Auditing: The Art and Science of Assurance Engagements 15th Canadian Edition PDF by Alvin A. Arens, Randal J. Elder, Mark S. Beasley, Chris E. Hogan, Joanne C. Jones and Bartosz M. Amerski

By

Auditing: The Art and Science of Assurance Engagements, Fifteenth Canadian Edition

By Alvin A. Arens, Randal J. Elder, Mark S. Beasley, Chris E. Hogan, Joanne C. Jones and Bartosz M. Amerski

Auditing_ The Art and Science of Assurance Engagements

Contents:

Preface ix

1 The Demand for Audit and Other

Assurance Services 1

LEARNING OBJECTIVES 1

What are Assurance Engagements? 2

What is Auditing? 3

Why are Audits and Other Assurance Engagements

Needed? 7

Common Types of Assurance Engagements 10

Types of Auditors 11

Accounting vs. Auditing 14

Assurance and Nonassurance Services Offered

by Public Accountants 15

Summary 19

Review Questions 19

Multiple Choice Questions 20

Discussion Questions and Problems 21

Professional Judgment Problems and Cases 23

Applying Your Professional Judgment to Hillsburg

Hardware 24

2 The Public Accounting Profession

and Audit Quality 25

LEARNING OBJECTIVES 25

An Overview of the Canadian Public Accounting

Industry 26

Organizations Affecting the Canadian Public

Accounting Profession 29

CPA Canada Assurance Standards 32

Principles Underlying the Financial Statement

Audit 33

The Drivers of Audit Quality 39

Quality Control 40

Summary 43

Review Questions 44

Multiple Choice Questions 44

Discussion Questions and Problems 46

Professional Judgment Problems and Cases 47

Applying Your Professional Judgment at Hillsburg 48

3 Professional Ethics and Legal Liability 50

LEARNING OBJECTIVES 50

Professional Ethics and Public Accountants 51

A Framework for Ethical Reasoning 52

Ethical Blind Spots 57

Professional Guidance on Ethical Conduct 57

The Independence Standard for Assurance

Engagements 61

Enforcement of the Code of Professional Conduct 67

The Expectations Gap 68

Audit Failure and Audit Liability 70

Summary 75

Review Questions 76

Multiple Choice Questions 76

Discussion Questions and Problems 78

Professional Judgment Problems and Cases 82

Applying Your Professional Judgment to Hillsburg Hardware 85

4 Audit Responsibilities and Objectives 86

LEARNING OBJECTIVES 86

Management’s Responsibilities 87

Responsibilities of those Charged with Governance 88

Auditor’s Responsibilities 89

Framework for Professional Judgment 94

Professional Skepticism 97

Financial Statement Cycles 99

Management Assertions 104

An Overview of the Audit Process 112

Summary 117

Review Questions 117

Multiple Choice Questions 118

Discussion Questions and Problems 119

Professional Judgment Problems and Cases 123

Applying Your Professional Judgment to Hillsburg 125

5 Audit Evidence 126

LEARNING OBJECTIVES 126

Nature of Audit Evidence 127

Audit Evidence Decisions 128

Persuasiveness of Evidence 130

Types of Audit Procedures 134

Design Analytical Procedures 143

Use of Audit Data Analytics and Advanced

Technologies 150

Documentation 156

Professional Skepticism, Evidence, and Documentation 160

APPENDIX 5A: Common Financial Ratios 162

Summary 164

Review Questions 164

Multiple Choice Questions and Task-Based Simulations 165

Discussion Questions and Problems 168

Professional Judgment Problems and Cases 171

Applying Your Professional Judgment to Hillsburg Hardware 172

6 Client Acceptance, Preliminary

Planning, and Materiality 174

LEARNING OBJECTIVES 174

Planning for What Can Go Wrong 175

Client Acceptance and Continuance 177

Overall Audit Strategy 185

Understand the Entity and Its Environment and the

Applicable Accounting Framework 188

Risk Assessment Procedures and Information from

Other Sources 192

Preliminary Analytical Review 196

Materiality 199

Determine Overall Materiality 200

Determine Performance Materiality 204

Determine Specific Materiality 208

Applying Materiality—Evaluating Results and

Completing the Audit 208

Summary 211

Review Questions 211

Multiple Choice Questions and Task-Based Simulations 212

Discussion Questions and Problems 215

Professional Judgment Problems and Cases 218

Applying Your Professional Judgment to Hillsburg Hardware 221

7 Risk Assessment and Inherent Risk 222

LEARNING OBJECTIVES 222

The Audit Risk Model 223

Inherent Risk Assessment 229

Risk Response for Levels of Risk 234

Considering Fraud Risk 236

Conditions for Fraud 238

Risk Response for Fraud Risks 242

Summary 244

Review Questions 244

Multiple Choice Questions and Task-Based Simulations 245

Discussion Questions and Problems 248

Professional Judgment Problems and Cases 251

Applying Your Professional Judgment to the Hillsburg Audit 253

8 Understanding the Internal

Control System 255

LEARNING OBJECTIVES 255

Internal Control Objectives 256

Management’s Responsibility for Internal Control 257

Auditors Responsibilities for Internal Control 258

COSO Components of Internal Control 260

Internal Controls Specific to Information

Technology 273

Impact of Information Technology on the System of

Internal Control 278

Impact of Emerging Technologies on Internal

Control 284

Understanding Controls of Small Businesses 285

Summary 286

Review Questions 287

Multiple Choice Questions and Task-Based Simulations 288

Discussion Questions and Problems 290

Professional Judgment Problems and Cases 291

Applying Your Professional Judgment to Hillsburg Hardware 293

9 Control Risk Assessment 294

LEARNING OBJECTIVES 294

Understand and Evaluate Internal Control 295

Control Risk Assessment 311

Tests of Controls 314

Auditor Reporting on Internal Control 319

Reporting on Internal Controls for Some Public

Companies 320

Summary 321

Review Questions 321

Multiple Choice Questions and Task-Based Simulations 322

Discussion Questions and Problems 324

Professional Judgment Problems and Cases 327

Applying Your Professional Judgment to Hillsburg Hardware 329

10 Risk Response: Audit Strategy, Overall

Approach, and Audit Program 330

LEARNING OBJECTIVES 330

Overall Audit Strategy 331

Audit Plan and Audit Procedures 335

Appropriate Mix of Audit Procedures and Audit

Approach 340

Design Effective Further Audit Procedures 346

Design Audit Programs 350

Summary 352

Review Questions 352

Multiple Choice Questions and Task-Based Simulations 353

Discussion Questions and Problems 356

Professional Judgment Problems and Cases 357

Applying Your Professional Judgment to Hillsburg Hardware 361

11 Audit Sampling Concepts 362

LEARNING OBJECTIVES 362

Selecting Items to Test and Sampling 363

Representative Sampling and Its Risks 364

Statistical vs. Nonstatistical Sampling and Probabilistic

Nonprobabilistic Sample Selection 365

Sample Selection Methods 367

An Overview of the Audit Sampling Process 370

Using Sampling for Tests of Controls 372

Statistical Sampling for Tests of Controls 382

Using Sampling for Substantive Tests of Details 384

Nonstatistical Sampling for Substantive Tests 384

Statistical Sampling for Substantive Tests of Details 392

Audit Data Analytics vs. Sampling 395

Adequate Documentation and Professional Judgment 397

Summary 398

Review Questions 399

Multiple Choice Questions and Task-Based Simulations 400

Discussion Questions and Problems 401

Professional Judgment Problems and Cases 403

Applying Your Professional Judgment to

Hillsburg Hardware 405

12 Audit of the Revenue Cycle 407

LEARNING OBJECTIVES 407

Overview of the Revenue Process 408

Identify Inherent Risk Factors and Determine Significant

Risks 415

Assess Control Risk 423

Determine Audit Approach for Revenue Cycle 424

Design Tests of Controls 426

Design Substantive Procedures 433

Design Fraud Procedures for Revenue 447

Summary 448

Review Questions 449

Multiple Choice Questions and Task-Based Simulations 450

Discussion Questions and Problems 452

Professional Judgment Problems and Cases 455

Applying Your Professional Judgment to Hillsburg

Hardware 460

13 Audit of the Acquisition and

Payment Cycle 462

LEARNING OBJECTIVES 462

An Overview of the Acquisition and

Payment Cycle 463

Identify Inherent Risk factors and Determine Significant

Risks 469

Understand Key Controls 475

Determine Audit Approach for Acquisition and Payment

Cycle 477

Design Tests of Controls 478

Design Substantive Procedures 482

Auditing Property, Plant, and Equipment 487

Summary 493

Review Questions 494

Multiple Choice Questions and Task-Based Simulations 495

Discussion Questions and Problems 497

Professional Judgment Problems and Cases 500

Applying Your Professional Judgment to Hillsburg

Hardware 502

14 Audit of the Inventory and

Distribution Cycle 504

LEARNING OBJECTIVES 504

Overview of the Inventory and Distribution Cycle 505

Identify Inherent Risks and Determine Significant

Risks 509

Assess Control Risk 513

Determine Audit Approach for Inventory and

Distribution Cycle 516

Design Tests of Controls 518

Design Substantive Procedures 519

Design Fraud Procedures for Inventory 525

Summary 526

Review Questions 526

Multiple Choice Questions and Task-Based

Simulations 527

Discussion Questions and Problems 529

Professional Judgment Problems and Cases 532

Applying Your Professional Judgment to Hillsburg

Hardware 534

15 Audit of the Human Resources

and Payroll Cycle 536

LEARNING OBJECTIVES 536

An Overview of the Human Resources and Payroll

Cycle 537

Identify Inherent Risk Factors and Determine Significant

Risks 540

Understand Key Controls 542

Determine Audit Approach for Human Resources and

Payroll 546

Design Tests of Controls 547

Design Substantive Procedures 547

Design Fraud Procedures for Human Resources and

Payroll 551

Summary 552

Review Questions 553

Multiple Choice Questions and Task-Based Simulations 554

Discussion Questions and Problems 555

Professional Judgment Problems and Cases 556

Applying Your Professional Judgment to Hillsburg

Hardware 558

16 Audit of Cash and Cash

Equivalents 559

LEARNING OBJECTIVES 559

Overview of Cash Accounts 561

Identify Inherent Risk Factors and Determine

Significant Risks 562

Understand Key Controls and Assess Control Risk 563

Design Substantive Procedures 565

Design Fraud Procedures for Cash 570

Summary 574

Review Questions 575

Multiple Choice Questions and Task-Based Simulations 576

Discussion Questions and Problems 577

Professional Judgment Problems and Cases 579

Applying Your Professional Judgment to Hillsburg

Hardware 580

17 Completing the Audit 581

LEARNING OBJECTIVES 581

Complete Final Evidence Gathering 582

Review for Contingent Liabilities and

Commitments 584

Obtain Confirmations from Client’s External and/or In-

House Legal Counsel 588

Review for Subsequent Events 591

Accumulate Final Evidence 594

Evaluate Results 597

Evaluate Other Information 604

Communicate with the Audit Committee and

Management 606

Summary 610

Review Questions 610

Multiple Choice Questions 611

Discussion Questions and Problems 612

Professional Judgment Problems and Cases 616

Applying Your Professional Judgment to Hillsburg 617

18 Audit Reports on Financial

Statements 619

LEARNING OBJECTIVES 619

The Audit Opinion and the Auditors’ Reporting

Responsibilities 620

The Unmodified Audit Opinion 622

Elements of the Auditor’s Report 622

Reporting Material Uncertainty for Going

Concern 628

Identify and Disclose Key Audit Matters 629

Determine Whether Emphasis of Matter or Other

Matter Paragraphs are Necessary 630

Decide Whether Modifications to the Audit Opinion are

Necessary 633

Qualified Audit Opinions 636

Adverse Audit Opinion 640

Disclaimer of Opinion 640

How the Audit Report Adds Value 642

Summary 643

Review Questions 644

Multiple Choice Questions 645

Discussion Questions and Problems 646

Professional Judgment Problems and Cases 648

Applying Your Professional Judgment to Hillsburg 650

19 Other Audits, Assurance Engagements,

and Related Services 651

LEARNING OBJECTIVES 651

Deciding which Standards Apply 652

Reviews and Compilations of Financial information 657

The Review Engagement Process 659

Compilation Engagements 665

Review of Interim Financial Statements 668

Assurance Engagements for Nonfinancial

Information 669

Assurance Over Compliance with Agreements and

Regulations 675

Agreed-upon Procedures Engagements 678

Reports on Supplemental Matters Arising from an Audit

or Review Engagement 683

The Future of Assurance Services 684

Summary 685

Review Questions 686

Multiple Choice Questions 687

Discussion Questions and Problems 687

Professional Judgment Problems and Cases 689

Applying Your Professional Judgment to Hillsburg 691

Online

20 Audit of the Capital Acquisition and

Repayment Cycle

Appendix: Hillsburg Hardware Limited 692

Index 701

Credits 719

This book is US$10. Order for this book:
(Request for free sample pages click on "Order Now" button)

Book Order
Or, Send email: [email protected]

Share this Book!

Leave a Comment

This site uses Akismet to reduce spam. Learn how your comment data is processed.