Auditing.

Enhanced descriptions from Syndetics:

This text provides a thorough and up-to-date coverage of auditing in a concise and readable style. It is widely used as a course text on professional accountancy and accounting degree courses. Numerous case studies, exercises, self testing questions and recent examination questions are included. This text is aimed predominantly at undergraduate and professional accountancy courses and the ninth edition prepared by John Taylor has been updated to take account of new International Auditing Standards.

Table of contents provided by Syndetics

• Acknowledgements (p. xi)
• Preface (p. xiii)
• How To Pass Auditing Examinations (p. xvi)
• 1 Introduction to auditing - the why of auditing (p. 1)
• Introduction (p. 1)
• Agency theory (p. 1)
• Financial statements (p. 2)
• Why is there a need for an audit? (p. 3)
• Objectives of auditing (p. 4)
• The auditors' report (p. 5)
• Directors' responsibility (p. 6)
• Auditors' responsibility (p. 6)
• Organisation of the auditing profession (p. 6)
• Qualities required of auditors (p. 7)
• Types of audit (p. 7)
• 2 Corporate governance (p. 11)
• Introduction (p. 11)
• Cadbury and after (p. 11)
• Companies Act 2006 (p. 12)
• Sarbanes Oxley - 2002 (p. 12)
• Combined code on corporate governance - 2003 (p. 13)
• Substance over form (p. 14)
• Report on the directors' responsibilities for the financial statements (p. 15)
• Auditors' responsibilities (p. 16)
• Auditors' duties in respect of compliance with the combined code (p. 16)
• Directors' report on internal controls (p. 17)
• Directors' remuneration disclosure (p. 18)
• Audit committees (p. 18)
• 3 The statutory framework for auditing (p. 22)
• Introduction (p. 22)
• The Companies Act 2006 (p. 22)
• Requirement to have auditors (p. 23)
• Who can be an auditor? (p. 23)
• The rights and duties of an auditor under the Companies Act 2006 (p. 27)
• Appointment of auditors (p. 27)
• Remuneration of auditors (p. 28)
• The removal of an auditor (p. 28)
• Resignation of auditors (p. 30)
• Auditors' duties (p. 31)
• Auditors' rights (p. 32)
• The Auditors' report (p. 33)
• Auditors' rights to attend meetings (p. 36)
• Powers of an auditor (p. 36)
• 4 Accounting requirements of the Companies Act (p. 38)
• Introduction (p. 38)
• Accounting and accounting records (p. 38)
• Statutory books (p. 40)
• Accounting requirements (p. 41)
• Accounting principles (p. 43)
• Content - disclosure requirements (p. 43)
• True and fair override (p. 44)
• Procedure on completion of the financial statements (p. 44)
• Period allowed for filing accounts (p. 45)
• Abbreviated accounts (p. 45)
• Publication of accounts (p. 46)
• Summary accounts (p. 46)
• Dormant companies (p. 46)
• 5 Auditing and accounting standards and guidelines (p. 50)
• Introduction (p. 50)
• International standards on auditing (p. 50)
• Practice notes (p. 51)
• Bulletins (p. 52)
• Accounting standards (p. 53)
• 6 Rules of professional conduct (p. 57)
• Introduction (p. 57)
• Fundamental principles (p. 57)
• Ethics - general rules (p. 58)
• Threats (p. 59)
• Independence (p. 59)
• Commissions and fees (p. 61)
• Conflicts of interest (p. 62)
• Advertising and publicity (p. 63)
• Remuneration (p. 63)
• Insider dealing (p. 64)
• Money laundering (p. 64)
• Suspicious transactions (p. 65)
• Whistleblowing (p. 66)
• 7 Quality control in audit firms (p. 71)
• Introduction (p. 71)
• Audit firm organisation (p. 71)
• Individual audits (p. 73)
• Reviews (p. 74)
• 8 Accepting appointment as auditors (p. 78)
• Introduction (p. 78)
• Client screening (p. 78)
• Professional etiquette (p. 79)
• Letters of Engagement (p. 80)
• 9 Accounting systems and internal controls (p. 85)
• Accounting systems (p. 85)
• Internal controls (p. 86)
• Control procedures (p. 89)
• Control activities in specific areas of a business (p. 92)
• Limitations of internal controls (p. 98)
• 10 Audit planning, audit risk and materiality (p. 102)
• Introduction (p. 102)
• Objectives (p. 102)
• Required procedures (p. 103)
• Influences on an audit (p. 104)
• Stages in the audit (p. 105)
• Planning the audit (p. 105)
• Internal control system review (p. 109)
• Planning the audit work (p. 116)
• Audit strategies (p. 120)
• Analytical review procedures (p. 122)
• The timing of audit work (p. 122)
• Audit risk (p. 124)
• Materiality (p. 127)
• 11 Audit evidence and using the work of an expert (p. 134)
• Introduction (p. 134)
• Financial statements and assertions (p. 135)
• Sources of evidence (p. 136)
• Basic techniques for collecting evidence (p. 137)
• Using the work of an expert (p. 139)
• 12 Audit testing, sampling and analytical procedures (p. 145)
• Introduction (p. 145)
• Forms of audit testing (p. 145)
• Audit sampling (p. 147)
• Analytical procedures (p. 155)
• 13 Systems-based auditing (p. 164)
• Introduction (p. 164)
• Testing system components (p. 165)
• The purchases and expenses system (p. 167)
• The sales system (p. 171)
• Cash sales (p. 175)
• The payroll system (p. 176)
• 14 Business risk approach to auditing (p. 184)
• Introduction (p. 184)
• External risks (p. 184)
• Internal risks (p. 187)
• The client's approach to risk (p. 188)
• Actions to mitigate risk (p. 190)
• Why use a business risk approach to auditing? (p. 191)
• Understanding the business risk approach (p. 192)
• The implications of the business risk approach for the audit (p. 193)
• 15 The audit of assets (p. 199)
• Introduction (p. 199)
• Aspects to be verified (p. 200)
• Verification of non-current assets (p. 201)
• Current assets (p. 205)
• Stock and work in progress (p. 206)
• Cut-off (p. 213)
• Debtors (p. 215)
• Bank balances (p. 219)
• Loans (p. 221)
• Cash (p. 222)
• 16 The audit of liabilities (p. 228)
• Introduction (p. 228)
• Verification procedures (p. 228)
• Trade creditors (p. 229)
• Accruals (p. 229)
• Provisions (p. 230)
• Bank overdrafts and short-term loans (p. 230)
• Amounts due to group and related companies (p. 231)
• Long-term liabilities (p. 231)
• Share capital and reserves (p. 231)
• Inclusion of all liabilities (p. 232)
• Contingent liabilities (p. 233)
• Accounting estimates (p. 235)
• 17 Auditing and computers (p. 240)
• Introduction (p. 240)
• Audit risk and the CIS (p. 241)
• The control environment (p. 241)
• The audit approach to computerised systems (p. 242)
• 18 Audit working papers (p. 247)
• Introduction (p. 247)
• Purposes (p. 248)
• Evidence of work carried out (p. 248)
• Nature and content of working papers (p. 249)
• Departure from basic principles (p. 250)
• Content of working papers (p. 250)
• Sample working papers (p. 250)
• Standardisation of working papers (p. 256)
• Finalisation (p. 256)
• Ownership of books and papers (p. 256)
• Accountant's lien (p. 257)
• Retention of working papers (p. 257)
• 19 Internal audit (p. 262)
• Introduction (p. 262)
• Role of internal audit (p. 262)
• Differences between internal and external audit (p. 263)
• Public sector (p. 264)
• External auditors and internal audit (p. 264)
• Outsourcing internal audit services (p. 265)
• 20 Errors, frauds and unlawful acts (p. 270)
• Introduction (p. 270)
• Errors (p. 270)
• Fraud and other irregularities (p. 271)
• The audit approach (p. 274)
• Audit tests and fraud (p. 275)
• Unlawful acts of clients and their staff (p. 278)
• Audit issues arising from non-compliance (p. 280)
• 21 Related parties (p. 288)
• Introduction (p. 288)
• Disclosure (p. 288)
• The auditor's duties re related parties (p. 289)
• Audit procedures (p. 290)
• Control of the entity (p. 291)
• Qualified audit reports (p. 291)
• 22 Service organisations (p. 294)
• Introduction (p. 294)
• Why do firms outsource? (p. 294)
• Audit planning issues (p. 295)
• Accounting records (p. 297)
• Audit evidence (p. 297)
• Reports by service organisation's auditors (p. 298)
• 23 Evaluation and review (p. 301)
• Opening balances and comparatives (p. 301)
• The auditors' interest (p. 302)
• Subsequent events review (p. 303)
• Adjusting and non-adjusting events (p. 304)
• 24 Going concern (p. 312)
• Introduction (p. 312)
• Indicators of problems (p. 312)
• Consequences of going concern (p. 313)
• Directors' duties (p. 314)
• The auditors' procedures (p. 314)
• If events are identified (p. 315)
• Effect on audit reports (p. 316)
• 25 Management representations (p. 320)
• Introduction (p. 320)
• Contents of a letter (p. 320)
• Reliance on letter of representation (p. 321)
• Example of a management representation letter (p. 321)
• Refusal to co-operate (p. 323)
• 26 The final review stage of the audit (p. 327)
• Introduction (p. 327)
• Final accounts (p. 327)
• Procedures (p. 328)
• 27 Auditors' reports to shareholders (p. 333)
• Introduction (p. 333)
• Contents of an auditors' report (p. 333)
• When is an unqualified report appropriate? (p. 336)
• Qualified audit reports (p. 336)
• Effect of a qualified audit report (p. 337)
• Issuing modified audit reports (p. 337)
• Wording modified auditors' reports (p. 339)
• 'Except for' qualifications (p. 340)
• Listed companies - special provisions (p. 344)
• Emphasis of matter (p. 345)
• Audit reporting - special circumstances (p. 346)
• Auditors' liability in respect of audit reports (p. 346)
• Third parties - disclaimers of liability (p. 347)
• 28 Auditors' reports to directors and management (p. 351)
• Introduction (p. 351)
• Those charged with governance (p. 351)
• Formal and informal communication (p. 351)
• The management letter (p. 352)
• Response by management (p. 355)
• The report and third parties (p. 356)
• Example of a management letter (p. 356)
• 29 Group accounts (p. 362)
• Introduction (p. 362)
• Audit considerations (p. 363)
• Reliance on other auditors (p. 364)
• Auditing investments in subsidiaries and other undertakings (p. 365)
• Auditing the consolidation (p. 365)
• Modified auditors' reports (p. 366)
• Foreign subsidiaries (p. 366)
• Joint audits (p. 367)
• Support letters to subsidiaries (p. 368)
• 30 Small company audits (p. 372)
• Introduction (p. 372)
• Small company audit exemption (p. 372)
• Advantages and disadvantages of an audit (p. 373)
• Ethical standards (p. 373)
• The audit of small businesses (p. 374)
• Specific audit considerations (p. 376)
• 31 Auditors' liability (p. 380)
• Introduction (p. 380)
• Criminal law (p. 381)
• Civil liability under the common law (p. 383)
• Liability under contract law (p. 384)
• Liability in tort (p. 385)
• Minimising risk to audit firms (p. 389)
• Limited liability partnerships (LLPs) (p. 389)
• Limiting auditors' liability (p. 390)
• The future (p. 391)
• 32 Non-audit assurance services (p. 394)
• Review engagements (p. 394)
• Negative assurance (p. 400)
• Prospective financial information (p. 405)
• Assurance engagements (p. 411)
• Levels of assurance (p. 416)
• 33 Value for money, performance evaluation, environmental reporting and corporate social responsibility reporting assignments (p. 423)
• Introduction (p. 423)
• Value for money (p. 423)
• Economy, efficiency and effectiveness (p. 424)
• Performance evaluation (p. 426)
• Environmental reporting (p. 427)
• Environmental reporting assignment (p. 429)
• Corporate social responsibility (p. 433)
• 34 Current issues (p. 438)
• Introduction (p. 438)
• Auditing issues (p. 438)
• Audit challenges (p. 439)
• Independence (p. 440)
• Ethics and quality issues (p. 440)
• Corporate governance (p. 441)
• New opportunities, new problems (p. 441)
• Appendix 1 (p. 445)
• Appendix 2 (p. 447)
• Index (p. 449)

Author notes provided by Syndetics