EBOOK: Auditing and Assurance Services
1st Edition
Published on 16. November 2013
752 pages
978-0-07-714302-2 (ISBN)
Description
Auditing & Assurance Services, Third International Edition, takes a truly international approach to auditingand reflects the most current auditing approaches by the major international audit firms and the mostrecent International Financial Reporting Standards (IFRSs), International Standards on Auditing (ISAs), otherIAASB standards and the IESBA Code of Ethics for Professional Accountants.
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Aasmund Eilifsen | William Messier Jr | Steven Glover
Auditing and Assurance Services, Third International Edition with ACL software CD
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11/2013
3rd Edition
McGraw Hill Higher Education
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Content
- Intro
- Auditing & Assurance Services
- Detailed Table of Contents
- About the authors
- Preface
- Acknowledgements
- Guided Tour
- PART I Introduction to assurance and financial statement auditing
- 1 An introduction to assurance and financial statement auditing
- Tips for learning auditing
- The demand for auditing and assurance
- An assurance analogy: the case of the building surveyor
- Auditing and assurance defined
- Fundamental concepts in conducting a financial statement audit
- Sampling: inferences based on limited observations
- The audit process
- Conclusion
- Key terms
- Review questions
- EarthWear Annual Report
- (See colour section)
- 2 The financial statement auditing environment
- Types of auditors
- Types of other audit, assurance and non-assurance services
- Audit firms
- A decade of challenge and change for financial statement auditors
- Society's expectations and the auditor's responsibilities
- The context of financial statement auditing
- A model of business
- A model of business processes: five components
- Organizations that affect the auditing profession
- International standards on auditing
- Ethics, independence and the code of ethics
- Conclusion
- Advanced module 1: auditors' legal liability
- Advanced module 2: professional judgement framework - understanding and developing professional judgement in auditing
- Key terms
- Review questions
- PART II Audit planning and basic auditing concepts
- 3 Audit planning, types of audit tests and materiality
- Client acceptance and continuance
- Preliminary engagement activities
- Planning the audit
- Supervision of the audit
- Types of audit tests
- Materiality
- Key terms
- Review questions
- 4 Risk assessment
- Audit risk
- The audit risk model
- Use of the audit risk model
- The auditor's risk assessment process
- Evaluating the entity's risk assessment process
- Assessing the risk of material misstatement
- The fraud risk assessment process
- The auditor's response to the results of the risk assessments
- Evaluation of audit test results
- Documentation of the auditor's risk assessment and response
- Communications about fraud to management, those charged with governance and others
- Key terms
- Review questions
- 5 Evidence and documentation
- The relationship of audit evidence to the audit report
- Management assertions
- The concepts of audit evidence
- Audit procedures for obtaining audit evidence
- Reliability of the types of evidence
- The audit testing hierarchy
- Audit documentation
- Advanced module 1: analytical procedures
- Advanced module 2: selected financial ratios useful as analytical procedures
- Key terms
- Review questions
- PART III Internal control
- 6 Internal control in a financial statement audit
- Introduction
- Internal control - an overview
- The COSO framework
- Planning an audit strategy
- Obtaining an understanding of internal control
- Assessing control risk
- Substantive procedures
- Timing of audit procedures
- Auditing accounting applications processed by service organizations
- Communication of deficiencies in internal control
- Advanced module 1: types of controls in an it environment
- Advanced module 2: computer-assisted audit techniques
- Advanced module 3: flowcharting techniques
- Key terms
- Review questions
- 7 Auditing internal control over financial reporting
- Management responsibilities under section 404
- Auditor responsibilities under sections 404 and AS5
- Internal control over financial reporting defined
- Internal control deficiencies defined
- Management's assessment process
- Performing an audit of ICFR
- Planning the audit of ICFR
- Using a top-down, risk-based approach to identify controls to test
- Testing the design and operating effectiveness of controls
- Evaluating identified control deficiencies
- Remediation of a material weakness
- Written representations
- Auditor documentation requirements
- Auditor reporting on ICFR
- Other reporting issues
- Additional required communications in an audit of ICFR
- Advanced module: special considerations for an audit of internal control
- Key terms
- Review questions
- PART IV Statistical and non-statistical sampling tools for auditing
- 8 Audit sampling: an overview and application to tests of controls
- What if you were an apple inspector?
- Introduction
- Definitions and key concepts
- Types of audit sampling
- Attribute sampling applied to tests of controls
- Non-statistical sampling for tests of controls
- Conclusion
- Advanced module 1: considering the effect on sample size of a small population
- Advanced module 2: comparing terminology for attribute sampling between ACL and sampling tables
- Key terms
- Review questions
- 9 Audit sampling: an application to substantive tests of account balances
- Sampling for substantive tests of details of account balances
- Monetary-unit sampling
- An extended example
- Non-statistical sampling for tests of account balances
- Advanced module 1: classical variables sampling
- Advanced module 2: comparing terminology for monetary-unit sampling between ACL and manual calculation
- Key terms
- Review questions
- PART V Auditing business processes
- 10 Auditing the revenue process
- Revenue recognition
- Overview of the revenue process
- Inherent risk assessment
- Control risk assessment
- Control activities and tests of controls: revenue transactions
- Control activities and tests of controls: cash receipts transactions
- Control activities and tests of controls: sales returns and allowances transactions
- Relating the assessed level of control risk to substantive procedures
- Auditing revenue-related accounts
- Substantive analytical procedures
- Tests of details of classes of transactions, account balances and disclosures
- The confirmation process: accounts receivable
- Auditing other receivables
- Evaluating the audit findings: revenue-related accounts
- Key terms
- Review questions
- 11 Auditing the purchasing process
- Expense and liability recognition
- Overview of the purchasing process
- Inherent risk assessment
- Control risk assessment
- Control activities and tests of controls: purchase transactions
- Control activities and tests of controls: cash disbursement transactions
- Control activities and tests of controls: purchase return transactions
- Relating the assessed level of control risk to substantive procedures
- Auditing accounts payable and accrued expenses
- Substantive analytical procedures
- Tests of details of classes of transactions, account balances and disclosures
- Accounts payable confirmations
- Evaluating the audit findings: accounts payable and related accounts
- Advanced module: auditing income tax expense and related accounts
- Key terms
- Review questions
- 12 Auditing the human resource management process
- Overview of the human resource management process
- Inherent risk assessment
- Control risk assessment
- Control activities and tests of controls: payroll transactions
- Relating the assessed level of control risk to substantive procedures
- Auditing payroll-related accounts
- Substantive analytical procedures
- Tests of details of classes of transactions, account balances and disclosures
- Evaluating the audit findings: payroll-related accounts
- Advanced module: auditing share-based compensation
- Key terms
- Review questions
- 13 Auditing the inventory management process
- Overview of the inventory management process
- Inherent risk assessment
- Control risk assessment
- Control activities and tests of controls: inventory transactions
- Relating the assessed level of control risk to substantive procedures
- Auditing inventory
- Substantive analytical procedures
- Auditing standard costs
- Observing physical inventory
- Tests of details of classes of transactions, account balances and disclosures
- Evaluating the audit findings: inventory
- Key terms
- Review questions
- 14 Auditing the financing/investing process: prepaid expenses
- intangible assets and goodwill
- and property, plant and equipment
- Auditing prepaid expenses
- Inherent risk assessment: prepaid expenses
- Control risk assessment: prepaid expenses
- Substantive procedures: prepaid insurance
- Auditing intangible assets and goodwill
- Inherent risk assessment: intangible assets and goodwill
- Control risk assessment: intangible assets and goodwill
- Substantive procedures: intangible assets and goodwill
- Auditing the property management process
- Inherent risk assessment: property management process
- Control risk assessment: property management process
- Substantive procedures: property, plant and equipment
- Evaluating the audit findings: property, plant and equipment
- Key terms
- Review questions
- 15 Auditing the financing/investing process: long-term liabilities, stockholders' equity and income statement accounts
- Auditing long-term debt
- Inherent risk assessment: long-term debt
- Control risk assessment: long-term debt
- Assertions and related control activities
- Substantive procedures: long-term debt
- Auditing stockholders' equity
- Control risk assessment: stockholders' equity
- Auditing equity capital accounts
- Auditing dividends
- Auditing retained earnings
- Auditing income statement accounts
- Assessing control risk for business processes: income statement accounts
- Substantive procedures: income statement accounts
- Key terms
- Review questions
- 16 Auditing the financing/investing process: cash and investments
- Auditing cash
- Types of bank accounts
- Control risk assessment: cash
- Substantive procedures: cash
- Auditing investments
- Control risk assessment: investments
- Substantive procedures: investments
- Advanced module: auditing fair value measurements
- Key terms
- Review questions
- PART VI Completing the audit and reporting responsibilities
- 17 Completing the audit engagement
- Review for contingencies
- Review for commitments
- Review for subsequent events
- Final evaluation of audit evidence
- Communications with those charged with governance and management
- Key terms
- Review questions
- 18 Reports on audited financial statements
- Reporting on the financial statement audit: the standard audit report with an unmodified opinion
- An emphasis of matter paragraph or other matter paragraph added in the audit report
- Audit reports with modified opinion
- Discussion of conditions requiring audit reports with modified opinion
- Special reporting issues
- Reporting on comparative information
- Other information in documents containing audited financial statements
- Reporting on specialized areas
- Key terms
- Review questions
- PART VII Professional responsibilities
- 19 Professional ethics, independence and quality control
- Ethics and ethical professional behaviour
- IESBA code of ethics for professional accountants
- Auditor independence in the EU
- Quality control systems
- Key terms
- Review questions
- PART VIII Assurance, related services and internal auditing
- 20 Assurance, related services and internal auditing
- Assurance services
- Subject-matter specific assurance standards
- Review of historical financial information
- Related services
- Internal auditing
- Key terms
- Review questions
- Index
