Description
The 10th Edition includes the following important features and enhancements:
∙ A “professional judgment” module, designed to accelerate the development of the student’s profes-
sional judgment and based on the AAA Deloitte/Wildman Award-winning KPMG Professional Judg-
ment monograph, is now included in the print version of the book. Additional resources relating to this
module are available through KPMG’s University Connection website.
∙ Increased use of “Stop and Think” questions throughout the book to encourage students to more fully
internalize key concepts.
∙ User-focused, user-friendly improvements.
∙ Chapter 2 has been updated for recent changes in the audit environment, Chapter 3 presents the latest
information available on major firms’ audit guidance relating to materiality, Chapter 6 reflects COSO’s
new internal control framework, and Chapter 19 includes coverage of professional conduct consistent
with the AICPA’s newly reorganized Code of Professional Conduct.
∙ Increased use of Practice Insights that provide a link from the textbook material to the real world.
∙ The introduction of IDEA audit software. IDEA is a powerful and user-friendly data analysis tool
designed to help auditors perform data analysis, audit sampling, and other audit procedures efficiently
and effectively. IDEA is illustrated in Chapters 8 and 9 and there are end-of-chapter IDEA assignments
and problems for hands-on application throughout the book.
∙ Improved descriptions of the hands-on EarthWear Mini-Cases that provide students with opportunities
to apply audit professional judgment and practice audit procedures.
∙ Clarified explanations of technical business and accounting jargon.
∙ Improved linkage between chapter content and end-of-chapter material.
∙ References to auditing standards reflect the new codification of AICPA ASB clarity standards.
Here is a sampling of the improvements made in recent editions:
Chapter 1, An Introduction to Assurance and Financial Statement Auditing
∙ Discussion of fundamental concepts of auditing streamlined and clarified
Chapter 2, The Financial Statement Auditing Environment
∙ Updated to reflect changes in audit environment
∙ Includes AICPA’s “principles underlying an audit” in addition to PCAOB’s traditional set of “generally
accepted auditing standards”
Chapter 3, Audit Planning, Types of Audit Tests, and Materiality
∙ Revised engagement letter for an integrated audit
∙ Discussion of the current practices of the major auditing firms based on a recent article by Aasmund
Eilifsen and Bill Messier
Chapter 4, Risk Assessment
∙ Improved presentation of the risk assessment process
∙ Revised presentation of the fraud risk assessment process
∙ Addition of a new case based on the fraud at Koss Corporation
Chapter 5, Evidence and Documentation
∙ Revised Advanced Module on the use of substantive analytical procedures
Chapter 6, Internal Control in a Financial Statement Audit
∙ New discussion case about the fraud in Dixon, Illinois
∙ An extension of the Koss Corporation fraud that considers the control deficiencies
Chapter 7, Auditing Internal Control over Financial Reporting
∙ Easier to understand explanations of the important steps in the audit of internal control over
financial reporting
Chapter 8, Audit Sampling: An Overview and Application to Tests of Controls
∙ Introduction of industry leading IDEA auditing software to this edition of the book with illustrations of
how to use IDEA for attribute sampling within the chapter.
∙ Updated for academic research examining audit sampling in practice
Chapter 9, Audit Sampling: An Application to Substantive Tests of Account Balances
∙ Introduction of industry leading IDEA auditing software to this edition of the book with illustrations of
how to use IDEA for monetary unit sampling within the chapter.
∙ Updated for academic research examining audit sampling in practice
Chapters 10–16, Business Process Chapters
∙ Revised for enhanced clarity and brevity
∙ Clarified illustrations linking assertions to possible misstatements to example controls and tests
of controls
∙ Updated exhibits and practice insights for recent events
Chapter 17, Completing the Audit Engagement
∙ Improved examples to illustrate the possible self-fulfilling prophecy effects of going concern opinions,
and to explain the role and impact of commitments in completing an audit
∙ Clarified discussion of auditor’s responsibility for subsequent events
∙ Enhanced discussion of evaluation of misstatements in light of qualitative materiality considerations
∙ New coverage of iron curtain versus roll-over methods of assessing materiality of misstatements
Chapter 18, Reports on Audited Financial Statements
∙ Updated for recent developments including the new “clarified” form of the ASB audit report
Chapter 19, Professional Conduct, Independence, and Quality Control
∙ Updated for changes in the newly reorganized AICPA Code of Professional Conduct
∙ Discussion of quality control and peer review/inspection updated for recent changes in
relevant standards
Chapter 20, Legal Liability
∙ Updated for important recent cases and statutory law
Chapter 21, Assurance, Attestation, and Internal Auditing Services
∙ Updated standards relating to practitioner independence in compilation engagements
∙ Attestation reports updated for new AICPA standards
∙ Updated to reflect changes in IIA standards
∙ Updated to reflect changes to structure around Trust Services principles and practices