Accurate auditing, importance of, 2
Adoption/SEC approval, 86
AICPA. See American Institute of Certified Public Accountants
AICPA ASB auditing standard, 287–293
AICPA Code, 66
AICPA Statements on Auditing Standards (SASs), 9
American Institute of Certified Public Accountants (AICPA), 2–4, 6, 8, 54, 60, 83, 229–230
Analytical procedures
differences between PCAOB and ISA, 171–172
nature and purpose of, 163–165
data mining, 168
ratio analysis, 167
reasonableness testing, 168
trend analysis, 167
Anomalous error, 203
Article 483, 48
Article 1101, 50
Article 1142, 46
Article 1383, 46
Article 1902, 50
AS 5, 89, 128, 135, 145, 146, 150, 152–157
ASB. See Auditing Standards Board
AU. See Existing interim
AU 5, 155
AU 230, 17
AU 325, 152
AU 330, 108
AU 543, 121
AU 600, 122
AU 625, 63
Audit approach, planning and design of, 20–21
Audit documentation, 88–89, 190–191, 213–214
custodial issues related to, 222
nature of, 215
preparation of, time periods for, 219
purpose of, 215
Audit evidence, evaluating sufficiency and appropriateness of, 188–190
Audit of financial statements, principles governing, 17–18
Audit opinion formulation, 202
Audit report
audit and issuance of, 22
Audit sampling
anomalous error, 203
dual purpose sampling, 199–201
error, 203
nonstatistical sampling, 201–202
opinion formulation, 202
PCAOB standards evolution, 193–194
“representative” sampling, 198–199
results, performance and evaluation of, 207–209
selecting specific items, 195
whole population selection, 194–195
Audit/client acceptance, planning
client acceptance/engagement process, 94–103
related party transactions, 111–125
Auditing accounting estimates, 281–282
Auditing, final considerations, 257–267
Auditing Standards Board (ASB), 8, 11, 17, 18, 83, 91, 193, 235
Auditor
Auditor shopping, 101
Auditor’s duty, 11
Auditor’s report
going concern related, 270
PCAOB required amendments, 270–271
Auditor’s responsibility, 237–239
Balance sheet, 13, 103, 157, 187, 189, 233, 248, 254
Benjamin, Matthew, 134
Bily v. Arthur Young and Co., 30
The British Companies Acts, 6
CAATs. See Computer Assisted Audit Techniques
CAM. See Critical audit matters
Certified Public Accountants (CPAs), 27, 91
CFO. See Chief Financial Officer
Chief Financial Officer (CFO), 16
Citizens State Bank v. Timm, Schmidt and Co., 31
Civil Code, 41, 45, 46, 49, 50
Civil Practices Act, 36
Clarified International Standards on Auditing, 9
Client acceptance, 20
Client-auditor relationship, 98
Codified law, 43
Cohen Commission (1978), 11
Committee of Sponsoring Organizations of the Treadway Commission (COSO), 136
Common law, 25–26, 27, 28–29, 41
Competence, 137
Compliance audits, 15
Compliance frameworks v. fair presentation frameworks, 255–256
Computer Assisted Audit Techniques (CAATs), 183, 197
Conceptualization, 85
Control accounts, 146
Corporate governance, defined, 257–258
Corporate Law Economic Reform Program Act 1999, 55
COSO. See Committee of Sponsoring Organizations of the Treadway Commission
CPAs. See Certified Public Accountants
Credit Alliance Corp v. Arthur Andersen and Co, 31
Critical audit matters (CAM), 271–275
Current file, 218
Danish Companies Act, 40
Danish law, 40
Data mining, 168
Davison and Benson Committees, 11
Deloitte Touche report, 113–115, 118
Dingell Committee (1987), 11
Disclaimer of opinion, 242–244
Documentation procedures, 88
Dodd-Frank Wall Street Reform and Consumer Protection Act, 85
Dual purpose sampling, 199–201
Due professional care, 21
Dutch Civil Code, 47
EC. See European Community
EEC. See European Economic Commission
Eighth Company Directive, 55, 56
El Paso Energy Company, 146
Engagement Completion Memorandum, 88, 224
Engagement partner, 276
Engagement quality control (EQC), 281
EQC. See Engagement quality control
Equity Funding Corporation of America, 33
Error, defined, 203
ESM Government Securities v. Alexander Grant and Co (1985), 34
Ethical values, 137
European Community (EC), 28
European Economic Commission (EEC), 36, 37
Existing interim (AU), 9
Fair presentation frameworks v. compliance frameworks, 255–256
Financial interest threats, 67–69
Financial Reporting Council (FRC), 55
Financial statement audit, 14–15
Firm, going concern status of, 252–255
Fogarty notes, 91
Foreign subsidiaries, use of another auditor in, 280–281
Forseeability, 29
FRC. See Financial Reporting Council
Fundamental premise, 8
GAAP. See Generally accepted accounting principles
GAAS. See Generally accepted auditing standards
Generally accepted accounting principles (GAAP), 14, 33
Generally accepted auditing standards (GAAS), 84
Going concern, 89
Green Paper, 56
Handelsgesetzbuch (HGB), 38
Herzfeld v. Laventhol, Krekstein, Howarth and Howarth (1974), 32
HGB. See Handelsgesetzbuch
Horizons for the Auditing Standards Board, 8
Human resources policies/practices, 138–139
IAASB. See International Auditing Assurance Standards Board
IAG. See Investor Advisory Group
ICAEW. See Institute of Chartered Accountants of England and Wales
Identified users, 30
IESBA. See International Ethics Standards Board of Accounting
IFAC. See International Federation of Accountants
IFRS. See International Financial Reporting Standards
Institute of Chartered Accountants of England and Wales (ICAEW), 5
Integrity values, 137
Internal auditors, 16
Internal control over financial reporting, 89–90, 279
Internal controls, risk assessment and tests of
assessing technological, techniques and guidelines for, 129–130
control procedures/activities, 144–149
economic, techniques and guidelines for, 129–130
entity’s financial performance, measurement and review of, 135–136
entity’s risk assessment process, auditor’s assessment of, 139–143
internal control assessment, 153–154
internal control standards, 150–151
discussions relating to material weaknesses in, 151–153
legal, techniques and guidelines for, 129–130
monitoring of controls, 149–150
overall objectives strategies/related business risks, 134–135
review of, 136
tests, tests of internal controls and communication of the results of, 154–158
International auditing
audit of financial statements, principles governing, 17–18
internal, 16
compliance audits, 15
financial statement audit, 14–15
operational audits, 15
definition to, 10
limitation of, 18
risks faced by auditors, 18–19
standard audit process model, 19–22
International Auditing Assurance Standards Board (IAASB), 2, 4, 8, 9, 12, 222
International auditors, ethics for
commonalities between IESBA and AICPA codes, 64–66
IFAC, ethical standards required by, 66–67
IFAC ethics code, nonaudit services to audit clients under, 73–79
corporate finance and similar activities, 78–79
provision of information technology systems services, 76–77
provision of internal audit services, 75–76
provision of legal services to financial statement audit clients, 77–78
provision of litigation support services, 76
recruiting senior management, 78
taxation services, 75
temporary staff assignments to financial statement audit clients, 77
independence, threats to, 67–72
financial interest threats, 67–69
United States, developments in, 79–81
Rule 3502, 81
Rule 3521, 80
Rule 3522(b), 80
Rule 3522(a), 80
Rule 3523, 80
Rule 3524, 81
International Ethics Standards Board of Accounting (IESBA), 59, 60, 62
International Federation of Accountants (IFAC), 2, 6–8, 17, 59–62, 67, 97
International Financial Reporting Standards (IFRS), 3
International Standard on Quality Control, 102
International Standards for Auditing (ISA), 2, 3, 6–8, 10, 17, 18, 67, 86, 96, 97, 119, 135, 136, 150, 153, 163, 213
International Standards on Quality Control (ISQC), 215
International/U.S. audit environments
auditor regulation, recent developments in, 53–55
SOX, non-United States equivalents to, 55
Investor Advisory Group (IAG), 85
ISA. See International Standards for Auditing
ISA 200, 10, 12, 17, 19, 139, 140
ISA 210, 20, 96, 99, 101, 103–105
paragraph 3 of, 214
paragraph 5 of, 215
paragraph 9 of, 214
significant matters and issues, 222–225
v. PCAOB’s AS 3, 219, 221, 225
ISA 265, 151, 152, 155, 156, 157
ISA 315, 21, 106–110, 129, 130, 132–137, 140–144, 147–149, 151, 154
ISA 320, 111
ISA 330, 111
paragraph 31 of, 183
paragraph 49 of, 178
paragraph 51 of, 180
ISA 501, 21
ISA 510, 98
ISA 530
paragraph 4 of, 203
paragraph 25 of, 195
paragraph 28 of, 201
ISA 550, 22, 109, 111, 112, 114–118
ISA 560, 22
paragraph 3 of, 251
paragraph 16 of, 249
ISA 570, 22
ISA 580, 22
ISA 610, 125
ISA 620, 22, 120, 121, 123, 124
paragraph 7 of, 232
paragraph 18 of, 231
paragraph 20 of, 231
paragraph 22 of, 231
paragraph 26 of, 236
paragraph 32 of, 237
paragraph 43 of, 240
paragraph 46 of, 238
ISA 701, 246
ISA 720, 246
paragraph 6 of, 247
ISA auditing standards, 287–293
ISQC. See International Standards on Quality Control
Japanese Institute of Certified Public Accountants (JICPA), 263
JICPA. See Japanese Institute of Certified Public Accountants
Judgment, 18
KAM. See Key audit matters
Key audit matters (KAM), 271–275
KPMG Peat Marwick, 98
LCSC. See Loi coordomnee sure les societes commerciales
Loi coordomnee sure les societes commerciales (LCSC), 39
Management’s operating style, 137
Management’s philosophy, 137
Material misstatements of fact, 247–248
National Marketing Corporation, 33
Nature of the Entity, 108
Negligence, 27
New Jersey Supreme Court, 31
Nikkei exchange indexed derivatives, 147
Nonstatistical sampling, 201–202
Operational audits, 15
Opinion shopping, 97
Organizational structure, 138
Osborne Computer Company, 30
Oxley, Michael G., 53
PCAOB. See Public Company Accounting Oversight Board
Permanent file, 217
Principles-based accounting, 8
Privity, 27
Proposal, 86
Public Company Accounting Oversight Board (PCAOB)
AS 3 v. ISA 230, 219, 221, 225
v. ISA 700, 232
AU 350
paragraph 10 of, 204
projecting misstatement results, 210–211
auditing standards, 283–285, 287–293
Qualified opinion, 242
Random number tables. See Computer Assisted Audit Techniques (CAATs)
Ratio analysis, 167
Reasonableness testing, 168
Related party transactions (RPTs), 111–125
“Representative” sampling, 198–199
Rosenblum Inc. v. Adler, 31
Roussey notes, 7
RPTs. See Related party transactions
Rule 10b-5, 32
Rule 3502, 81
Rule 3521, 80
Rule 3522(b), 80
Rule 3522(a), 80
Rule 3523, 80
Rule 3524, 81
SAG. See Standing Advisory Group
Sarbanes Oxley Act (SOX), 2, 9, 27, 53–55, 66, 79, 84, 86, 89, 119, 150, 154, 220, 228–230, 279
Sarbanes, Paul, 53
SAS 510, 122
Scope, defined, 233
SEC. See Securities and Exchange Commission
Section 1.240.010, 68
Section 2, 51
Section 44, 40
Section 100.4, 64
Section 103, 84
Section 103(a), 79
Section 103(b), 79
Section 141, 40
Section 163, 45
Section 193, 45
Section 228.3, 38
Section 240, 90
Section 275, 38
Section 290.6, 67
Section 290.8, 67
Section 290.11, 69
Section 290.104, 67
Section 290.106, 68
Section 290.107, 68
Section 290.110, 69
Section 290.127, 69
Section 290.135, 70
Section 290.149, 72
Section 290.150, 69
Section 290.153, 71
Section 290.154, 71
Section 290.156, 71
Section 290.159, 72
Section 290.163, 78
Section 290.169, 73
Section 290.170, 74
Section 290.176, 74
Section 290.177, 75
Section 290.180, 75
Section 290.182, 75
Section 290.185, 75
Section 290.188, 77
Section 290.192, 77
Section 290.193, 76
Section 290.194, 76
Section 290.201, 78
Section 290.203, 78
Section 290.204, 78
Section 290.205, 79
Section 291, 64
Section 315, 129
Section 323, 42
Section 404, 55
Section 500, 21
Section 501, 21
Section 600, 21
Securities Act of 1933, 31, 33, 35
Securities and Exchange Commission (SEC), 4, 31, 32, 54, 66, 79, 85, 220, 229
Securities Exchange Act of 1934, 32, 35
Sound illustration, 131
SOX. See Sarbanes Oxley Act
Standard audit process model, 19–22
Standard unmodified opinion, 241–242
Standing Advisory Group (SAG), 85
Statutory Auditors’ Independence in the EU: A Set of Fundamental Principles, 66
Statutory liability, 28
Statutory representatives, 26
Substantive analytical procedures, 161
Substantive testing
audit evidence, evaluating sufficiency and appropriateness of, 188–190
for reducing risks of material misstatements, 181–183
Swedish Companies Act, 51
Tax shelters, 79
Tilimtarkastuslaki (TTL), 40
Tort Liability Act, 51
Treadway Commission (1987), 11
Trend analysis, 167
TTL. See Tilimtarkastuslaki
Ultramares Corporation v. Touche, 29
United States v. Natelli (1975), 33
United States v. Weiner (1975), 33
U.S. auditing standards/role of the PCAOB
Differences between GAAS and PCAOB Standards, 90
Differences between ISA and PCAOB Standards, 86–90
U.S. News and World Report, 134
U.S. stock exchange, 8
Walkthroughs, 100
Watchdogs, 6
Whole population selection, 194–195
Wisconsin Supreme Court, 31
Working papers. See also Audit documentation
content of, 216
uses of, 214
3.238.195.81