审计学：一种整合方法（英文版·第17版）（工商管理经典丛书·会计与财务系列；高等学校经济管理类双语教学课程用书）

作者：阿尔文·阿伦斯 兰德尔·埃尔德 马克·比斯

书号：336244

定价：￥148 元

字数：1088 千字

印次：1-1

开本：大16

出版时间：2025-03-05

ISBN：978-7-300-33624-4

包装：平

内容简介

本书是美国经典的现代审计学教学用书之一，被公认为系统学习和全面掌握现代西方特别是美国审计理论和实务的首选书籍，被全球多所著名大学采用。本书因首次提出并倡导交易循环审计思想而备受审计理论界、教育界和实务界的推崇。在我国，已故著名会计学家杨时展先生对本书给予高度重视，积极推介和使用，并组织了最初的引介和翻译工作。

本书第17版的特色包括：

·提供与审计报告相关的政策文件；

·介绍从审计计划到完成的过程中，审计数据分析和相关技术是如何使用的；

·通过“数据分析”专栏突出审计人员使用审计数据分析来进行各种测试的不同方式；

·通过课后练习强化学生的批判性思维和研究技能；

·为帮助审计人员保持适当的职业怀疑，突出审计人员在专业判断过程中的关键要素；

·强调国际化问题。

作者介绍

主要作者简介

阿尔文？阿伦斯（Alvin A. Arens） 美国密歇根州立大学会计学院普华永道审计学教授，曾担任美国会计学会（AAA）主席、美国注册会计师协会（AICPA）审计准则委员会（ASB）专家委员。拥有丰富的大学审计教学和注册会计师执业经验，获得多项殊荣，包括AAA杰出审计教育家奖、AICPA杰出教育家奖、美国贝塔阿尔法教授年度奖等。

改编者简介

李璐 中南财经政法大学会计学院教授、博士生导师。中国注册会计师（CPA）、英国特许公认会计师（ACCA），拥有法律职业资格证书。湖北省首批会计领军人才，财政部国际化高端会计人才。中国注册会计师协会访问研究员、专家，国家社会科学基金成果评审专家，湖北省社科专家库成员，湖北省审计学会副秘书长，湖北省审计专业高级职务评审委员会专家。

张龙平 中南财经政法大学会计学院教授、博士生导师。国务院学位委员会第六、七届工商管理学科评议组成员，中国会计学会副会长，中国审计学会常务理事，中国注册会计师协会审计准则委员会委员，全国首届审计专业学位研究生教育指导委员会委员，教育部高等学校会计学专业教学指导委员会委员。享受国务院政府特殊津贴专家，财政部首批会计名家，首届高等学校“青年教师奖”获得者。

目 录

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 6 Assurance Services

Types of Audits 11 Types of Auditors 13 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

Legal Environment for CPAs

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 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

Use of Data Analytics and Other Advanced Technologies

Common Financial Ratios

Audit Documentation

Contents and Organization

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

PART3 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 TRANSACTIONS LEARNING OBJECTIVES

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 Statistical 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 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 20 AUDIT OF THE INVENTORY AND WAREHOUSING 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 21 AUDIT OF THE CAPITAL ACQUISITION AND.REPAYMENT CYCLE

Accounts in the Cycle

Notes Payable

Owners’ Equity

CHAPTER 22 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 23 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

精彩样章

The primary emphasis in this text is on the auditor’s decision-making process in a financial statement audit, as well as an integrated audit of both financial statements and internal control over financial reporting required for accelerated filer public companies. We believe that the most fundamental concepts in auditing concern deter-mining the nature and amount of evidence the auditor should gather after consider-ing the unique circumstances of each engagement. If students of auditing understand the objectives to be accomplished in a given audit area, the risks related to the engage-ment, and the decisions to be made, they should be able to determine the appropriate evidence to gather and how to evaluate the evidence obtained.

New auditing standards are released without regard to textbook revision cycles. As auditing instructors, we appreciate how critical it is to have the most current con-tent available. This edition includes guidance in the recently issued SAS No. 133, An Auditor Involvement with Exempt Offering Documents, and PCAOB standards, including the new standard auditor’s report contained in AS 3101, The Auditor’s Report on an Audit of Financial Statements When the Auditor Expresses an Unqualified Opinion and Related Amendments to PCAOB Standards. In addition, we have included coverage of the AICPA’s Auditing Standards Board pending revision of the auditor’s standard unmodified opinion audit report so that our coverage of audit reports is up to date (as discussed further below). It is important to note that as part of this project, the AICPA also revised the management assertions. The changes to the assertions are reflected throughout the text.

Now that the AICPA has completed its Clarity Project for auditing, attestation, and accounting and review services engagements, all chapters of the textbook reflect the various revisions resulting from the issuance of the Clarity standards, including coverage up through the issuance of SSARS No. 23, Omnibus Statement on Standards for Accounting and Review Services—2016 and SSAE No. 18, Attestation Standards: Clarification and Recodification. We are committed to continually providing you with up-to-date content in this dynamic global auditing environment and will keep you updated with highlights posted on our website of major changes in new standards as they are issued.

Both the AICPA’s Auditing Standards Board (ASB) and the PCAOB have recently revised guidance related to auditor reporting to make the audit report more infor-mative to users. These changes significantly changed the format and length of con-tent included in the auditor’s report. Most notably, auditors of public companies must include in the auditor’s standard unmodified opinion report disclosure of “critical audit matters” (CAMs), which represent issues that involved especially challenging, subjective, or complex auditor judgment and how the auditor addressed those mat-ters. While auditors of nonpublic entities are not required to include those disclosures,

the new audit reporting standard proposed by the ASB provides reporting guidance for auditors who are engaged to communicate “key audit matters” (KAMs), which are similar in nature to CAMs in the PCAOB guidance. Chapter 3 provides extensive coverage of these new auditor report guidelines, including a number of illustrations of auditor reports for different engagement circumstances.

The Internet and extensive use of technologies and automation by entities to engage in all types of business transactions and services have dramatically increased the amount of data available for analysis. The audit profession is rapidly exploring how audit data analytics (ADAs) and advanced technologies might allow them to increase both audit quality and efficiency. The 17th edition of this textbook includes new coverage of how ADAs are being used in all phases of the audit, spanning from initial planning through the completion of the audit.

We provide an extensive introduction to ADAs in Chapter 7, including cover-age of best practices related to accessing and preparing the data, evaluating the rel-evance and reliability of that data, addressing large numbers of exceptions for further consideration, and documenting the use of ADAs. We also include coverage of differ-ent types of advanced technologies, including artificial intelligence, robotics, machine learning, and deep learning. Additionally, many of the remaining chapters of the text-book include callout “Data Analytics” boxes that highlight different ways auditors are using ADAs in the various financial statement cycles to perform tests of controls, sub-stantive tests of transactions, substantive analytical procedures, and tests of details. These callout boxes help students see how ADAs are transforming the nature, timing, and extent of audit procedures in all aspects of the audit.

To provide students hands-on experience in using various data analytics tools, we have developed an entirely new dataset that includes different files of transaction data related to the sales and collection cycle for a hypothetical company, JA Tire Manufacturing. This dataset, which students can access from the textbook website, includes different sub-files that contain transaction data related to JA Tire Manufacturing’s sales orders, bills of lading, invoices, cash receipts, customer master file, and product master file (an excerpt of a summary of the sub-files is shown below). We have developed several new home-work problems included in different chapters that require students to analyze data in the various sub-files of the dataset for JA Tire Manufacturing. Because the dataset is in Excel, the new homework problems allow students to use any software, such as ACL, Excel, IDEA, or Tableau, to conduct their data analysis. Thus, instructors have the flexibility to choose which software tool they would like students to use to perform the analyses. These problems are indicated by a data analytics icon in the margin next to the problem.

In addition to the new homework problems using the dataset of JA Tire Manufacturing, we have also included a number of other problems in the text that can be completed using Excel templates that are available on the text website. These problems are indi-cated by a spreadsheet icon in the margin next to the problem. In addition, we have included selected problems using ACL in several chapters in the text, indicated with a data analytics icon. These problems are related to the topic of the chapter so that students can see how audit software is used to perform specific types of audit tests. Guidance for students on the use of ACL is included on the text website.

Critical thinking and research skills are becoming increasingly important for stu-dents as they enter the accounting profession. To help students further develop those skills, we have continued our inclusion of homework problems in the 17th edition that require students to conduct Internet-based research to address various audit issues. Some of those research problems have students work with actual SEC filings by com-panies, which expose students to relevant examples of audit-related decisions. Other problems require students to conduct research of auditing standards to determine the relevant guidance applicable to a given audit issue.

With the profession’s continued focus on the importance of applying appropriate lev-els of professional skepticism, we have continued our coverage of this topic in Chapter 6, along with integrated coverage in later chapters, including Chapter 10, which addresses the auditor’s responsibilities for detecting fraud. We discuss the impor-tance of a questioning mindset and the need to critically evaluate audit evidence to strengthen student awareness of the elements of effective professional skepticism.

To assist auditors with maintaining an appropriate level of professional skepticism when making professional judgments during an audit, this edition features the Center for Audit Quality’s Professional Judgment Resource, which outlines key elements of a pro-cess that auditors apply when making professional judgments. Chapter 6 illustrates an effective decision-making process that guides auditors’ thinking to help them be aware of their own judgment tendencies, traps, and biases. We include several homework problems that expose students to this judgment framework and a number of the com-mon traps and biases.

The requirements of the Sarbanes–Oxley Act of 2002 and the PCAOB Auditing Standard 5 (now AS 2201) that impact accelerated filer public companies are inte-grated throughout the text and so are the risk assessment standards issued by the Auditing Standards Board. Chapter 2 emphasizes the importance of understand-ing the client’s business and its environment, including internal control. Chapter 3

highlights reporting on internal controls over financial reporting for auditors of accel-erated filer public companies.

We have always emphasized understanding the client’s business and industry in planning. Chapters 8–12 include coverage of the auditor’s performance of risk assess-ment procedures, including the identification of significant risks. Chapter 9 addresses the performance of risk assessment procedures to address the risk of material mis-statement, followed in Chapter 10 with discussion of assessing and responding to the risk of fraud.

Our coverage in Chapters 11 and 12 of internal controls, including coverage of IT general and application controls, reflects key elements of COSO’s 2013 revision of.its Internal Control—Integrated Framework and integrates the auditor’s consideration of both manual and automated controls. Chapter 11 introduces students to important ele-ments of effective internal controls, including those related to IT, while Chapter 12 outlines the auditor’s responsibilities to understand the design and operating effec-tiveness of internal control and also highlights auditor reports on internal control over financial reporting. Subsequent chapters that focus on the transaction cycles include extensive coverage of internal controls to help students understand how the auditor’s consideration of internal controls is integrated for audits of the financial statements and internal controls over financial reporting.

Chapter 1 introduces the importance of considering international auditing standards developments, followed by discussion in Chapter 2 about the role of the International Auditing and Assurance Standards Board (IAASB) in the issuance of International Standards on Auditing (ISAs) and the Auditing Standards Board’s efforts to converge

U.S. standards to international standards. Chapter 3 highlights implications for audi-tor reports on companies reporting under International Financial Reporting Standards (IFRS). Several chapters throughout the book include text or mid-chapter vignette cov-erage of international issues, and international issues are also addressed in homework problems.

With the increasing volume and complexity of various types of financial instruments and challenges associated with fair value accounting, Chapter 22 addresses issues associated with auditing financial instruments and obtaining sufficient appropri-ate audit evidence for fair value account estimates. We believe this guidance will help strengthen students’ understanding of the challenges associated with auditing finan-cial instruments.

With more organizations taking advantage of cloud computing options and third-party IT service providers, there is a greater need for information about the design and operating effectiveness of internal controls provided by these external service providers. This 17th edition contains coverage of service organization control (SOC) reports issued by service center auditors. Chapter 12 reflects the guidance for service auditors reporting on internal controls at service organizations, including coverage of the different types of reports provided in SOC 1, SOC 2, and SOC 3 engagements.

To help students connect the important auditing concepts to real-world situations, each chapter begins with an opening vignette that illustrates practice issues relevant to that chapter’s content, and each chapter includes several short vignettes spread throughout the content of that chapter. Many of these vignettes have been updated to reflect recent real-world events to help students understand the significance of the content covered.

Concept Checks, introduced in the 16th edition, appear periodically within each chapter and highlight short-answer questions to help students recap content covered within different sections of the chapter. These short in-chapter review questions are intended to help call students’ attention to key concepts as they read the material in the chapter.

The annual report for the Hillsburg Hardware Company is included as an insert to the text. Financial statements and other information included in the annual report are used in examples throughout the text to illustrate chapter concepts. The annual report also includes management’s report on internal control as required by the Sarbanes– Oxley Act Section 404a and the auditor’s report required by Section 404b, consistent with PCAOB auditing standards.

The Pinnacle Manufacturing integrated case is based on a large, multi-division com-pany. The case has been revised based on new financial statement data, and it consists of seven parts distributed at the end of each respectively relevant chapter. Each part of the case is designed to give students hands-on experience, and the parts of the case are connected so that students will gain a better understanding of how the parts of the audit are integrated by the audit process.

Auditing and Assurance Services: An Integrated Approach is an introduction to auditing and other assurance services. It is intended for either a one-quarter or one-semester course at the undergraduate or graduate level. This book is also appropriate for introductory professional development courses for CPA firms, internal auditors, and government auditors.

As the title of this book reflects, our purpose is to integrate the most important internationally recognized concepts of auditing in a logical manner to assist stu-dents in understanding audit decision making and evidence accumulation in today’s complex, global auditing environment. For example, developments related to issues affecting auditing in a global and economically volatile environment are described throughout the book and are emphasized in selected mid-chapter vignettes and homework problems. Key concepts related to risk assessment as emphasized in stan-dards issued by the Auditing Standards Board (ASB), the International Auditing and Assurance Standards Board (IAASB), and the Public Company Accounting Oversight Board (PCAOB), including emphasis on significant risks, are integrated into all of the planning chapters, as well as each chapter dealing with a particular transaction cycle and related accounts.

Our coverage of internal control is related to tests of controls and substantive tests of transactions that are performed in a financial statement audit and an inte-grated audit of financial statements and internal control over financial reporting, with an emphasis on the requirements of PCAOB auditing standards. Tests of con-trols and substantive tests of transactions are, in turn, related to the tests of details of financial statement balances for the area. Audit sampling is applied to the eval-uation of audit evidence rather than treated as a separate topic. Risk assessment, technology, fraud, and auditing of internal control issues are integrated throughout the chapters.

We believe that the most fundamental concepts in auditing concern deter-mining the nature and amount of evidence the auditor should gather after con-sidering the unique circumstances of each engagement. If students of auditing understand the objectives to be accomplished in a given audit area, the risks related to the engagement, and the decisions to be made, they should be able to determine the appropriate evidence to gather and how to evaluate the evidence obtained.

Our objective is to provide up-to-date coverage of globally recognized auditing concepts with practical examples of the implementation of those concepts in real-world settings. The collective experience of the author team in the practice of audit-ing is extensive. We have all worked in the auditing profession involving both large international audit firms and regional firms. Members of our author team have taught extensively in continuing education for either large international or small CPA firms and have been involved in standards setting activities of the Auditing Standards Board and the PCAOB. One author served over seven years as one of the board members of the Committee of Sponsoring Organizations of the Treadway Commission (COSO). These experiences provide unique perspectives about the integration of auditing con-cepts in real-world settings.

The text is divided into six parts. The chapters are relatively brief and designed to be easily read and comprehended by students.

Part 1, The Auditing Profession (Chapters 1–5) The book begins with an opening vignette, featuring a Big 4 public accounting firm’s assurance report contained in the Corporate Sustainability Report issued by United Parcel Service (UPS), to help students see the increasingly important role of auditors in providing assur-ance on a broad range of information important to key stakeholders. Chapter.1 intro-duces key provisions of the Sarbanes–Oxley Act, including the creation of the PCAOB and Section 404 internal control reporting requirements. Chapter 2 covers the CPA profession, with particular emphasis on the standards setting responsibilities of the International Auditing and Assurance Standards Board (IAASB) and the PCAOB and how those responsibilities differ from those of the AICPA Auditing Standards Board (ASB). Chapter 3 provides a detailed discussion of the newly revised audit reports issued under AICPA and PCAOB standards, including communications in the audit report about critical audit matters or key audit matters. Chapter 3 also includes a sepa-rate section on the report on internal control over financial reporting for an acceler-ated filer public company. The chapter also emphasizes conditions affecting the type of report the auditor must issue and the type of audit report applicable to each con-dition under varying levels of materiality. Chapter 4 explains ethical dilemmas, pro-fessional ethics, and independence, and it features the recently revised AICPA Code of Professional Conduct. Chapter 5 ends this part with an investigation of auditors’ legal liability.

Part 2, The Audit Process (Chapters 6–13) The first two of these chapters deal with auditor and management responsibilities, professional skepticism, a pro-fessional judgment framework for auditor decision-making, audit objectives, general concepts of evidence accumulation, and audit documentation, including the manage-ment assertions and evidence concepts in the risk assessment standards. Chapter.7 includes extensive coverage of the growing use of audit data analytics (ADAs) and provides best practice guidance to help auditors prepare data for analysis. Chapter 8 deals with planning the engagement, including understanding the company’s busi-ness and its industry as part of the auditor’s risk assessment procedures, using analyti-cal procedures as an audit tool, and making preliminary judgments about materiality. Chapter.9 provides expanded coverage of the auditor’s performance of risk assess-ment procedures used to assess the risk of material misstatement due to fraud or error and how the auditor responds to risks of significant misstatement with further audit procedures. Fraud auditing is the focus of Chapter 10, which builds upon risk assessment concepts covered in the previous chapter to illustrate how risk assess-ment includes the assessment of fraud risk. The chapter also includes specific exam-ples of fraud and discusses warning signs and procedures performed in response to heightened fraud risk. Chapter 11 outlines the key components of an effective sys-tem of internal controls over financial reporting, consistent with the 2013 revision of COSO’s Internal Control—Integrated Framework. Because most internal control systems are heavily dependent on information technologies, this chapter integrates coverage of IT general controls and application controls. Chapter 12 shows how effective inter-nal controls can reduce planned audit evidence in the audit of financial statements, and it outlines procedures auditors perform as tests of those controls to support a low control risk assessment. The chapter also describes how auditors of accelerated filer public companies integrate evidence to provide a basis for their report on the effec-tiveness of internal control over financial reporting with the assessment of control risk in the financial statement audit. Chapter 13 summarizes Chapters 6 through 12 and integrates them with the remainder of the text. Several of these chapters include Data Analytics callout boxes that highlight how auditors are incorporating ADAs in all aspects of the audit.

Part 3, Application of the Audit Process to the Sales and Collection Cycle (Chapters 14–17) These chapters apply the concepts from Part 2 to the audit of sales, cash receipts, and the related income statement and balance sheet accounts. The appropriate audit procedures for accounts in the sales and collection cycle are related to internal control and audit objectives for tests of controls, substantive tests of transactions, and tests of details of balances in the context of both the audit of finan-cial statements and the audit of internal control over financial reporting.

Students also learn to apply audit sampling to the audit of sales, cash receipts, and accounts receivable. Chapter 15 begins with a general discussion of audit sampling for tests of controls and substantive tests of transactions. Similarly, Chapter 17 begins with general sampling concepts for tests of details of balances. The next topic in each chapter is extensive coverage of nonstatistical sampling. The last part of each chapter covers statistical sampling techniques. Several data analytics examples are included in the Data Analytics callout boxes in these chapters.

Part 4, Application of the Audit Process to Other Cycles (Chapters 18–22)

Each of these chapters deals with a specific transaction cycle or part of a transaction cycle in much the same manner as Chapters 14 through 17 cover the sales and col-lection cycle. Each chapter in Part 4 demonstrates the relationship of internal con-trols, tests of controls, and substantive tests of transactions for each broad category of transactions to the related balance sheet and income statement accounts. We integrate discussion of implications related to the audit of internal control throughout all these transaction cycle chapters. Cash and financial instruments are studied late in the text to demonstrate how the audit of cash and financial instrument balances is related to most other audit areas.

Part 5, Completing the Audit (Chapter 23) This part includes only one chap-ter, which deals with performing additional tests to address presentation and disclo-sure objectives, summarizing all audit tests, reviewing audit documentation, obtaining management representations in an integrated audit of financial statements and inter-nal control, evaluating going concern, communicating with those charged with gover-nance, and all other aspects of completing an audit.