Audit and Assurance Essentials

Introduction 1
1 Auditors, Audits and Other Types of Assurance and Passingthe Exam First Time 3
1.1 The Need for Audit and Other Types of Assurance 4
1.2 Passing the Exam First Time 13
2 Taking on Professional Work and Maintaining Standards23
2.1 Introduction to Professional Standards 24
2.2 Fundamental Principles, Threats and Safeguards 26
2.3 Changes in a Professional Appointment 32
2.4 Obtaining Professional Work 34
2.5 Professional Ethics: Fees 39
2.6 Professional Ethics: Confl icts of Interest and Hospitality43
2.7 Professional Ethics: Independence and Objectivity 45
2.8 Appointing and Removing Auditors 57
2.9 Agreeing Engagement Terms 61
3 Housekeeping: Planning, Materiality and Documentation67
3.1 Planning 68
3.2 Materiality 73
3.3 Audit Documentation 77
4 The Core of the Audit 87
4.1 Risk Assessments 87
4.2 Audit Evidence 113
4.3 Responding to Risk 128
4.4 Audit Tools 152
4.5 More Audit Tools: Using the Work of Others 196
4.6 Related Parties, Initial Engagements, Opening Balances andComparative Information 228
5 Corporate Governance, Professional Liability, Regulationand Other Current Issues 237
5.1 Corporate Governance 237
5.2 Professional Liability, Regulation and Other Current Issues250
6 Audit Reporting 265
6.1 Audit Finalisation 265
6.2 Modified and Unmodified Audit Opinions 275
6.3 Emphasis of Matter and Other Matter Paragraphs, GoingConcern 288
6.4 Communications with Management and those Charged withGovernance 299
6.5 Other Information 306
7 Fraud, Money Laundering, Forensic Accounting, FinancialInstruments 311
7.1 Fraud: Auditors' Responsibilities 312
7.2 Laws and Regulations: Auditors' Responsibilities322
7.3 Money Laundering 325
7.4 Forensic Accounting 331
7.5 Financial Instruments 335
8 The Wider Framework: Assurance, Other Engagements, AuditQuality and Quality Control 343
8.1 International Standards 345
8.2 Overall Objectives of Audits, the Framework For AssuranceEngagements, ISAE 3000 353
8.3 Audit Quality and Quality Control 371
9 Smaller Entity Audits, Reviews, Compilations, Agreed-UponProcedures Engagements, Not-For-Profit Engagements 383
9.1 Smaller Entity Audits 384
9.2 Overview of Reviews, Agreed-Upon Procedures and CompilationEngagements 387
9.3 Review Engagements 389
9.4 Compilation Engagements 398
9.5 Agreed-Upon Procedures Engagements 402
9.6 Not-For-Profit Engagements 406
10 Other Assurance Engagements 415
10.1 Introduction to Other Assurance Engagements 416
10.2 Assurance or Agreed-Upon Procedures: Key PerformanceIndicators 418
10.3 Social and Environmental Reporting and ISAE 3410 AssuranceEngagements of Greenhouse Gas Statements 421
10.4 Prospective Financial Information 428
10.5 ISAE 3420 Reporting on the Compilation of Pro-FormaFinancial Information in Prospectuses 433
IAASB Standards and Related Guidance Covered in This Publication437
Answers 439
Abbreviations 487
Index 489