Chapter 1 Assurance Services p. 2
Introduction p. 3
A. Need for Assurance p. 3
B. The Special Role of Financial Statement Audits p. 12
C. The Providers of Assurance Services p. 17
D. Other Professional and Regulatory Organizations p. 20
Chapter 2 Corporate Governance, Serving Client and Public Interests, and Audit Professionalism p. 34
A. Corporate Governance: Serving Client and Public Interests p. 35
B. Maintaining Professionalism: Standards p. 41
C. Maintaining Professionalism: Ethical Framework p. 50
D. Maintaining Professionalism: Ensuring Quality p. 63
Chapter 3 The Audit Process p. 80
A. Overview of Audit Process p. 81
B. Materiality and Audit Risk p. 92
C. Management Assertions p. 101
D. Audit Evidence and Procedures p. 104
Chapter 4 Understanding Business Risk: A Framework for Audit Planning p. 120
A. Business Risk: Audit Implications p. 121
B. Using Analytical Tools to Develop Expectations p. 134
C. Risk Analysis: Auditor Responsibility for Detecting and Reporting Fraud and Other Misstatements p. 140
D. Risk Analysis and the Conduct of the Audit p. 147
Chapter 5 Evaluating the Integrity and Effectiveness of the Client's Control Systems p. 170
A. A Framework for Control p. 171
B. A Framework for Understanding and Evaluating Internal Controls p. 179
C. Control Risk Assessment p. 197
Chapter 6 Computer-Based Processing: Developing an Audit Assessment Approach p. 224
A. Introduction p. 225
B. General and Application Controls p. 233
C. Overview of Control Risk Assessment Process p. 253
D. Electronic Data Interchange and Electronic Commerce p. 257
Chapter 7 Direct Tests of Account Balances p. 278
A. Overview of Evidence for Directly Testing Financial Statement Items p. 279
B. Audit Procedures p. 286
C. Audit Programs and Documenting Audit Evidence p. 297
Chapter 8 Auditing Computerized Information Systems p. 320
A. Computer Audit Tools to Test Computer Processing p. 321
B. Using the Computer to Help Test Accounting Records p. 333
C. Unique Audit Approaches for Electronic Commerce p. 338
D. Use of Personal Computing in Conducting an Audit p. 342
Chapter 9 Auditing Revenue and Related Accounts p. 360
A. Introduction p. 361
B. Assessment of Environment Risk p. 366
C. Substantive Testing in the Revenue Cycle p. 380
Chapter 10 Audit Sampling p. 426
A. Introduction p. 427
B. Nonstatistical Sampling p. 438
C. Probability Proportional to Size Sampling p. 441
Chapter 11 Audit of Acquisition Cycle and Inventory p. 492
A. Audit of the Acquisition Cycle p. 492
B. Audit of Inventory and Cost of Goods Sold p. 502
Chapter 12 Auditing Liquid Assets p. 532
A. Introduction p. 532
B. Audits of Cash Accounts p. 538
C. Marketable Securities and Financial Instruments p. 553
Chapter 13 Audit of Other Assets and Long-term Financing p. 574
A. Audit of Property, Plant, and Equipment p. 574
B. Audits of Mergers and Acquisitions p. 583
C. Audits of Financing Activities p. 588
Chapter 14 Completing the Audit p. 606
A. Final Review of the Audit p. 607
B. Subsequent Events p. 623
Chapter 15 Communicating Levels of Assurance p. 636
A. Audits, Reviews, and Compilations of Historical Financial Statements p. 637
B. Reports on Other Financial Information p. 659
C. Reports on Non-Financial and Other Information p. 666
Chapter 16 Professional Liability p. 692
A. The Legal Environment Affecting Litigation against Auditors p. 692
B. Legal Concepts p. 695
C. Approaches to Mitigating Liability Exposure p. 705
Chapter 17 Internal and Value-Added Auditing p. 724
A. Internal Auditing p. 724
B. Scope of Value-Added Internal Auditing p. 732
C. Trends in Value-Added and Internal Auditing p. 744
Appendix IDEA Tutorial and Cases p. 756
Tutorial p. 756
IDEA Case 1 Fraud p. 843
IDEA Case 2 Accounts Receivable p. 844
IDEA Case 3 Inventory p. 845
Case Index p. 847
Index p. 848