• Up-to-date actual company examples: The authors have gone to great lengths to incorporate excerpts from annual reports, articles from the business and popular press, and other citations of financial reporting and auditing stories in the media. Some of the companies referenced in the text include: AOL TimeWarner, Bristol-Myers Squibb, Compaq Computer, Disney, Dynegy, Hewlett-Packard, Wal-Mart, Xerox, Wilson Sporting Goods, WorldCom, Reebok, Enron, Sunbeam, Waste Management, Arthur Andersen, Polaroid, U-Haul Corporation, Pricline.com, Amazon.com, Cisco Systems, Continental Airlines, H.J. Heinz, and Citibank.
• Visual graphics to aid student understanding
• Realistic audit programs and working papers.
• Inclusion of simulations in end of chapter material which mimic new CPA Exam questions
• End-of-chapter glossaries of key terms for quick and convenient review by students
• Text covers relevant issues facing the auditing profession, including the creation of the Public Companies Accounting Oversight Board, the passage of the Sarbanes-Oxley Act, and all of the major pronouncements and exposure drafts issued by the AICPA through Summer 2003.
• Cycle Chapters: Discussion of specific inherent risks for each cycle of audit process and concluding examples of how the audit risk model would be used for each cycle.

CHAPTER 1 Auditing and Assurance Services

• Coverage of assurance services.
• Discussion of the Sarbanes-Oxley Act of 2002 and the creation of the Public Companies Accounting Oversight Board (PCAOB)

CHAPTER 2 Professional Standards

• Chapter introduction covers the McKesson & Robbins fraud that lead to the creation of generally accepted auditing standards.
• Integration of generally accepted auditing standards (GAAS) into the phases of the audit.
• Discussion of the PCAOB and its standard-setting and monitoring roles

CHAPTER 3 Management Fraud and Audit Risk

• Chapter introduction discusses the Enron—Andersen audit and its consequences on companies, their employees, and their recent hires.
• Coverage includes SAS 99 with emphasis on management fraud.

CHAPTER 4 Engagement Planning

• Chapter introduction discusses Andersen’s planning of the Enron engagement.
• Chapter also focuses on auditing in an electronic environment with emphasis on the use of Computer Assisted Audit Tools and Techniques (CAATTs).

CHAPTER 5 Internal Control Evaluation: Assessing Control Risk

• Chapter includes discussion of Enron’s control environment.
• Business process measurement and risk based auditing is also covered.
• Chapter also introduces the Committee of Sponsoring Organizations’ (COSO) new Enterprise Risk Model (ERM).

CHAPTER 6 Employee Fraud and the Audit of Cash

• More coverage of SAS 99, with emphasis on employee fraud
• Real world examples of employee fraud include a copy of an actual altered bank statement.
• Audit of cash included here as the first example of substantive testing.

CHAPTER 7 Revenue and Collection Cycle

• Focus on revenue recognition and SAB 101.
• Detailed discussion of the MiniScribe fraud
• Detailed discussion of applying the audit risk model to the revenue cycle
• Summary of revenue-related restatement reported by the GAO called "Rogues of Revenue Recognition."
• Brief discussion of applying controls in a small business
• List of common responses to confirmations, and what they mean to an auditor.
• Steps for review of collectibility.
• Sales cutoff procedures

CHAPTER 8 Acquisition and Expenditure Cycle

• Brief discussion of the WorldCom Case
• Summary of cost and expense-related restatements from the GAO report.

CHAPTER 9 Production and Payroll Cycle

• Extensive discussion of the Phar-Mor fraud
• Real case example of gross margin manipulation.
• Consolidated inventory testing in one chapter.
• Detailed example of cutoff error
• Enhanced discussion of pricing and compilation testing.
• Discussion of Cisco Systems inventory write-down

CHAPTER 10 Finance and Investment Cycle

• Discussion of Enron’s use of SPEs
• Brief examples of synthetic leases
• Examples of effects of goodwill impairment charges
• Realistic example program for long term debt and interest expense
• Discussion of Auditing Fair Value Measurements (SAS 101)

CHAPTER 11 Completing the Audit

• Overview of major events performed in completing the audit examination.
• Examples of subsequent events and dual-dating of audit reports from actual corporate disclosures.
• Summary of major communications between the auditor, client, and client’s audit committee
• Example of issues arising from KPMG’s audit of Xerox regarding internal control deficiencies
• Withdrawal of Andersen’s audit opinion on the financial statements of Dynegy, Inc.

CHAPTER 12 Reports on Audited Financial Statements

• Report decision trees
• Actual reports as illustrations for the different types of reports issued.

MODULE A Assurance and Other Public Accounting Services

• Latest changes to assurance service engagements.
• In-depth discussion of attestation engagements other than audit engagements
• Auditors’ responsibilities for interim financial information
• Discussion of Other Comprehensive Basis of Accounting
• Discussion of auditors’ responsibilities when client utilizes a service organization

MODULE B Professional Ethics

• Latest changes to the ethics standards.

MODULE C Legal Liability

• Recent cases in liability areas.
• Impact of Sarbanes-Oxley on auditors’ legal liability

MODULE D Internal, Governmental, and Fraud Audits

• Discussion of internal audit and government audit as elements of the audit profession.
• Discussion of fraud auditing as an element of the audit profession

MODULE E An Overview of Sampling; MODULE F Attribute Sampling; MODULE G Variables Sampling

• The discussion of sampling is presented in three modules that can be incorporated at any point throughout the course for maximum instructor flexibility. In addition, each sampling module is completely stand-alone and can be used without reference to any of the remaining modules. This feature allows the instructor to include as much or as little sampling in his or her courses as desired.
• An introductory sampling module that illustrates the basic sampling process in a nonaudit context is included to allow students to focus on issues related to sampling without mastering all of the technical aspects of sampling. In addition, this introductory module briefly discusses the application of sampling to the auditor’s study and evaluation of internal control and substantive procedures. This module is ideal for the instructor who wishes to provide coverage of sampling in preparation for the Uniform CPA Examination without spending excessive time on this subject.
• Modules on attribute and variables sampling focus on a step-by-step application of sampling concepts and techniques through the use of a comprehensive problem. The use of a single, comprehensive example allows students to see theoretical concepts applied to a real world example.

MODULE H Information Systems Auditing

• Includes advances in audit technology.