Description
Table of Contents
Part 1: The Auditing Profession
Chapter 1: The Demand for Audit and Other Assurance Services
· Nature of Auditing
· Distinction Between Auditing and Accounting
· Economic Demand for Auditing
· Assurance Services
· Types of Audits
· Types of Auditors
· Certified Public Accountant
Chapter 2: The CPA Profession
· Certified Public Accounting Firms
· Structure of CPA Firms
· Sarbanes—Oxley Act and Public Company Accounting Oversight Board
· Securities and Exchange Commission
· American Institute of Certified Public Accountants (AICPA)
· International and U.S. Auditing Standards
· Organization of U.S. Auditing Standards
· Quality Control
Chapter 3: Audit Reports
· Standard Unmodified Opinion Audit Report for Nonpublic Entities
· Conditions for Standard Unmodified Opinion Audit Report
· Standard Audit Report and Report on Internal Control Over Financial Reporting Under PCAOB Auditing Standards
· Unmodified Opinion Audit Report with Emphasis-of-Matter Explanatory Paragraph or Nonstandard Report Wording
· Modifications to the Opinion in the Audit Report
· Materiality
· Discussion of Conditions Requiring a Modification of Opinion
· Auditor’s Decision Process for Audit Reports
· International Accounting and Auditing Standards
Chapter 4: Professional Ethics
· What Are Ethics?
· Ethical Dilemmas
· Special Need for Ethical Conduct in Professions
· Code of Professional Conduct
· Independence Rule
· Sarbanes—Oxley and Related Independence Requirements
· Other Rules of Conduct
· Enforcement
Chapter 5: Legal Liability
· Changed Legal Environment
· Distinguishing Business Failure, Audit Failure, and Audit Risk
· Legal Concepts Affecting Liability
· Liability to Clients
· Liability to Third Parties Under Common Law
· Civil Liability Under the Federal Securities Laws
· Criminal Liability
· The Profession’s Response to Legal Liability
Part 2: The Audit Process
Chapter 6: Audit Responsibilities and Objectives
· Objective of Conducting an Audit of Financial Statements
· Management’s Responsibilities
· Auditor’s Responsibilities
· Professional Skepticism
· Professional Judgment
· Financial Statement Cycles
· Setting Audit Objectives
· Management Assertions
· Transaction-Related Audit Objectives
· Balance-Related and Presentation and Disclosure-Related Audit Objectives
· How Audit Objectives Are Met
Chapter 7: Audit Evidence
· Nature of Evidence
· Audit Evidence Decisions
· Persuasiveness of Evidence
· Types of Audit Evidence
· Analytical Procedures
· Common Financial Ratios
· Audit Documentation
Chapter 8: Audit Planning and Materiality
· Planning
· Accept Client and Perform Initial Audit Planning
· Understand the Client’s Business and Industry
· Perform Preliminary Analytical Procedures
· Materiality
· Materiality for Financial Statements as a Whole
· Determine Performance Materiality
· Estimate Misstatement and Compare with Preliminary Judgment
Chapter 9: Assessing the Risk of Material Misstatement
· Audit Risk
· Risk Assessment Procedures
· Considering Fraud Risk
· Identification of Significant Risks
· Audit Risk Model
· Assessing Acceptable Audit Risk
· Assessing Inherent Risk
· Relationship of Risks to Evidence and Factors Influencing Risks
· Relationship of Risk and Materiality to Audit Evidence
Chapter 10: Assessing and Responding to Fraud Risks
· Types of Fraud
· Conditions for Fraud
· Assessing the Risk of Fraud
· Corporate Governance Oversight to Reduce Fraud Risks
· Responding to the Risk of Fraud
· Specific Fraud Risk Areas
· Responsibilities When Fraud Is Suspected
· Documenting the Fraud Assessment
Chapter 11: Internal Control and Coso Framework
· Internal Control Objectives
· Management and Auditor Responsibilities for Internal Control
· COSO Components of Internal Control
· Internal Controls Specific to Information Technology
· Impact of IT Infrastructure on Internal Control
Chapter 12: Assessing Control Risk and Reporting on Internal Controls
· Obtain and Document Understanding of Internal Control
· Assess Control Risk
· Tests of Controls
· Decide Planned Detection Risk and Design Substantive Tests
· Auditor Reporting on Internal Control
· Evaluating, Reporting, and Testing Internal Control for Nonpublic and Smaller Public Companies
· Impact of IT Environment on Control Risk Assessment and Testing
Chapter 13: Overall Audit Strategy and Audit Program
· Types of Tests
· Selecting Which Types of Tests to Perform
· Evidence Mix
· Design of the Audit Program
· Summary of Key Evidence-Related Terms
· Summary of the Audit Process
Part 3: Application of the Audit Process to the Sales and Collection Cycle
Chapter 14: Audit of the Sales and Collection Cycle: Tests of Controls and Substantive Tests of Transaction
· Accounts and Classes of Transactions in the Sales and Collection Cycle
· Business Functions in the Cycle and Related Documents and Records
· Methodology for Designing Tests of Controls and Substantive Tests of Transactions for Sales
· Sales Returns and Allowances
· Methodology for Designing Tests of Controls and Substantive Tests of Transactions for Cash Receipts
· Audit Tests for Uncollectible Accounts
· Effect of Results of Tests of Controls and Substantive Tests of Transactions
Chapter 15: Audit Sampling for Tests of Controls and Substantive Tests of Transactions
· Representative Samples
· Statistical Versus Nonstatistical Sampling and Probabilistic Versus Nonprobabilistic Sample Selection
· Sample Selection Methods
· Sampling for Exception Rates
· Application of Nonstatistical Audit Sampling
· Statistical Audit Sampling
· Application of Attributes Sampling
Chapter 16: Completing the Tests in the Sales and Collection Cycle: Accounts Receivable
· Methodology for Designing Tests of Details of Balances
· Designing Tests of Details of Balances
· Confirmation of Accounts Receivable
· Developing Tests of Details Audit Program
Chapter 17: Audit Sampling for Tests of Details of Balances
· Comparisons of Audit Sampling for Tests of Details of Balances and for Tests of Controls and Substantive Tests of Transactions
· Nonstatistical Sampling
· Monetary Unit Sampling
· Variables Sampling
· Illustration Using Difference Estimation
Part 4: Application of the Audit Process to Other Cycles
Chapter 18: Audit of the Acquisition and Payment Cycle: Tests of Controls, Substantive Tests of Transactions, and Accounts Payable
· Accounts and Classes of Transactions in the Acquisition and Payment Cycle
· Business Functions in the Cycle and Related Documents and Records
· Methodology for Designing Tests of Controls and Substantive Tests of Transactions
· Methodology for Designing Tests of Details of Balances for Accounts Payable
Chapter 19: Completing the Tests in the Acquisition and Payment Cycle: Verification of Selected Accounts
· Types of Other Accounts in the Acquisition and Payment Cycle
· Audit of Property, Plant, and Equipment
· Audit of Prepaid Expenses
· Audit of Accrued Liabilities
· Audit of Income and Expense Accounts
Chapter 20: Audit of the Payroll and Personnel Cycle
· Accounts and Transactions in the Payroll and Personnel Cycle
· Business Functions in the Cycle and Related Documents and Records
· Methodology for Designing Tests of Controls and Substantive Tests of Transactions
· Methodology for Designing Substantive Analytical Procedures and Tests of Details of Balances
Chapter 21: Audit of the Inventory and Warehouse Cycle
· Business Functions in the Cycle and Related Documents and Records
· Parts of the Audit of Inventory
· Audit of Cost Accounting
· Substantive Analytical Procedures
· Physical Observation of Inventory
· Audit of Pricing and Compilation
· Integration of the Tests
Chapter 22: Audit of the Capital Acquisition and Repayment Cycle
· Accounts in the Cycle
· Notes Payable
· Owners’ Equity
Chapter 23: Audit of Cash and Financial Instruments
· Types of Cash and Financial Instruments Accounts
· Cash in the Bank and Transaction Cycles
· Audit of the General Cash Account
· Fraud-Oriented Procedures
· Audit of Financial Instruments Accounts
Part 5: Completing the Audit
Chapter 24: Completing the Audit
· Perform Additional Tests for Presentation and Disclosure
· Review for Contingent Liabilities and Commitments
· Review for Subsequent Events
· Final Evidence Accumulation
· Evaluate Results
· Issue the Audit Report
· Communicate with the Audit Committee and Management
· Subsequent Discovery of Facts
Part 6: Other Assurance and Nonassurance Services
Chapter 25: Other Assurance Services
· Review, Compilation, and Preparation Services
· Review of Interim Financial Information for Public Companies
· Attestation Engagements
· Reports on Controls at Service Organizations (SOC Reports)
· Prospective Financial Statements
· Agreed-Upon Procedures Engagements
· Other Audits or Limited Assurance Engagements
Chapter 26: Internal and Governmental Financial Auditing and Operational Auditing
· Internal Financial Auditing
· Governmental Financial Auditing
Operational Auditing
