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Auditing & Assurance Services: A Systematic Approach 10th edition [Kietas viršelis]

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  • Formatas: Hardback, 816 pages, aukštis x plotis x storis: 285x216x34 mm, weight: 1762 g
  • Išleidimo metai: 16-Feb-2016
  • Leidėjas: McGraw-Hill Inc.,US
  • ISBN-10: 0077732502
  • ISBN-13: 9780077732509
Kitos knygos pagal šią temą:
Auditing & Assurance Services: A Systematic Approach 10th editionDidesnis paveikslėlis
  • Formatas: Hardback, 816 pages, aukštis x plotis x storis: 285x216x34 mm, weight: 1762 g
  • Išleidimo metai: 16-Feb-2016
  • Leidėjas: McGraw-Hill Inc.,US
  • ISBN-10: 0077732502
  • ISBN-13: 9780077732509
Kitos knygos pagal šią temą:
Pastovi nuoroda: https://www.kriso.lt/db/9780077732509.html
Raktažodžiai:
The fundamental values central to the Messier Jr./Glover/Prawitt text include: student engagement, a systematic approach, and decision making.Student Engagement: The authors believe students are best served by acquiring a strong understanding of the basic concepts that underlie the audit process and how to apply those concepts to various audit and assurance services. The text is accessible to students through straightforward writing and the use of engaging, relevant real-world examples, illustrations, and analogies. The text explicitly encourages students to “stop and think” at important points in the text to help them apply principles covered and also helps students see the application of concepts in a practical setting through “practice insight” boxes.

A Systematic Approach: The authors first introduce the three underlying concepts of audit risk, materiality, and evidence, then follow with a discussion of audit planning, the assessment of control risk, and a discussion of the nature, timing, and extent of evidence necessary to reach the appropriate level of detection risk. These concepts are then applied to each major business process and related account balances using a risk-based approach, (in following with the new standards adopted by the various auditing boards).

Decision Making: Since much of auditing practice involves the application of auditor judgment, the authors focus on critical judgments and decision-making processes. If a student understands these basic concepts and how to apply them to an audit engagement, he or she will be more effective in today's dynamic audit environment. The new edition even includes a full advanced module on Professional Judgment.
Part 1 Introduction to Assurance and Financial Statement Auditing 1(66)
Chapter 1 An Introduction to Assurance and Financial Statement Auditing
2(34)
Tips for Learning Auditing
4(1)
The Demand for Auditing and Assurance
5(3)
Principals and Agents
5(1)
The Role of Auditing
6(2)
An Assurance Analogy: The Case of the House Inspector
8(4)
Seller Assertions, Information Asymmetry, and Inspector Characteristics
8(1)
Desired Characteristics of the House Inspection Service
8(1)
Relating the House Inspection Analogy to Financial Statement Auditing
9(1)
Management Assertions and Financial Statements
10(2)
Auditing, Attest, and Assurance Services Defined
12(2)
Auditing
12(1)
Attestation
13(1)
Assurance
13(1)
Fundamental Concepts in Conducting a Financial Statement Audit
14(2)
Materiality
14(1)
Audit Risk
15(1)
Audit Evidence Regarding Management Assertions
16(1)
Sampling: Inferences Based on Limited Observations
16(1)
The Audit Process
17(6)
Overview of the Financial Statement Auditing Process
17(1)
Major Phases of the Audit
18(3)
The Unqualified/Unmodified Audit Report
21(1)
Other Types of Audit Reports
22(1)
Conclusion
23(1)
Key Terms
24(1)
Review Questions
25(1)
Multiple-Choice Questions
25(2)
Problems
27(1)
Discussion Case
28(1)
Internet Assignment
29(1)
Hands-On Cases
29(7)
Chapter 2 The Financial Statement Auditing Environment
36(31)
Types of Auditors
38(2)
External Auditors
38(1)
Internal Auditors
38(1)
Government Auditors
39(1)
Forensic Auditors
40(1)
Types of Other Audit, Attest, and Assurance Services
40(2)
Other Audit Services
40(1)
Attest Services
41(1)
Assurance Services
41(1)
Other Nonaudit Services
42(1)
Public Accounting Firms
42(2)
Organization and Composition
42(2)
A Decade of Challenge and Change for Financial Statement Auditors
44(1)
Government Regulation
44(1)
Society's Expectations and the Auditor's Responsibilities
45(1)
The Context of Financial Statement Auditing
45(1)
The Business Entity as the Primary Context of Auditing
45(1)
A Model of Business
46(3)
Corporate Governance
46(2)
Objectives, Strategies, Processes, Controls, Transactions, and Reports
48(1)
A Model of Business Processes: Five Components
48(1)
Organizations That Affect the Public Accounting Profession
49(3)
Securities and Exchange Commission (SEC)
51(1)
Public Company Accounting Oversight Board (PCAOB)
51(1)
American Institute of Certified Public Accountants (AICPA)
51(1)
International Auditing and Assurance Standards Board (IAASB)
52(1)
Financial Accounting Standards Board (FASB)
52(1)
International Accounting Standards Board (IASB)
52(1)
Auditing Standards
52(5)
Three Sets of Auditing Standards: The Roles of the ASB, PCAOB, and IAASB
53(1)
The 10 Generally Accepted Auditing Standards
53(2)
Principles Underlying an Audit Conducted in Accordance with Generally Accepted Auditing Standards
55(1)
Statements on Auditing Standards and the AU Codification
55(2)
Ethics, Independence, and the Code of Professional Conduct
57(1)
Conclusion
58(1)
Key Terms
58(1)
Review Questions
59(1)
Multiple-Choice Questions
60(2)
Problems
62(2)
Discussion Cases
64(1)
Internet Assignments
65(1)
Hands-On Cases
66(1)
Part 2 Audit Planning and Basic Auditing Concepts 67(110)
Chapter 3 Audit Planning, Types of Audit Tests, and Materiality
68(30)
Client Acceptance and Continuance
70(1)
Prospective Client Acceptance
70(1)
Client Continuance
71(1)
Preliminary Engagement Activities
71(7)
Determine the Audit Engagement Team Requirements
71(1)
Assess Compliance with Ethical and Independence Requirements
72(1)
Establish an Understanding with the Entity
72(6)
Planning the Audit
78(5)
Audit Strategy and Plan
78(1)
Assess Business Risks
78(1)
Establish Materiality
78(1)
Consider Multilocations or Business Units
79(1)
Assess the Need for Specialists
79(1)
Consider Violations of Laws and Regulations
79(1)
Identify Related Parties
80(1)
Consider Additional Value-Added Services
81(1)
Document the Overall Audit Strategy, Audit Plan, and Prepare Audit Programs
81(2)
Supervision of the Audit
83(1)
Types of Audit Tests
83(2)
Risk Assessment Procedures
83(1)
Tests of Controls
83(1)
Substantive Procedures
84(1)
Dual-Purpose Tests
84(1)
Materiality
85(5)
Steps in Applying Materiality
86(2)
An Example
88(2)
Key Terms
90(1)
Review Questions
90(1)
Multiple-Choice Questions
91(1)
Problems
92(3)
Discussion Case
95(1)
Internet Assignments
95(1)
Hands-On Cases
96(2)
Chapter 4 Risk Assessment
98(30)
Audit Risk
100(4)
The Audit Risk Model
100(2)
Use of the Audit Risk Model
102(2)
The Auditor's Risk Assessment Process
104(5)
Management's Strategies, Objectives, and Business Risks
104(1)
Auditor's Risk Assessment Procedures
105(1)
Assessing Business Risks
106(3)
Evaluate the Entity's Risk Assessment Process
109(1)
Assessing the Risk of Material Misstatement
109(6)
Causes and Types of Misstatements
110(1)
The Fraud Risk Assessment Process
111(4)
The Auditor's Response to the Results of the Risk Assessments
115(2)
Evaluation of Audit Test Results
117(1)
Documentation of the Auditor's Risk Assessment and Response
118(1)
Communications about Fraud to Management, the Audit Committee, and Others
118(2)
Key Terms
120(1)
Review Questions
121(1)
Multiple-Choice Questions
121(2)
Problems
123(2)
Discussion Case
125(1)
Internet Assignment
126(1)
Hands-On Cases
127(1)
Chapter 5 Evidence and Documentation
128(49)
The Relationship of Audit Evidence to the Audit Report
130(1)
Management Assertions
131(4)
Assertions about Classes of Transactions and Events during the Period
131(2)
Assertions about Account Balances at the Period End
133(1)
Assertions about Presentation and Disclosure
134(1)
The Concepts of Audit Evidence
135(3)
The Nature of Audit Evidence
135(1)
The Sufficiency and Appropriateness of Audit Evidence
135(2)
The Evaluation of Audit Evidence
137(1)
Audit Procedures for Obtaining Audit Evidence
138(4)
Inspection of Records or Documents
138(1)
Inspection of Tangible Assets
139(1)
Observation
140(1)
Inquiry
140(1)
Confirmation
141(1)
Recalculation
141(1)
Reperformance
142(1)
Analytical Procedures
142(1)
Scanning
142(1)
Reliability of the Types of Evidence
142(1)
The Audit Testing Hierarchy
143(3)
An "Assurance Bucket" Analogy
145(1)
Audit Documentation
146(19)
Functions of Audit Documentation
146(1)
Content of Audit Documentation
147(1)
Examples of Audit Documentation
148(2)
Format of Audit Documentation
150(1)
Organization of Audit Documentation
151(1)
Ownership of Audit Documentation
151(1)
Audit Document Archiving and Retention
151(3)
Substantive Analytical Procedures
154(8)
Final Analytical Procedures
162(1)
Short-Term Liquidity Ratios
163(1)
Activity Ratios
163(1)
Profitability Ratios
164(1)
Coverage Ratios
165(1)
Key Terms
165(1)
Review Questions
166(1)
Multiple-Choice Questions
167(2)
Problems
169(3)
Discussion Cases
172(2)
Internet Assignment
174(1)
Hands-On Cases
174(3)
Part 3 Understanding and Auditing Internal Control 177(84)
Chapter 6 Internal Control in a Financial Statement Audit
178(42)
Introduction
180(1)
Internal Control—an Overview
180(1)
Definition of Internal Control
180(1)
Controls Relevant to the Audit
180(1)
The Effect of Information Technology on Internal Control
181(1)
The COSO Framework
181(8)
Components of Internal Control
181(1)
Control Environment
182(3)
The Entity's Risk Assessment Process
185(1)
Control Activities
186(2)
Information and Communication
188(1)
Monitoring of Controls
189(1)
Planning an Audit Strategy
189(4)
Substantive Strategy
191(1)
Reliance Strategy
192(1)
Obtain an Understanding of Internal Control
193(6)
Overview
193(1)
Understanding the Control Environment
193(1)
Understanding the Entity's Risk Assessment Process
194(1)
Understanding the Information System and Communications
195(1)
Understanding Control Activities
195(1)
Understanding Monitoring of Controls
195(1)
Documenting the Understanding of Internal Control
196(1)
The Effect of Entity Size on Internal Control
196(1)
The Limitations of an Entity's Internal Control
197(2)
Assessing Control Risk
199(2)
Identifying Specific Controls That Will Be Relied Upon
199(1)
Performing Tests of Controls
199(1)
Concluding on the Achieved Level of Control Risk
200(1)
Documenting the Achieved Level of Control Risk
200(1)
An Example
200(1)
Substantive Procedures
201(1)
Timing of Audit Procedures
202(1)
Interim Tests of Controls
202(1)
Interim Substantive Procedures
203(1)
Auditing Accounting Applications Processed by Service Organizations
203(1)
Communication of Internal Control—Related Matters
204(7)
General Controls
206(1)
Application Controls
207(2)
Symbols
209(1)
Organization and Flow
210(1)
Key Terms
211(1)
Review Questions
211(1)
Multiple-Choice Questions
212(2)
Problems
214(2)
Discussion Cases
216(2)
Hands-On Cases
218(2)
Chapter 7 Auditing Internal Control over Financial Reporting
220(41)
Management Responsibilities under Section 404
222(1)
Auditor Responsibilities under Section 404 and AS5
222(1)
Internal Control over Financial Reporting Defined
222(1)
Internal Control Deficiencies Defined
223(2)
Control Deficiency
223(1)
Material Weakness
223(1)
Significant Deficiency
223(1)
Likelihood and Magnitude
223(2)
Management's Assessment Process
225(3)
Identify Financial Reporting Risks and Related Controls
225(1)
Consider Which Locations to Include in the Evaluation
226(1)
Evaluate Evidence about the Operating Effectiveness of ICFR
226(1)
Reporting Considerations
226(1)
Management's Documentation
227(1)
Performing an Audit of ICFR
228(1)
Plan the Audit of ICFR
229(2)
The Role of Risk Assessment and the Risk of Fraud
229(1)
Scaling the Audit
230(1)
Using the Work of Others
230(1)
Identify Controls to Test
231(3)
Identify Entity-Level Controls
231(1)
Identifying Significant Accounts and Disclosures and Their Relevant Assertions
232(1)
Understanding Likely Sources of Misstatements
232(1)
Select Controls to Test
233(1)
Evaluate the Design and Test the Operating Effectiveness of Controls
234(2)
Evaluating Design Effectiveness of Controls
234(1)
Testing and Evaluating Operating Effectiveness of Controls
234(2)
Evaluating Identified Control Deficiencies
236(3)
Examples of Control Deficiency Evaluation
237(2)
Remediation of a Material Weakness
239(1)
Written Representations
239(1)
Auditor Documentation Requirements
240(1)
Auditor Reporting on ICFR
240(4)
Elements of the Auditor's Report
241(1)
Unqualified Report
241(1)
Adverse Report for a Material Weakness
241(1)
Disclaimer for Scope Limitation
242(2)
Other Reporting Issues
244(1)
Management's Report Incomplete or Improperly Presented
244(1)
The Auditor Decides to Refer to the Report of Other Auditors
244(1)
Subsequent Events
245(1)
Management's Report Contains Additional Information
245(1)
Reporting on a Remediated Material Weakness at an Interim Date
245(1)
Additional Required Communications in an Audit of ICFR
245(4)
Use of Service Organizations
246(1)
Safeguarding of Assets
247(1)
Generalized Audit Software
247(1)
Custom Audit Software
248(1)
Test Data
249(1)
Key Terms
249(1)
Review Questions
250(1)
Multiple-Choice Questions
251(2)
Problems
253(6)
Internet Assignments
259(1)
Hands-On Cases
259(2)
Part 4 Statistical and Nonstatistical Sampling Tools for Auditing 261(76)
Chapter 8 Audit Sampling: An Overview and Application to Tests of Controls
262(38)
Overview of Audit Sampling
264(1)
Definitions and Key Concepts
265(4)
Audit Sampling
265(1)
Sampling Risk
265(2)
Confidence Level
267(1)
Tolerable and Expected Error
267(1)
Audit Evidence Choices That Do and Do Not Involve Sampling
268(1)
Types of Audit Sampling
269(2)
Nonstatistical versus Statistical Sampling
269(1)
Types of Statistical Sampling Techniques
270(1)
Attribute Sampling Applied to Tests of Controls
271(16)
Planning
271(8)
Performance
279(4)
Evaluation
283(4)
Nonstatistical Sampling for Tests of Controls
287(2)
Determining the Sample Size
287(1)
Selecting the Sample Items
288(1)
Calculating the Computed Upper Deviation Rate
288(1)
Conclusion
289(1)
Key Terms
290(1)
Review Questions
291(1)
Multiple-Choice Questions
292(2)
Problems
294(3)
Discussion Case
297(1)
Hands-On Cases
298(2)
Chapter 9 Audit Sampling: An Application to Substantive Tests of Account Balances
300(37)
Sampling for Substantive Tests of Details of Account Balances
302(1)
Monetary-Unit Sampling
303(15)
Advantages
304(1)
Disadvantages
304(1)
Applying Monetary-Unit Sampling
304(1)
Planning
304(4)
Performance
308(2)
Evaluation
310(8)
Nonstatistical Sampling for Tests of Account Balances
318(10)
Identifying Individually Significant Items
318(1)
Determining the Sample Size
318(1)
Selecting Sample Items
319(1)
Calculating the Sample Results
319(1)
An Example of Nonstatistical Sampling
320(4)
Advantages
324(1)
Disadvantages
324(1)
Applying Classical Variables Sampling
324(4)
Key Terms
328(1)
Review Questions
329(1)
Multiple-Choice Questions
330(1)
Problems
331(4)
Discussion Cases
335(1)
Hands-On Cases
336(1)
Part 5 Auditing Business Processes 337(224)
Chapter 10 Auditing the Revenue Process
338(48)
Revenue Recognition
341(1)
Overview of the Revenue Process
342(9)
Types of Transactions and Financial Statement Accounts Affected
343(2)
Types of Documents and Records
345(4)
The Major Functions
349(1)
Key Segregation of Duties
350(1)
Inherent Risk Assessment
351(2)
Industry-Related Factors
351(1)
The Complexity and Contentiousness of Revenue Recognition Issues
352(1)
The Difficulty of Auditing Transactions and Account Balances
352(1)
Misstatements Detected in Prior Audits
352(1)
Control Risk Assessment
353(2)
Understand and Document Internal Control
353(1)
Plan and Perform Tests of Controls
354(1)
Set and Document Control Risk
354(1)
Control Activities and Tests of Controls—Revenue Transactions
355(3)
Occurrence of Revenue Transactions
355(2)
Completeness of Revenue Transactions
357(1)
Authorization of Revenue Transactions
357(1)
Accuracy of Revenue Transactions
357(1)
Cutoff of Revenue Transactions
358(1)
Classification of Revenue Transactions
358(1)
Control Activities and Tests of Controls—Cash Receipts Transactions
358(3)
Occurrence of Cash Receipts Transactions
358(1)
Completeness of Cash Receipts Transactions
359(1)
Authorization of Cash Discounts
360(1)
Accuracy of Cash Receipts Transactions
361(1)
Cutoff of Cash Receipts Transactions
361(1)
Classification of Cash Receipts
361(1)
Control Activities and Tests of Controls—Sales Returns and Allowances Transactions
361(1)
Relating the Assessed Level of Control Risk to Substantive Procedures
362(1)
Auditing Revenue-Related Accounts
362(1)
Substantive Analytical Procedures
363(1)
Tests of Details of Classes of Transactions, Account Balances, and Disclosures
364(6)
Completeness
364(2)
Cutoff
366(1)
Existence
367(1)
Rights and Obligations
367(1)
Valuation and Allocation
368(1)
Classification
369(1)
Other Presentation and Disclosure Assertions
369(1)
The Confirmation Process—Accounts Receivable
370(4)
Types of Confirmations
371(1)
Timing
372(1)
Confirmation Procedures
373(1)
Alternative Procedures
374(1)
Auditing Other Receivables
374(1)
Evaluating the Audit Findings—Revenue-Related Accounts
375(1)
Key Terms
375(1)
Review Questions
376(1)
Multiple-Choice Questions
377(2)
Problems
379(3)
Discussion Cases
382(1)
Internet Assignments
383(1)
Hands-On Cases
383(3)
Chapter 11 Auditing the Purchasing Process
386(36)
Expense and Liability Recognition
388(1)
Overview of the Purchasing Process
388(8)
Types of Transactions and Financial Statement Accounts Affected
389(1)
Types of Documents and Records
390(3)
The Major Functions
393(2)
The Key Segregation of Duties
395(1)
Inherent Risk Assessment
396(1)
Industry-Related Factors
396(1)
Misstatements Detected in Prior Audits
396(1)
Control Risk Assessment
396(2)
Understand and Document Internal Control
396(2)
Plan and Perform Tests of Controls
398(1)
Set and Document Control Risk
398(1)
Control Activities and Tests of Controls—Purchase Transactions
398(4)
Occurrence of Purchase Transactions
399(1)
Completeness of Purchase Transactions
399(1)
Authorization of Purchase Transactions
400(1)
Accuracy of Purchase Transactions
401(1)
Cutoff of Purchase Transactions
401(1)
Classification of Purchase Transactions
401(1)
Control Activities and Tests of Controls—Cash Disbursement Transactions
402(2)
Occurrence of Cash Disbursement Transactions
402(1)
Completeness of Cash Disbursement Transactions
402(1)
Authorization of Cash Disbursement Transactions
402(1)
Accuracy of Cash Disbursement Transactions
402(1)
Cutoff of Cash Disbursement Transactions
403(1)
Classification of Cash Disbursement Transactions
404(1)
Control Activities and Tests of Controls—Purchase Return Transactions
404(1)
Relating the Assessed Level of Control Risk to Substantive Procedures
404(1)
Auditing Accounts Payable and Accrued Expenses
405(1)
Substantive Analytical Procedures
405(1)
Tests of Details of Classes of Transactions, Account Balances, and Disclosures
406(5)
Completeness
406(3)
Existence
409(1)
Cutoff
409(1)
Rights and Obligations
409(1)
Valuation
409(1)
Classification and Understandability
410(1)
Other Presentation Disclosure Assertions
410(1)
Accounts Payable Confirmations
411(1)
Evaluating the Audit Findings—Accounts Payable and Related
412(2)
Key Terms
414(1)
Review Questions
415(1)
Multiple-Choice Questions
416(1)
Problems
417(4)
Discussion Case
421(1)
Internet Assignments
421(1)
Hands-On Cases
421(1)
Chapter 12 Auditing the Human Resource Management Process
422(28)
Overview of the Human Resource Management Process
424(5)
Types of Transactions and Financial Statement Accounts Affected
425(1)
Types of Documents and Records
425(1)
The Major Functions
426(2)
The Key Segregation of Duties
428(1)
Inherent Risk Assessment
429(1)
Control Risk Assessment
430(1)
Understand and Document Internal Control
430(1)
Plan and Perform Tests of Controls
431(1)
Set and Document the Control Risk
431(1)
Control Activities and Tests of Controls—Payroll Transactions
431(3)
Occurrence of Payroll Transactions
433(1)
Authorization of Payroll Transactions
433(1)
Accuracy of Payroll Transactions
433(1)
Classification of Payroll Transactions
434(1)
Relating the Assessed Level of Control Risk to Substantive Procedures
434(1)
Auditing Payroll-Related Accounts
434(1)
Substantive Analytical Procedures
434(1)
Tests of Details of Classes of Transactions, Account Balances, and Disclosures
435(4)
Payroll Expense Accounts
436(1)
Accrued Payroll Liabilities
437(2)
Evaluating the Audit Findings-Payroll-Related Accounts
439(2)
Key Terms
441(1)
Review Questions
442(1)
Multiple-Choice Questions
442(2)
Problems
444(2)
Discussion Cases
446(2)
Internet Assignment
448(1)
Hands-On Cases
448(2)
Chapter 13 Auditing the Inventory Management Process
450(30)
Overview of the Inventory Management Process
452(4)
Types of Documents and Records
453(2)
The Major Functions
455(1)
The Key Segregation of Duties
456(1)
Inherent Risk Assessment
456(1)
Industry-Related Factors
457(1)
Engagement and Operating Characteristics
457(1)
Control Risk Assessment
457(2)
Understand and Document Internal Control
459(1)
Plan and Perform Tests of Controls
459(1)
Set and Document the Control Risk
459(1)
Control Activities and Tests of Controls—Inventory Transactions
459(3)
Occurrence of Inventory Transactions
460(1)
Completeness of Inventory Transactions
461(1)
Authorization of Inventory Transactions
461(1)
Accuracy of Inventory Transactions
461(1)
Cutoff of Inventory Transactions
462(1)
Classification of Inventory Transactions
462(1)
Relating the Assessed Level of Control Risk to Substantive Procedures
462(1)
Auditing Inventory
463(1)
Substantive Analytical Procedures
464(1)
Auditing Standard Costs
465(1)
Materials
465(1)
Labor
465(1)
Overhead
465(1)
Observing Physical Inventory
466(1)
Tests of Details of Classes of Transactions, Account Balances, and Disclosures
467(4)
Accuracy
468(1)
Cutoff
469(1)
Existence
469(1)
Completeness
469(1)
Rights and Obligations
469(1)
Valuation and Allocation
469(1)
Classification and Understandability
470(1)
Other Presentation and Disclosure Assertions
470(1)
Evaluating the Audit Findings—Inventory
471(1)
Key Terms
471(1)
Review Questions
472(1)
Multiple-Choice Questions
472(2)
Problems
474(4)
Discussion Case
478(1)
Internet Assignment
479(1)
Hands-On Cases
479(1)
Chapter 14 Auditing the Financing/Investing Process: Prepaid Expenses, Intangible Assets, and Property, Plant, and Equipment
480(26)
Auditing Prepaid Expenses
482(1)
Inherent Risk Assessment—Prepaid Expenses
482(1)
Control Risk Assessment—Prepaid Expenses
482(1)
Substantive Procedures—Prepaid Insurance
483(1)
Substantive Analytical Procedures for Prepaid Insurance
483(1)
Tests of Details of the Prepaid Insurance
484(1)
Existence and Completeness
484(1)
Rights and Obligations
484(1)
Valuation
484(1)
Classification
484(1)
Auditing Intangible Assets
484(1)
Inherent Risk Assessment—Intangible Assets
485(1)
Control Risk Assessment—Intangible Assets
486(1)
Substantive Procedures—Intangible Assets
486(2)
Substantive Analytical Procedures for Intangible Assets
486(1)
Tests of Details of Intangible Assets
487(1)
Auditing the Property Management Process
488(2)
Types of Transactions
488(1)
Overview of the Property Management Process
489(1)
Inherent Risk Assessment—Property Management Process
490(1)
Complex Accounting Issues
490(1)
Difficult-to-Audit Transactions
490(1)
Misstatements Detected in Prior Audits
490(1)
Control Risk Assessment—Property Management Process
491(2)
Occurrence and Authorization
491(1)
Completeness
492(1)
Segregation of Duties
492(1)
Substantive Procedures—Property, Plant, and Equipment
493(4)
Substantive Analytical Procedures—Property, Plant, and Equipment
493(1)
Tests of Details of Transactions, Account Balances, and Disclosures—Property, Plant, and Equipment
494(3)
Evaluating the Audit Findings—Property, Plant, and Equipment
497(1)
Key Terms
498(1)
Review Questions
498(1)
Multiple-Choice Questions
499(2)
Problems
501(2)
Discussion Case
503(1)
Internet Assignments
503(1)
Hands-On Cases
504(2)
Chapter 15 Auditing the Financing/Investing Process: Long-Term Liabilities, Stockholders' Equity, and Income Statement Accounts
506(22)
Auditing Long-Term Debt
508(1)
Inherent Risk Assessment—Long-Term Debt
509(1)
Control Risk Assessment—Long-Term Debt
509(2)
Assertions and Related Control Activities
509(2)
EarthWear Substantive Procedures—Long-Term Debt
511(1)
Auditing Stockholders' Equity
512(2)
Control Risk Assessment—Stockholders' Equity
514(1)
Assertions and Related Control Activities
514(1)
Segregation of Duties
515(1)
Auditing Capital-Stock Accounts
515(1)
Occurrence and Completeness
515(1)
Valuation
516(1)
Completeness of Disclosures
516(1)
Auditing Dividends
516(1)
Auditing Retained Earnings
517(1)
Auditing Income Statement Accounts
517(1)
Assessing Control Risk for Business Processes—Income Statement Accounts
518(1)
Substantive Procedures—Income Statement Accounts
518(2)
Direct Tests of Balance Sheet Accounts
518(1)
Substantive Analytical Procedures for Income Statement Accounts
518(1)
Tests of Selected Account Balances
519(1)
Key Terms
520(1)
Review Questions
521(1)
Multiple-Choice Questions
521(2)
Problems
523(2)
Discussion Case
525(1)
Internet Assignment
526(1)
Hands-On Cases
526(2)
Chapter 16 Auditing the Financing/Investing Process: Cash and Investments
528(33)
Auditing Cash
530(1)
Types of Bank Accounts
531(1)
General Cash Account
531(1)
Imprest Cash Accounts
531(1)
Branch Accounts
531(1)
Control Risk Assessment—Cash
532(1)
Substantive Procedures—Cash
532(11)
Substantive Analytical Procedures—Cash
532(1)
Substantive Tests of Details of Transactions and Balances—Cash
532(1)
Auditing the General Cash Account
533(5)
Fraud-Related Audit Procedures
538(3)
Auditing a Payroll or Branch Imprest Account
541(1)
Auditing a Petty Cash Fund
541(1)
Disclosure Issues for Cash
542(1)
Auditing Investments
543(1)
Control Risk Assessment—Investments
543(2)
Assertions and Related Control Activities
544(1)
Segregation of Duties
545(1)
Substantive Procedures—Investments
545(6)
Substantive Analytical Procedures—Investments
545(1)
Tests of Details—Investments
546(4)
Understanding How Management Makes Fair Value Measurements
550(1)
Considering Whether Specialized Skills or Knowledge Is Required
550(1)
Testing the Entity's Fair Value Measurements
550(1)
Evaluating the Reasonableness of the Fair Value Measurements
551(1)
Key Terms
551(1)
Review Questions
552(1)
Multiple-Choice Questions
553(2)
Problems
555(4)
Internet Assignment
559(1)
Hands-On Case
559(2)
Part 6 Completing the Audit and Reporting Responsibilities 561(66)
Chapter 17 Completing the Audit Engagement
562(34)
Review for Contingent Liabilities
564(3)
Audit Procedures for Identifying Contingent Liabilities
565(1)
Legal Letters
565(2)
Commitments
567(1)
Review of Subsequent Events for Audit of Financial Statements
568(3)
Dual Dating
570(1)
Audit Procedures for Subsequent Events
571(1)
Review of Subsequent Events for the Audit of Internal Control over Financial Reporting
571(1)
Final Steps and Evidence Evaluation
572(10)
Final Analytical Procedures
572(1)
Representation Letter
573(1)
Working Paper Review
573(3)
Final Evaluation of Audit Results
576(2)
Evaluating Financial Statement Presentation and Disclosure
578(1)
Independent Engagement Quality Review
579(1)
Archiving and Retention
579(1)
Going Concern Considerations
579(3)
Communications with Those Charged with Governance and Management
582(2)
Communications Regarding the Audit of Internal Control over Financial Reporting
583(1)
Management Letter
584(1)
Subsequent Discovery of Facts Existing at the Date of the Auditor's Report
584(1)
Key Terms
585(1)
Review Questions
586(1)
Multiple-Choice Questions
586(2)
Problems
588(4)
Discussion Cases
592(3)
Internet Assignments
595(1)
Hands-On Cases
595(1)
Chapter 18 Reports on Audited Financial Statements
596(31)
Reporting on the Financial Statement Audit: The Standard Unqualified/Unmodified Audit Report
598(2)
The Standard Unqualified Audit Report for Public Companies
598(1)
The Standard Unmodified Audit Report for All Entities Other Than Public Companies
599(1)
Explanatory Language Added to the Standard Unqualified/Unmodified Financial Statement Audit Report
600(4)
Modified Wording for Opinion Based in Part on the Report of Another Auditor
600(1)
Circumstances Requiring Explanatory Language in an Additional Paragraph
601(3)
Departures from an Unqualified/Unmodified Financial Statement Audit Report
604(3)
Conditions for Departure
605(1)
Types of Financial Statement Audit Reports Other Than Unqualified/Unmodified
605(1)
The Effect of Materiality on Financial Statement Reporting
606(1)
Discussion of Conditions Requiring Other Types of Financial Statement Audit Reports
607(4)
Scope Limitation
607(2)
Statements Not in Conformity with GAAP
609(1)
Auditor Not Independent
610(1)
Special Reporting Issues
611(1)
Reports on Comparative Financial Statements
611(2)
Different Reports on Comparative Financial Statements
611(1)
A Change in Report on the Prior-Period Financial Statements
612(1)
Report by a Predecessor Auditor
613(1)
Other Information in Documents Containing Audited Financial Statements
613(1)
Special Reports Relating to Financial Statements
614(2)
Financial Statements Prepared According to a Special Purpose Framework
614(1)
Specified Elements, Accounts, or Items of a Financial Statement
615(1)
Compliance Reports Related to Audited Financial Statements
615(1)
Big Changes Coming to Audit Reporting
616(2)
Key Terms
618(1)
Review Questions
618(1)
Multiple-Choice Questions
619(2)
Problems
621(4)
Discussion Case
625(1)
Hands-On Cases
626(1)
Part 7 Professional Responsibilities 627(80)
Chapter 19 Professional Conduct, Independence, and Quality Control
628(44)
Ethics and Professional Conduct
630(4)
Ethics and Professionalism Defined
630(1)
Theories of Ethical Behavior
631(1)
Example—an Ethical Challenge
632(2)
An Overview of Ethics and Professionalism in Public Accounting
634(2)
A Tale of Two Companies
634(1)
Standards for Auditor Professionalism
635(1)
The Newly Revised AICPA Code of Professional Conduct: A Comprehensive Framework for Auditors
636(4)
Principles of Professional Conduct
638(1)
Rules of Conduct
639(1)
Integrity, Objectivity, and Independence
640(13)
Integrity and Objectivity—Framework, Rule, and Interpretations
640(1)
Independence
641(12)
Other Sections of the Code of Professional Conduct
653(5)
General Standards and Accounting Principles
653(1)
Responsibilities to Clients
654(1)
Other Responsibilities and Practices
655(2)
Disciplinary Actions
657(1)
Don't Lose Sight of the Forest for the Trees
657(1)
Quality Control Standards
658(3)
System of Quality Control
659(1)
Elements of Quality Control
659(2)
PCAOB Inspections of Registered Public Accounting Firms
661(1)
Key Terms
661(2)
Review Questions
663(1)
Multiple-Choice Questions
663(3)
Problems
666(2)
Discussion Cases
668(1)
Internet Assignment
669(1)
Hands-On Cases
670(2)
Chapter 20 Legal Liability
672(35)
Introduction
674(3)
Historical Perspective
674(1)
Overview of Auditor Legal Liability
675(2)
Common Law—Clients
677(3)
Breach of Contract—Client Claims
677(1)
Negligence—Client Claims
677(2)
Fraud—Client Claims
679(1)
Common Law—Third Parties
680(8)
Ordinary Negligence—Third-Party Claims
680(6)
Fraud and Gross Negligence—Third-Party Claims
686(1)
Damages under Common Law
687(1)
Statutory Law—Civil Liability
688(10)
Securities Act of 1933
688(1)
Securities Exchange Act of 1934
689(4)
Private Securities Litigation Reform Act of 1995, the Securities Litigation Uniform Standards Act of 1998, and the Class Action Fairness Act of 2005
693(2)
Sarbanes-Oxley Act of 2002
695(1)
SEC and PCAOB Sanctions
695(2)
Foreign Corrupt Practices Act
697(1)
Racketeer Influenced and Corrupt Organizations Act
697(1)
Statutory Law—Criminal Liability
698(1)
Key Terms
699(1)
Review Questions
700(1)
Multiple-Choice Questions
700(3)
Problems
703(3)
Discussion Cases
706(1)
Hands-On Cases
706(1)
Part 8 Assurance, Attestation, and Internal Auditing Services 707(41)
Chapter 21 Assurance, Attestation, and Internal Auditing Services
708(40)
Assurance Services
710(1)
Types of Assurance Services
711(1)
Attest Engagements
711(2)
Types of Attest Engagements
712(1)
Attestation Standards
713(2)
General Standards
713(2)
Standards of Fieldwork
715(1)
Standards of Reporting
715(1)
Reporting on an Entity's Internal Control over Financial Reporting (ICFR)
715(2)
Conditions for Conducting an Engagement Relating to ICFR
716(1)
Examination Engagement on an Entity's ICFR
716(1)
Reporting on Management's Assertion about Internal Control
716(1)
Financial Forecasts and Projections
717(5)
Types of Prospective Financial Statements
717(1)
Examination of Prospective Financial Statements
718(1)
Agreed-Upon Procedures for Prospective Financial Statements
719(1)
Compilation of Prospective Financial Statements
720(2)
Accounting and Review Services
722(4)
Compilation of Financial Statements
723(1)
Review of Financial Statements
724(2)
Internal Auditing
726(8)
Internal Auditing Defined
727(1)
The Institute of Internal Auditors
727(1)
IIA Standards
727(1)
Code of Ethics
728(1)
Internal Auditors' Roles
729(3)
Internal Audit Product Offerings
732(1)
Interactions between Internal and External Auditors
732(2)
Advanced Module: Examples of Assurance Services—Trust Services and PrimePlus Services
734(5)
Trust Services
734(1)
Trust Services and SOC 2 and SOC 3 Reports
735(1)
CPA WebTrust
735(3)
CPA PrimePlus Services
738(1)
Key Terms
739(1)
Review Questions
739(1)
Multiple-Choice Questions
740(2)
Problems
742(4)
Discussion Case
746(1)
Internet Assignments
746(1)
Hands-On Cases
747(1)
Advanced Module: Professonal Judgment Framework—Understanding and Developing Professional Judgment in Auditing 748(9)
Index 757
Professor William F. Messier, Jr., is the Deloitte & Touche Professor at the School of Accountancy, Georgia State University. He holds a Professor II position at the Institute for Accounting and Auditing, Norwegian School of Economics and Business Administration, and he is a visiting professor at SDA Bocconi in Milan, Italy. Professor Messier has a BBA from Siena College, an MS from Clarkson University, and an MBA and DBA from Indiana University. He is a CPA in Florida and has taught at the Universities of Florida and Michigan.Professor Messier has served as the Chairperson of the Auditing Section of the American Accounting Association and as co-editor of the Journal of Accounting Literature. He currently serves on the AICPAs International Auditing Standards Subcommittee. Professor Messier has authored or co-authored over 45 articles in accounting, decision science, and computer science journals.





Professor Steven M. Glover is the K. Fred Skousen Professor and Associate Dean of the Marriott School of Management, Brigham Young University. Professor Glover is a CPA in Utah and holds a PhD and BS from the University of Washington and an AA in Business from BYU Idaho. He previously worked as an auditor for KPMG LLP and as a director in the national office of PwC LLP. Professor Glover is currently serving on the AICPA Auditing Standards Board and has served on the audit committee of a nonprofit organization. He has served on the board of advisors for technology companies and he actively consults with public companies and public accounting firms. He has also served as an expert witness. Professor Glover is a past President of the Auditing Section of the American Accounting Association and he has been on auditing-related task forces of the AICPA. Professor Glover is or has served on the editorial boards of Auditing: A Journal of Practice & Theory, The Accounting Review, Current Issues in Auditing, and the review board of the AAA/CAQ Access to Audit Personnel Program. He has authored or coauthored over 40 articles and books primarily focused in the areas of auditor decision making, audit education, and audit practice. Together with Professor Prawitt and KPMG, LLP, he co-authored an award-winning monograph designed to accelerate the professional judgment of auditors and auditing students, as well as a monograph on professional skepticism commissioned by the Standards Working Group of the GPPC, an international consortium of the six largest public accounting network firms.





Professor Douglas F. Prawitt is the Glen Ardis Professor of Accountancy at the Marriott School of Management, Brigham Young University. Professor Prawitt is a CPA in Utah. He holds a PhD from the University of Arizona, and BS and MAcc degrees from Brigham Young University. Professor Prawitt was awarded the Marriott Schools Teaching Excellence and Outstanding Researcher awards in 1998 and 2000. He received the Merrill J. Bateman Student Choice Teaching Award in 2002, BYUs Wesley P. Lloyd Award for Distinction in Graduate Education in 2006, and the American Accounting Associations Deloitte/Wildman Award in 2013.