Modern Auditing and Assurance Services

Preface xii
 
Abbreviations xviii
 
How to use this book xix
 
Acknowledgements xxii
 
part 1 THE AUDITING AND ASSURANCE ENVIRONMENT 2
 
1 An overview of auditing 4
 
2 Governance and the auditor 44
 
3 Professional ethics, independence and audit quality 94
 
4 Other assurance engagements and quality standards 162
 
5 The auditor's legal liability 202
 
part 2 AUDIT PLANNING 246
 
6 Overview of the audit of financial reports 248
 
7 The auditor's report 280
 
8 Client evaluation and planning the audit 314
 
9 Audit risk assessment 366
 
10 Materiality and audit evidence 414
 
part 3 AUDIT TESTING METHODOLOGY 452
 
11 Tests of controls 454
 
12 Designing substantive procedures 488
 
13 Audit sampling 526
 
part 4 AUDITING TRANSACTIONS AND BALANCES 566
 
14 Auditing sales and receivables 568
 
15 Auditing purchases, payables and payroll 618
 
16 Auditing inventories and property, plant and equipment 664
 
17 Auditing cash and investments 708
 
part 5 COMPLETING THE AUDIT 756
 
18 Completing the audit 758
 

Glossary 801
 
Index 811

Philomena Leung is Professor and Head of the Department of Accounting and Corporate Governance at Macquarie University, Sydney. She has had extensive teaching experience at tertiary and postgraduate levels for over 30 years, specialising in auditing, ethics and corporate governance. Prior to undertaking the role at Macquarie University, Philomena held senior academic positions at Hong Kong Polytechnic University and in Australia at Victoria University, RMIT University and Deakin University. Her PhD in accounting ethics and her KPMG auditing experience from Hong Kong provide an insight into issues relevant to the accounting and auditing profession. Philomena has written for a number of academic and professional journals in the areas of auditing, corporate governance, ethics, internal auditing and accounting education. She has received a number of research grants and has led and co-authored many research projects in the areas of ethics education, internal auditing and professional issues. Philomena has spoken at many conferences and seminars and is a soughtafter speaker for national and international forums and media interviews. She is actively involved in the auditing profession, bridging between academia and practice. Philomena believes in supporting the development and reshaping of the profession in Australia and internationally.
 
Paul Coram is Professor of Accounting and Head of the School of Accounting and Finance at the University of Adelaide. Paul has a Masters in Accounting from the University of Western Australia and a PhD from the Australian National University. He worked as an auditor and became a Chartered Accountant with one of the Big Four firms in Australia, also gaining work experience as an auditor in London. He is actively involved with the Institute of Chartered Accountants and has been a member for over 20 years. Paul has postgraduate qualifications in education and was the inaugural winner of the Pearson Education Accounting Lecturer of