions7.After building the expression, click OK to return to the original table layout window.8.Click the Accept Entry buttonon the top left of the screen to save the newcomputed 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 tablewhich contains all the data for the file you areexamining. Placethe cursor in the column heading to the right of where youwant 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 CommandUsed to accumulate data in a table by age, usually for accountsreceivable.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 Agecommand on3.In the Subtotal Fields portion of the command dialog, click on the name of thenumeric 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 tocalculatethe aging. It is typically the client’s year-end date.5.Click OK to run the Age command.Classify CommandUsed to count and aggregate the number and percentage ofrecordsfor 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 notclick the column heading.)2.Click Analyze→Classify, then select the field you want to classify on. Next clickon the quantity field in the Subtotal Field that you want summarized.

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3.Click OK.Count CommandUsed to count records in a table that you have filtered. (For atable thathas not been filtered, the record count is indicated at the bottom of theopen table.) Aftera filter is applied to a table, observe that there is now a ?/ in thelower left corner thatreplaces the original count.1.Click Analyze→Count.2.Click OK.The new count replaces?/ in the lower left corner.Duplicates CommandUsed to detect duplicates in the sequence of numbers in atable,usually document numbers.1.Click on the column heading for the document numbers you want to test forduplicates.2.Click Analyze→Duplicates.3.The result is a list of duplicates if any exist.When prompted click on OK andtypeany output file name such as “Duplicates.”(You can change the radiobutton from“file” to “screen” under the output tab if you want to see theoutput on your screenand not save it to a file.)Gaps CommandUsed to detect gaps in the sequence of numbers in a table, usuallydocument 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.StatisticsCommandUsedtoidentifycharacteristicsinclientdatafilestobetterunderstand 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 clickingonthe line(s) containing the field name(s). Use the Shift or Control key to selectmorethan one field.3.Click OK to run the command.Stratify CommandUsed to accumulate stratification of numeric information in afield.1.Select the field on which you intend to stratify. Use Quick Sort to identifylarge andsmall 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 tostratify.4.Enter theminimum and maximum values in the minimum and maximum boxeswith no dollars or commas and the number of intervals (the default is 10).Youcanalso highlight the entire column and click Analyze→Stratify to stratifywithouthaving to enter values.5.Click OK to run the Stratify command.Summarize CommandUsed to count records and accumulate numeric amountsfor acharacter 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 tosummarize on. For example, in the Payroll_details table in the ACL_RockwoodProject, if you want the total amount of gross pay for each employee, youwouldsummarize on employee number.Click on the Summarize On dropdownarrow andclick on “employee_number” in the Name column.3.In the Subtotal Fields portion of the window, click on the name of the numericfieldyou want to accumulate for each summary category(for example, gross pay).4.Click OK and when prompted to enter an output file name typeany name for thefile you are summarizing such as“Pay_by_employee.”5.Click OK for a new table.Total CommandUsed 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 CommandUsed 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 theRecord radio button to determine a sample size for records.3.InputthesamplingparametersandselectCalculate.Thesamplesizeandsamplinginterval 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 orrandom radio button.•For random selection, input the sample size and indicate the output filename. (You canalso indicate a random seed number, but it is not required.)•For fixed interval selection, indicate the size of the sampling interval andoutput file name. (You can also indicate a random seed number, but it is notrequired.)3.Select the MUS radio button to select an MUS sample. Also indicate the monetaryamount field to be sampled from. Select the fixed interval or random radio button.•For random selection, input the sample size and population size andindicatethe output file name.(You can also indicate a random seed number,but it isnot required.)•For fixed interval selection, indicate the size of the sampling interval andoutput filename.(You can also indicate a random seed number, but it is notrequired.)Note:The evaluation of sample errors is not illustrated.

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vCourse Approach SuggestionsThe purpose of theInstructor’s Resource Manualis to help you teach auditingand other assurance servicescoursesmore efficiently. Naturally, we do not want tointerfere with your present approach orimply that our suggestions are the only goodalternatives.This resource manual has several parts:Illustrative schedules for one-quarter and one-semester courses.Term projects we have successfully used.Chapter-by-chapter suggestionsforteaching the content ineach 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 problemmaterial. The matrix for each chapter is designed to provide a one-pagesummary of this information in order to assist you in assigning problemmaterial.Overheadmasters containing ideas we like to emphasize in classthat canbe projected using a document camera or transparency machine. These arelabeled“OH”in theback of theteaching notes for each chapter. Theoverheadmasters can also be downloaded from theInstructor’s ResourceCenter(www.pearsonhighered.com/arens).We find that use of the overheads, especially the ones that require studentresponses, are an excellent way to involve students. We use the overheads inconjunction with the PowerPoint slides to help vary the course approach.Manyof the chapter figures and tables are included in the PowerPointslides for the respective chapters.Note that theImage Galleryposted attheInstructor’s Resource Centercontains every table, graph, and piece of art from thetextbook. YoucanusetheitemsintheImageGallerytocreateadditionalPowerPointpresentations or overhead transparencies. Many of thekey figuresandtables have already been included on PowerPoint slides.The chapters are designed so that their arrangement and selection providesmaximum flexibility in course design.Suggested SyllabiIn this section, we provide a possible schedule for use in a one-quarter courseand in a one-semester course.We also provide suggested problem assignments thatcould easily be presented in your syllabus.Following these sample syllabi, we briefly overview other teaching materialsthat you might find helpful as you develop your plan for coverage of the coursecontent.

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viOne-Quarter Schedule(assumes two75-minute sessions per week)WEEKNO.CONTENTSCORRESPONDINGCHAPTER IN TEXT1IntroductionThedemand for audit and other assuranceservicesThe CPA professionAudit reportsChapter 1Chapter 2Chapter 32Audit responsibilities and objectivesAudit evidenceChapter 6Chapter 73Audit planning andmaterialityAssessing theriskof material misstatementChapter 8Chapter 94Assessing and responding to fraud risksInternal control and COSO frameworkChapter 10Chapter 115Assessing control risk and reporting on internalcontrolsMidterm examinationChapter 12Midterm6Overall auditstrategyand audit programAudit of the sales and collection cycle: tests ofcontrols and substantive tests of transactionsChapter 13Chapter 147Accounts receivable: tests of details of balancesAudit sampling for tests ofcontrols andsubstantive tests of transactionsChapter 16Chapter 158Audit sampling for tests of controls andsubstantive tests of transactions (cont.)Completing the auditChapter 15Chapter 249Audit reporting–other assurance reportsProfessional ethicsChapter 25Chapter 410Legal liabilityInternal and governmental financial auditing andoperational auditingChapter 5Chapter 26

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viiOne-Semester Schedule(assumes two75-minute sessions per week)WEEKNO.CONTENTSCORRESPONDINGCHAPTER IN TEXT1IntroductionThe demand for audit and other assuranceservicesThe CPA professionAudit reportsChapter 1Chapter 2Chapter 32Professional ethicsLegal liabilityChapter 4Chapter 53Auditresponsibilities and objectivesAudit evidenceChapter 6Chapter 74Audit planning andmaterialityAssessing the risk of material misstatementChapter 8Chapter 95Assessing the risk of material misstatement(cont.)Midterm examination #1Chapter 9Midterm #16Assessing and responding to fraud risksInternal control and COSO frameworkChapter 10Chapter 117Assessing control risk and reporting on internalcontrolsOverall auditstrategyand audit programChapter 12Chapter 138Audit of the sales and collection cycle: tests ofcontrols and substantive tests of transactionsAccounts receivable: tests of details of balancesChapter 14Chapter 169Audit sampling for tests of controls andsubstantive tests oftransactionsAudit sampling for tests of details of balancesChapter 15Chapter 1710Audit sampling for tests of details of balances(cont.)Midterm examination #2Chapter 17Midterm #211Audit of the acquisition and payment cycleCompleting tests in the acquisition and paymentcycleChapter 18Chapter 1912Audit of cashand financial instrumentsCompleting the auditChapter 23Chapter 2413Audit reporting–completion and other assuranceservices reportsChapter 3Chapter 2514Internal and governmental financial auditing andoperational auditingChapter 26

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viiiOne-Quarter Assignment ScheduleSESSIONSUBJECTREADINGASSIGNMENT(CHAPTER)PROBLEMASSIGNMENT1Introduction, audit and assuranceservices, andthe CPA profession1 and 21-17, 1-18, 2-19,2-202Audit reports33-23, 3-26, 3-273Audit responsibilities and objectives66-26, 6-30, 6-33,6-34, 6-354Audit evidence77-26, 7-27, 7-30,7-36, 7-385Audit planning andmateriality88-27,8-31, 8-34,8-37, 8-396Assessing the risk of materialmisstatement99-29,9-31, 9-34,9-37,9-38,9-407Assessing and responding to fraudrisks1010-22, 10-23, 10-33,10-34, 10-358Internal control and COSOframework1111-23, 11-24, 11-259Assessing control risk and reportingon internal controls1212-21, 12-23, 12-29,12-35, 12-3710MidtermMidterm11Overall auditstrategyand auditprogram1313-25, 13-30, 13-32,13-33, 13-3712Audit of the sales and collectioncycle: tests ofcontrols andsubstantive tests of transactions1414-25,14-26,14-30,14-32, 14-3613Accounts receivable: tests of detailsof balances1616-24, 16-28, 16-29,16-33, 16-3914Audit sampling for tests of controlsand substantive tests oftransactions1515-31, 15-32, 15-3815Audit sampling for tests of controlsand substantive tests oftransactions (cont.)1515-3916Completing the audit2424-25, 24-27, 24-3117Audit reporting–completion2525-23, 25-25, 25-2918Professional ethics44-22, 4-23, 4-24,4-3119Legal liability55-21, 5-24, 5-2820Internal and governmental financialauditing and operational auditing2626-19, 26-22

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ixOne-Semester Assignment ScheduleSESSIONSUBJECTREADINGASSIGNMENT(CHAPTER)PROBLEMASSIGNMENT1Introduction, audit and assuranceservices, and the CPA profession1 and 21-17, 1-18, 2-19,2-202Audit reports33-23, 3-26, 3-273Professional ethics44-22, 4-23, 4-24,4-314Legal liability55-21,5-24, 5-285Audit responsibilities and objectives66-26, 6-30, 6-33,6-34, 6-356Audit evidence77-26, 7-27,7-30,7-36, 7-387Audit planning andmateriality88-27, 8-31, 8-34,8-37, 8-398Assessing the risk of materialmisstatement99-29,9-31, 9-349Assessing the risk of materialitymisstatement(cont.)99-37,9-38,9-4010Midterm #1Midterm #111Assessing and responding to fraudrisks1010-22, 10-23, 10-33,10-34, 10-3512Internal control and COSOframework1111-23, 11-24, 11-2513Assessing control risk and reportingon internal controls1212-21, 12-23, 12-29,12-35, 12-3714Overall auditstrategyand auditprogram1313-25, 13-30, 13-32,13-33, 13-3715Audit of the sales andcollectioncycle: tests of controls andsubstantive tests of transactions1414-25,14-26,14-30,14-32, 14-3616Accounts receivable: tests of detailsof balances1616-24, 16-28, 16-29,16-33, 16-3917Audit sampling for tests of controlsandsubstantive tests oftransactions1515-31, 15-32, 15-38,15-3918Audit sampling for tests of details ofbalances1717-2517-26, 17-2819Audit sampling for tests of details ofbalances (cont.)1717-29, 17-33, 17-3520Midterm #2Midterm #2

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xOne-Semester Assignment Schedule(continued)SESSIONSUBJECTREADINGASSIGNMENT(CHAPTER)PROBLEMASSIGNMENT21Audit of the acquisition and paymentcycle: tests of controls, substantivetests of transactions and accountspayable1818-21, 18-24,18-28,18-3022Completing the tests in theacquisition and payment cycle:verification of selected accounts1919-19, 19-21, 19-28,19-2923Audit of cashand financialinstruments2323-15, 23-19,23-20,23-2524Completing the audit2424-25,24-27, 24-3125*Audit reports(continued)326Audit reporting–completion2525-23, 25-25, 25-2927Internal and governmental financialauditing and operational auditing2626-19, 26-2228Internal and governmental financialauditing andoperational auditing(cont.)2626-23*Can be used as a catch-up session or as a review of audit reporting before covering Chapter 25 inthenext session.Chapter Opening Vignettes―Lessons from PracticeEach chapter begins with a short vignette that is based on a realistic situationthat auditors might expect to face in practice. In addition, each chapter containsseveralmid-chapter vignettes that highlight other real-world issues that relate to thechapter content, including recent events, news articles, fraud cases, or relatedthought papers and articles. Many of these opening and mid-chapter vignettessummarize actual company issues, while others highlight realistic judgments facedby auditors in practice.We have used these vignettes in our own classrooms over the years. We havealso shared them with others. One of our colleagues has used them as a“Lesson forthe Day”for students. Each vignette illustrates the point implied by its title. Thus, theycan be used by the instructor as pre-reading for discussion of a particular pointor asshort cases on a stand-alone basis. In any event, we believe they are interestingandadd 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-chaptervignettes at the beginning of the course and decide which ones to use and howthey can be used in your auditing class. A brief discussion of many of the vignettesappears in each chapter’s material in this resource guide. Several of them emphasizeinternational issues.

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xiData Analytics Coverageand ProblemsThe use of data analytics is introduced in Chapter 7 on audit evidence. Mostofthe subsequentchapters include a vignette box describing how data analytics can beintegrated in the audit process. Several chapters include data analytics problemsbased on a data setwe have providedfor the JA Tires company. These problems canbe answered using Excel, IDEA, or ACL, as well as data visualization software. TheJA Tires data analytics problems are 6-35, 7-38, 9-38, and 14-32.Additional dataanalytics problems based on publicly available data or text data sets include 3-37 onPCAOB 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 ExamReviewEvery chapter includes at least two sets of multiple choice questions from pastCPA examinations. These questions have been carefully selected by the author teamto cover important audit concepts. Use of polling software included with Pearson’sMyAccountingLab or outside providers can be used to quickly review multiple choicequestions and assess student comprehension. A set of multiple choice problems fromBecker CPA Exam Review is also included with every chapter.Concept Checks and Review QuestionsConcepts checksare includedin two or three places in the chapter immediatelyfollowing reading material that allow students to quickly assess their understandingof important concepts in the readingmaterial. The end-of-chapter material includesan extensive number of review questions, and this manual includes suggestions asto questions to review in class.End-of-ChapterDiscussion Problems, Research Problems, andCasesWehaveusedagroupdiscussionicontohighlightproblemsthatareparticularlywell-suited for class discussion. Most chapters have at least one oftheseproblems.Theseproblemsareagreatwaytoinvolvetheclassindiscussion to help them understand the application of course material.Research problems that require students toresearch auditing standards andtosearch for information using anumber ofInternet-basedresources are includedin theend-of-chapter material formostchapters.Many of these assignments requirestudents to use the Internet toresearch relevant auditingstandards andissues,andother research problemsexpose students to real-world events,such as actual10-K annual reports, management reports on internal control over financial reporting,andSEC enforcement actions related to fraud investigations.These assignmentsprovideopportunitiesforstudentstoengageinresearchactivitiesoutsideoftraditional homework problems tobecome familiar with how to work with auditingstandards and tolearn aboutissues affecting the audit process.

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xiiMost chapters include Cases thatchallenge students beyond what is requiredin other end-of-chapter problems.Theyare generally more complex than otherhomework problems.Thus, we sometimesassign these as group assignments thatcan be workedonoutside of class,or weassign them as in-class assignmentswherebystudentsworktogethertodevelopagroupsolutiontothecaseforsubsequent class discussion.Pinnacle Manufacturing Integrated CaseFor instructors who are interested in providing a more complex case thatstudents can work across multiple chapters, we have included the PinnacleManufacturing Integrated Case.This seven-part case givesstudents a hands-onexperience that begins in Chapter 8 and concludes in Chapter 16.The case can beworked individually or in small teams.We always use the Pinnacle case and assignit to small teams of three or four students, and assign a significant percentage of thefinal course grade to the case.We made additional changes to this case for theseventeenthedition, which distinguishes this case from prior editions.Use of ACL SoftwareInstructions for installing and usingACL Softwareare included on the textWebsite.Studentsusethissoftware,whichincludesseveralhypotheticaldatabases, tocomplete ACL-based homework problems in selected chapters.Theproblems that use ACL software are 7-35, 8-37, 10-34, 12-35, 14-35,15-34,16-37,and 17-33. These problemsinclude the Data Analytics iconin the margin nexttothe problemand we designate them as ACL problems next to the problem number.Instructors who want to provide more detailed coverage of ACL software can useData Analytics forAuditing Using ACL,FourthEdition (2017) by Alvin A. Arens,Randal J. Elder, and Carol J. Borsum. This resource is designed for useas asupplement in either an undergraduate or advanced auditing course andcontainsaccess to the most current version of thesoftware, along with data sets for12companies. Students work through this 25-to 35-hour project outside of class time,but the project alsoprovides great flexibility for you to cover important conceptsinclass.AftercompletingComputerizedAuditingUsingACLDataAnalytics,students will have anin-depth understanding of how audit software is used inpractice for both dataanalysis and audit testing.Assignment ofExcelProblems in the TextbookIn the chapter problem materials, there are problems that can be solved usingExcel.Most of those have a spreadsheet icon in the margin next to the problem sothat you can easily identify them.You may assign these problems to be donemanually, with the computer, or both, at your discretion. In the solutions manual, weoffer solutions on both bases. In addition, we offer the solution templates and relevantdata files on theInstructor’s Resource Center.There are other problems that do nothave the spreadsheet icon next to the problem; however, the use of Excel could beused to solve the problem.

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xiiiThe listbelownotesall oftheproblems that can be assigned for solvingwithcomputer assistance through the use of Excel software, along with the relatedsolutionfile names on the Website.PROBLEMNUMBEREXCELFILE NAME7-377-408-318-3912-3715-2815-2915-3916-3917-2617-2817-2917-3217-3417-3518-3021-2621-3023-2023-2324-31P737.xlsP740.xlsP831.xlsP839.xlsP1237.xlsP1528.xlsP1529.xlsP1539.xlsP1639.xlsP1726.xlsP1728.xlsP1729.xlsP1732.xlsP1734.xlsP1735.xlsP1830.xlsP2126.xlsP2130.xlsP2320.xlsP2323.xlsP2431.xlsThe files listed above are available on theInstructor’s Resource Center.Instructor’s Resource CenterTheInstructor Resource Center for theArens/Elder/Beasley/Hogantext(www.pearsonhighered.com/arens) includes a wide variety of resources.Ifneeded,periodic updates of major professional developments may be posted on theInstructor’s Resource Centerfor instructor download and review.Other Resources That We UseIn addition to the many features included in thisseventeenthedition ofAuditing andAssurance Services:An Integrated Approach, there are several other resourcesthat we find useful as complementary materials and assignments.

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xivUse ofSystemsUnderstanding AidWe find the use of the publication,Systems Understanding Aid, Alvin A. Arensand D. Dewey Ward,Armond Dalton Publishers, Inc., (2016) to be extremely useful.The aid is a self-study document that has students work through asimpleaccounting system, including application of internal controls. It is typically assignedto be done outside of class during the first four weeks, prior to the study of internalcontrol. The aid will give students an adequate familiarity with documents andrecords to increase their understanding of internal control.Use ofIntegrated Audit Practice CaseTheIntegrated Audit Practice Case, David S. Kerr, Randal J. Elder, andAlvinA. Arens, Armond Dalton Publishers, Inc., (2017) can be used to give studentshands-on experience making audit judgments and completing audit documentation.The case can be completed individually or in groups, and includes 10 assignmentsthat can be assigned throughout the semester. The assignments take studentsthrough the planning phase, evaluation of internal control and performance of testsof transactions, substantive tests of balances, and completing the audit. The caseincludesfilesthat allow students to complete selected assignments inExcel.Use ofAuditing CasesAuditing Cases: An Interactive Learning Approach,SeventhEdition (2019)byBeasley, Buckless, Glover, and Prawitt is an excellent supplement to the textbook.This collection of50auditing cases addresses most majoractivities performedduring an audit, from client acceptance to issuance of an auditreport. Many of thecases are based on actual companies, some of which wereengaged in financialreporting fraud. Several cases involve students working with realistic audit evidenceand preparing and evaluating audit documentation.Auditing Cases: An InteractiveLearning Approachprovides instructors an easy opportunity to introduce short activelearningexercisestopromotein-classdiscussionsofreal-worldauditissuesthroughout the introductory auditing course.Suggested Term ProjectsInadditiontothecasesincludedinmanyofthechaptersandthePinnacleManufacturing Integrated Case, we identify twoadditional potential term projects.1.Have students obtain a public company’s recent Form 10-K filing with theSEC and, using a team approach, prepare an analysis of business risksaffecting 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 paymentcycle of a small manufacturing company from flowcharting the system todesigning the audit program.Syllabus excerpts for eachproject follow.

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xvTERM PROJECT 1Analysis and Audit PlanThe objectives of this project are as follows:1.To acquaint students with the Form 10-K of a publicly held company auditedby a CPA firm.2.To provide data for the practicalapplication of certain steps in the auditprocess.3.To allow students to experience working in teams, as is done in actualauditing.Detailed Instructions1.Form a group of four persons. Discuss how youwill organize (assignresponsibilities) tocomplete this project in a suitable format.2.Visit the SEC’sWebsite(www.sec.gov)to obtain a copy of a recent Form10-K filing by a publicly held company with stock actively traded on the NewYork, NASDAQ,or other over-the-counter exchanges. Answer the followingquestions: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■employeese.Where isthe 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 duringauditplanning?3.Obtain outside information about the company and its industry. Answer thefollowing 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 mostimportant factors for success in thisbusiness?d.How does this company stand with respect to these factors?e.Describe four or five key business risks related to the client’s businessand industry.f.What notable accounting considerations are there for companies in thisindustry?g.What legal or regulatory matters are of concern?h.What social matters are of concern?

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xvi4.Analyze the company’s financial strength:a.Assess the financial strength of the company.b.How is the financial strengthlikely to change in the next year or so?c.What are its sources of capital,and what is the value of the company’scapital?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 riskstobe significant risks?c.What are the low-risk areas?d.If management faced tremendous pressure regarding the entity’sfinancialperformance, what opportunities might exist for them to engagein fraudulentfinancial reporting?e.To what extent do you believe it will be appropriate to reduce assessedcontrol 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 organizedand how it functioned on the project.The project will be graded as follows:ITEMCONTENTSTYLETOTAL2to45640%30%10%80%20%20%100%This project accomplishes several purposes. First, it relates the course content toa real (although broadly presented) situation. The students get the idea of auditing thebusiness, not just the books. Students are confronted–some for the first time–withhaving to obtain, study, and understandcontent in a Form 10-K. They have tothinkabout such things as business risk and allocation of scarce resources as adecision-maker.Having the project done byteamsis an important part of the approach. Audits aredone by teams and auditors must learn to operate successfully in this mode. Theteam’s report determines the grade for each member of the team, regardless of howthe team allocated effort. In grading the report, 20 percent of the grade is based oncommunication quality. This includes organization, style, grammar, neatness, etc.Since effective communication is so essential in practice, this skill receives emphasisin many ways throughout the course.

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xviiBecause students select the company and year to be studied, we do not presenta 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 andreadthe 10-K report.Week 10–Complete and hand in project.

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xviiiTERM PROJECT 2Internal Control and Audit Program CaseYou are provided with the following description of the accounting system and internalcontrols 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, whothen sends them to the purchasing department. Purchasing department employeesenter the purchase requisition information into the computer, which automaticallygenerates a purchase order in sequential order. The system automatically generatesan electroniccopy of the purchase order, which is sent by purchasing departmentemployeesto the vendor. The receiving department electronically accesses a copy of thepurchaseorder, which is printed to serve as a receiving report.Delivered materials are immediately sent to the storeroom. The completedreceiving report, which is a printed copy of the purchase order, is sent to the purchasingdepartment. A copy of the receiving report is sent to the storeroom.Materials areissued to factory employees subsequent to the verbal request by one of the foremen.When the mailroom clerk receives vendors’invoices, he or she forwards themto the purchasing department employee who placed the order. The invoice is comparedwith 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 checkingfootings, extensions, anddiscounts on the vendor invoice, the employee indicatesapproval for payment by initialing the invoice. The invoice is then forwarded to theaccounting department (voucher section) where it is coded for account distribution,assigned a voucher number, and entered into the accounting system for recording inthe voucher register. The system tracks invoices due by payment date due. Thepurchase 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 acash disbursements journal, updates the accounts payable master file, and indicatesthe payment date for the voucher register. Prenumbered checks are sent to thecashier, who puts them through the check-signing machine. The checks are thensent to the voucher section that makes sure that the checks were correctly prepared.The checks are placed in envelopes and sent to the mailroom. Thevouchers aresubsequently filed in numerical order. At the end of each month, a computer listing ofvoucher and cash disbursement transactions, and an outstanding accounts payablelist is prepared.The Treasurer reviews monthly reports of acquisitions by vendor to identify keyvendors. This is used to determine whether any represent key vendors that should bedisclosed, and whether the company faces risk due to overreliance on a few vendors.

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xixRequired:1.Prepare a flowchart for the acquisition and the payment cycle for JohnsonMachinery Company.2.List the controls in existence for each of the seventransaction-relatedauditobjectives for acquisitions.3.For each control in part 2, list one test of control procedure for verifying itseffectiveness.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 thedeficiencies listed in part 4.6.Suggest a system alteration for JMC that would correct each of thedeficiencies identified in part 4. Be sure to keep cost/benefit in mind.7.Design an audit program to test internal control. The program shouldinclude, but not be limited to, tests of controls from part 3 and procedures tocompensate for the deficiencies in part 4.The solution to Term Project 2 is included on the following pages.

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xxSolution to Term Project 2Requirement 1Johnson Machinery CompanyMaterials PurchasesPurchasing DepartmentPlant ForemanReceivingDepartmentStoreroomAccounting (Vouchersection)CashierMailroomApproves andsubmits purchaserequisitionPurchase requisitionTo vendorGood receivedGoods transferredto storeroom(1)Purchase order usedas receiving reportComputer-generatedprenumberedpurchase orderCopy of receivingreportVendors invoicePurchase orderCopy of receivingreportVendors invoiceapproved forpayment(3)System generateschecks anddisbursement listing(4)ChecksDisbursement listingUpdate A/Pmaster fileChecksPORRNotes1.Goods issued to employees on verbalrequest of foreman.2.Purchasing compares invoice to PO and RR.3.Invoice coded for account distribution,assigned a voucher number, and entered intothe accounting system for recording in voucherregister. System tracks payments by due dateand generates request for payment when due.4.Cashier runs checks through check-signingmachine.2Receive vendorsinvoiceVendors invoiceChecks mailedChecksVerify checks arecorrectly preparedand place inenvelopesChecksInvoice/voucher

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xxiRequirements 2 and 3Note: The focus of this problem is on the acquisitions and payments cycle. There would be other controls relatedto the cash disbursements cycle.aTested by reperformance since no independent verification.Transaction-Related AuditObjectiveControls in Place (Req. 2)Test ofControl(Req.3)1.Recorded acquisitions are forgoods and services received,consistent with the bestinterests of the client(occurrence)1a. Purchase requisitionsare approved by theplant foreman1b. Vendors’ invoices,receiving reports, andpurchase orders arecompared for quantity,price and terms1a. Examine indicationof approval1b. Examine initialsindicatingverification andapproval forpayment2.Existing acquisitiontransactions are recorded(completeness)2a. Purchase ordersareprenumbered2b. Receiving reports (copyof PO) are prenumbered2a. Account forsequence ofpurchase orders2b. Account forsequence ofreceiving reports3.Recorded acquisitiontransactions are accurate(accuracy)3a. Calculations andamounts areverified bypurchasing departmentemployee3a. Examine initialsindicatingverification andapproval forpayment4.Acquisition transactions arecorrectly included in theaccounts payable andinventory master files and arecorrectly summarized (postingand summarization)4. Invoices are entered intothe accounting systemby the accountingdepartment4. Compare invoices toamounts enteredinto accountspayable andinventory masterfilesa5.Acquisition transactions arecorrectly classified(classification)5. Accounting departmentcodes the invoice foraccount distribution5. Review for properaccount distributiona6.Acquisition transactions arerecorded on the correct date(timing)6. Invoices are recordedwhen received by theaccounting departmentonce approved forpayment6. Compare dates ofreceiving reportswith dates in theacquisition journala7.Acquisition transactions areproperly aggregated andrelated disclosures in thefinancial statements arerelevant and understandable(presentation)7. Treasurer reviewsmonthly reports ofacquisitions by vendorto determine whetherany require disclosure7. Examine evidence ofthe Treasurer’sreview to evaluateproper disclosurea

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Requirements 4, 5 and 6Req. 4DeficienciesReq. 5Risk of Error or FraudReq. 6-Potential Suggestionsfor ImprovementNo approvals are requiredby individuals in thepurchasing department.Only the plant foreman,who receives custody ofthe goods purchased,approves thepurchase.The lack of approval beyond that of the plant foremanmight result in the use of company resources for thewrong types of purchases. The foreman might makean error in the types and quantities of items needed,resulting in error.Currently, there is a lack of segregation of duties giventhe foreman has the ability to approve purchases andhas 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 requisitionsshould be separated from those with custodyof the goods purchased. Purchasingdepartment personnel should haveresponsibility for authorizing the purchaseorders based on predetermined criteria,(such as production schedules for the plant).Additionally, the approval of the processingof payment should reside with someone in aTreasurer (or other senior leadership role).That approval would include review of thepurchase order, receiving report, and invoiceto ensure all payments are for legitimate andappropriate business use by JohnsonMachinery Company.There is no preapprovedlist of vendors thatpurchasing departmentpersonnel are authorizedto use. There also are nopre-established spendingthresholds of how muchcan be purchased withoutadditional managementapprovals.Without a pre-specified list of approved vendors andgoods that are allowed for purchase, purchasingpersonnel may make purchases from low-quality orunreliable suppliers, resulting in products that may notbe acceptable or purchases from vendors who are notable to deliver on a timely basis.Without an approved list of vendors, purchasingpersonnel might collude with illegitimate vendors toengage in fraud, or purchasing staff might createfictitious vendors to process fraudulent payments tothemselves.Management should review and approve aset of approved products and approvedvendors that satisfy pre-determined criteria,such as type and quality of product orservice delivery, reliability timeliness, andfinancial viability.Purchasing staff would only be able topurchase products from vendors on the pre-approved vendor and product list; otherwise,they would be required to obtain additionalmanagement approvals.xxii

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Req. 4DeficienciesReq. 5Risk of Error or FraudReq. 6-Potential Suggestionsfor ImprovementPersonnel in the receivingdepartment rely on a copyof the purchase order toserve as the receivingreport. Receivingdepartment personnel cansee the quantity orderedgiven they have access tothe full purchase order.Receiving department personnel may notindependently verify the types and quantities of goodsactually received when those goods arrive. Instead,they may rely on the product and quantity descriptionsalready on the purchase order to indicate what isreceived. There is a risk that the types and quantitiesof products received are not the same as thoseordered; however, that error may go undetectedwithout independent verification.If more than the amount of product is received thanwhat was ordered, receiving department personnelcould fraudulently take the excess quantities forpersonal use.Receiving department personnel should onlyhave “READ ONLY” access to an electroniccopy of the purchase order and they shouldnot be able to see the quantity of productsordered.Receiving department personnel shouldprepare a stand-alone receiving report torecord the types and quantities of productsreceived based on their independentverification when the products arrive inreceiving.Receiving reports are notprenumbered or accountedfor.There is no reliable method of determining thepopulation of outstanding receiving reports. Goodsmight be received that have not been invoiced, whichmay increase the risk of having unrecorded payables.Separate prenumbered receiving reportsshould be prepared and the sequence ofused and unused receiving reports should beregularly accounted for.Personnel in thepurchasing departmentreceive the invoice fromthe mailroom and theycompare the invoice to thepurchase order andreceiving report (which is acopy of the purchaseorder). Accounting has noresponsibility forindependently matchingpurchase order, receivingreport, and invoice.The purchasing department may not reconcileaccurately the information on the purchase order,receiving report, and invoice, resulting in errors thatmight include payment for goods not received orpayment for goods not ordered.There is risk of collusion between purchasingdepartment personnel and those in the storeroom andreceiving departments given that they could order andreceive goods for personal use, and then approve thegoods for payment.The mailroom should forward all invoices tothe accounting department upon receipt. Thepurchasing department should also forward acopy of all purchase orders generated andthe receiving department should forward acopy of the receiving report to the accountingdepartment. The accounting departmentshould then be responsible for theindependent matching of all three documentsto ensure agreement. The set of matcheddocuments should then be provided to anindividual outside of accounting with check-signing authority for review and paymentapproval. Final storage of the matcheddocuments should be in accounting.xxiii

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Req. 4DeficienciesReq. 5Risk of Error or FraudReq. 6-Potential Suggestionsfor ImprovementMaterials are issued to thefactory employees basedon a verbal request by theforeman.Materials may be used incorrectly or inefficiently,resulting in waste and loss.Individuals could remove goods for fraudulent use.Procedures for releasing materials from thestoreroom to the plant should include a seriesof approvals. Products that are releasedshould be reconciled to a productionschedule to ensure only those productsneeded for production are released.Once the purchasingdepartment matches thepurchase order, receivingreport, and invoice, no oneelse is involved inapproving the payment.Payments may occur that are not for approved orappropriate business purposes for JohnsonMachinery. Products might be ordered by thepurchasing department in error or fraudulentpurchases might be made by the purchasingdepartment that would go undetected.Approval of final payment should be made bysomeone in the treasury role or otherindividuals who are part of the seniormanagement team. The ability to approve thepayment for a purchase should not reside inaccounting, purchasing, receiving, storeroom,or plant departments.While vouchers are filednumerically, there is noindication that thesequencing of vouchers isaccounted for.Vouchers might be missing and thus payment wouldnot be made to vendors on a timely basis.Alternatively, duplicate vouchers might be createdwith payment processed twice.Establishing proper cut-off of vouchers at anaccounting period end would be difficult to establish,potentially resulting in incorrect timing of the recordingof transactions.Someone independent in the accountingdepartment should account for thesequences of vouchers on a regular basis.Checks signed by thecheck signing machine areforwarded to accountingdepartment personnel whoreview the paymentaccuracy and forwardchecks to the mailroom.Accounting department personnel could create falsevoucher package documentation and thenfraudulently divert the checks for personal use.The cashier should process the mailing of allchecks to the vendor after they have beenapproved and signed.xxiv

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Req. 4DeficienciesReq. 5Risk of Error or FraudReq. 6-Potential Suggestionsfor ImprovementThere is no indication thatthere is any reconciliation ofcomputer listings (voucher,cash disbursement, andoutstanding accountspayable list).There may be errors in posting transactions in the cashdisbursement transactions and in the accounts payablelisting.Someone in the accounting departmentshould reconcile the cash disbursementtransactions computer listing to postingsof vendor payment in the accountspayable list.xxv

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xxviRequirement 7Audit Program Steps1.Randomly select a sample of transactions from the Cash Disbursements Journalduring the year. Perform the following for each transaction selected:a.Vouch the payment in the Cash Disbursement Journals to the voucherpackage and determine that approvals for the review of the voucher areindicated on the voucher document.b.Obtain the related invoice from accounting and determine if the purchasingdepartment approvals of the footings, extensions, and discounts are presenton the invoice indicating review and approval occurred. Reperform thefootings, extensions, and discounts to verify accuracy.c.Obtain the related purchase order and receiving report documents stored inthe purchasing department. Verify that there is agreement of goods purchasedand received on the purchase order and receiving report or that discrepancieshave been reconciled by the purchasing department personnel as part of theirreview.d.Based on the review of the purchase order, receiving report, and invoice,determine that the quantities of products received agree with those on theinvoice. Also review nature and quantity of goods purchased and received forreasonableness and appropriateness.e.Review the account coding indicated on the invoice for reasonableness withthe chart of accounts.f.Verify accuracy and timeliness of the posting of the transaction in theacquisitions journal, cash disbursements journal and accounts payable masterfile.2.Account for the sequence of outstanding receiving reports to determine if any goodshave 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 theacquisitions journal.4.Select a sample of voucher packages with invoices and trace them to the acquisitionsjournal.5.Review the acquisitions journals, cash disbursement journal, and accounts payablelist for large or unusual amounts or items, including potential related parties.6.Examine evidence of Treasurer’s review of monthly reports of acquisitions by vendorsto evaluate the adequacy of that review for transactions requiring disclosure in thefinancial statements.

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xxviiSummary of Additional, Changed, and Deleted Problem MaterialWe have added newend-of-chapter homework problems and revised others inthisseventeenthedition ofAuditing and Assurance Services: An Integrated Approach.If you havepreviously used thesixteenthedition of our book, you may want toreviewthis list ofnew, revised, or deleted homeworkproblems in theseventeentheditionrelative to problems you may have used in thesixteenthedition.Question/Problem/Case # in 16/eQuestion/Problem/Case # in 17/eCommentsCHAPTER 11-151-16Modifiedfor 17/e1-161-17Modifiedfor 17/e1-17 through 1-191-18through 1-20Shifted number, same problem1-201-21Modifiedfor 17/e1-21 through 1-241-22 through 1-25Shifted number, same problemCHAPTER 22-162-16Modifiedfor 17/e2-172-17Modifiedfor 17/e2-182-18Unchanged for 17/e2-192-19Modifiedfor 17/e2-202-20Unchanged for 17/e2-21Deletedfor 17/e2-21New for17/e2-22New for17/eCHAPTER 33-233-23Unchanged for 17/e3-243-24Modifiedfor 17/e3-25Deleted for 17/e3-263-26Unchanged for 17/e3-273-25Modified for 17/e3-27New for17/e3-283-28Unchanged for 17/e3-293-29Modifiedfor 17/e3-303-30Modifiedfor 17/eCHAPTER 44-204-21Shifted number, same problem4-21through 4-234-22through 4-24Modified for 17/e4-244-25Shifted number,same problem4-254-27Shifted number, same problem4-264-26Modified for 17/e4-274-28Shifted number, same problem4-29New for17/e4-28 through 4-304-30 through 4-32Shifted number, same problemCHAPTER 55-175-19Shifted number, same problem

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xxviiiQuestion/Problem/Case # in 16/eQuestion/Problem/Case # in 17/eComments5-185-17Modifiedfor 17/e5-195-18Modifiedfor 17/e5-20through5-225-20through5-22Unchanged for 17/e5-235-23Modifiedfor 17/e5-245-24Modifiedfor 17/e5-25Deleted for 17/e5-25New for17/e5-26New for17/e5-265-27Modifiedfor 17/e5-275-28Shifted number, same problemCHAPTER 66-24 through6-296-25 through 6-30Shifted numbers,same problems6-30 through 6-336-31 through 6-34Modifiedfor 17/e6-34Deletedfor 17/e6-35New for17/eCHAPTER 77-25 and 7-267-27 and 7-28Modifiedfor 17/e7-277-29Shifted number, sameproblem7-28and 7-297-30and 7-31Modifiedfor 17/e7-307-32Shifted number, same problem7-317-33Modified for 17/e7-32Deleted for 17/e7-337-34Modified for 17/e7-34and 7-357-36and 7-37Shifted number, same problem7-36Deletedfor 17/e7-377-40Shifted number, same problem7-38New for17/e7-38Deletedfor 17/e7-397-35Shifted number, same problem7-39New for 17/eCHAPTER 88-29 and 8-308-27 and 8-28Shifted numbers, same problems8-29New for17/e8-31and 8-328-30 and 8-31Shifted numbers, same problems8-33Deleted for 17/e8-34 through 8-388-32 through 8-36Shifted numbers, same problems8-398-38Shifted number, same problem8-408-39Modified for 17/e8-418-37Shifted number, sameproblemCHAPTER 99-29through 9-319-29through9-31Unchanged for17/e9-32New for 17/e9-329-33Shifted number, same problem

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