PART1 The Auditing Profession
1 The Demand for Audit and Other Assurance Services Learning Objectives
Nature of Auditing
Distinction Between Auditing and Accounting
Economic Demand for Auditing
Assurance Services
Types of Audits
Types of Auditors
Certified Public Accountant
2 The CPA Profession Learning Objectives
Certified Public Accounting Firms
Activities of CPA 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)
Generally Accepted Auditing Standards
Statements on Auditing Standards
International Standards on Auditing
Quality Control
3 Audit Reports Learning Objectives
Standard Unqualified Audit Report
Combined Reports on Financial Statements and Internal Control Over Financial Reporting Under Section of the Sarbanes-Oxley Act
Unqualified Audit Report with Explanatory Paragraph or Modified Wording
Departures from an Unqualified Audit Report
Materiality
Discussion of Conditions Requiring a Departure
Auditors Decision Process for Audit Reports
Impact of E-Commerce on Audit Reporting
4 Professional Ethics Leamlng Objectives
What Are Ethics?
Ethical Dilemmas
Special Need for Ethical Conduct in Professions
Code of Professional Conduct
Independence
Independence Rule of Conduct and Interpretations
Other Rules of Conduct
Enforcement
5 Legal Liability Learning Objectives
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 Professions Response to Legal Liability
Protecting Individual CPAs from Legal Liability
PART2 The Audit Process
6 Audit Responsibilities and Objectives Learning Objectives
Objective of Conducting an Audit of Financial Statements
Managements Responsibilities
Auditors Responsibilities
Financial Statement Cycles
Setting Audit Objectives
Management Assertions
Transaction-Related Audit Objectives
Balance-Related Audit Objectives
Presentation and Disclosure-Related Audit Objectives
How Audit Objectives Are Met
7 Audit Evidence Learning Objectives
Nature of Evidence
Audit Evidence Decisions
Persuasiveness of Evidence
Types of Audit Evidence
Audit Documentation
8 Audit Planning and Analytical Procedures Learning Objectives
Planning
Accept Client and Perform Initial Audit Planning
Understand the Clients Business and Industry
Assess Client Business Risk
Perform Preliminary Analytical Procedures
Summary of the Parts of Audit Planning
Analytical Procedures
Five Types of Analytical Procedures
Common Financial Ratios
9 Materlallty and Risk Learning Objectives
Materiality
Set Preliminary Judgment about Materiality
Allocate Preliminary Judgment about Materiality to Segments(Tolerable Misstatement)
Estimate Misstatement and Compare with Preliminary Judgment
Risk
Types of Risks
Assessing Acceptable Audit Risk
Assessing Inherent Risk
Relationship of Risks to Evidence and Factors Influencing Risks
Evaluating Results
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PART3 Application of the Audit Process to the Sales and Collection Cycle
PART4 Application of the Audit Process to Other Cycles
PART5 Completing the Audit