The inclusion of the newly released AS5 Auditing Standard makes this text the most up to date auditing text on the market. It’s been written so that it is current with all issues inherent in accounting and auditing practice, particularly in public accounting firms including coverage of the creation of the Public Companies Accounting Oversight Board, the passage of the Sarbanes-Oxley Act, and all of the major pronouncements issued by the AICPA. It’s also a leader in fraud coverage and is accompanied by the Apollo Shoes Casebook, the only standalone FRAUD audit case on the market (available online on the book’s website). The text is also designed to provide flexibility for instructors; the twelve chapters focus on the auditing process while the eight modules provide additional topics that can be taught at the instructor’s discretion without interrupting the flow of the text.

New Features

• The text has been revised around the newly released AS5 Auditing Standard. The new standard replaces Auditing Standard No. 2 (PCAOB 2004) and all related internal control audit guidance that had previously been issued by the PCAOB. The new standard makes significant changes to the way auditors audit internal control. The AS5 material is integrated throughout the text.
• Two new Comprehensive Cases have been added: “GE: How Much are Auditors Paid?” and “To Indemnify or Not to Indemnify—That is the Question.” All cases have now been moved to the back of the book, and questions related to all cases are now included in select chapters.
• All chapters and modules in the third edition have been revised to incorporate professional standards through SAS 114, and the international standards of auditing (ISAs).
• ACL software has been added to 3e so students can benefit from the kind of cutting-edge software they’ll use the first day on the job. Exercises to accompany ACL are included on the book’s OLC.

Retained Features

• New text discussion of companies with which students are familiar, including Martha Stewart Living Omnimedia, TimeWarner (AOL Time Warner), Disney, Wal-Mart, and many others.
• Fraud awareness emphasis throughout text by inclusion of real-world examples in EACH chapter pulled from recent headlines—including companies such as Phar-Mor, Enron, Critical Path, World Com.
• An updated summary of recent major financial statement restatements, sentencing of key executives, and the effects of Sarbanes-Oxley due to fraud or inappropriate accounting.
• Fraud awareness emphasis through 3 specific chapters/modules:
• Chapters 3: Management Fraud and Auditor Risk
• Chapter 6: Employee Fraud and the Audit of Cash
• Module D focuses on the Certified Fraud Exam
• Comprehensive case studies on HealthSouth, Parmalat, KPMG and Andersen that cover multiple chapter topics.
• Kaplan CPA audit simulations that allow students to go online and complete simulations similar to those in the new on-line CPA examination.
• Discussion of the creation of the Public Companies Accounting Oversight Board (PCAOB) and its standard-setting and monitoring roles including discussion of the passage of the Sarbanes-Oxley Act of 2002
• Three modules dedicated to sampling, providing the instructor with flexibility to use an overview chapter to introduce basic sampling concepts, or more detailed chapters illustrating applications. Integrated coverage of sampling to the audit process (through testing internal controls or conducting substantive tests).
• Integrates technology while students learn the audit process, including planning in an electronic environment, logical internal controls, and the use of Computer Assisted Audit Tools and Techniques (CAATTS) to gather evidence.
• End-of-chapter materials include electronic workpapers that send students to the text website to work problems that mimic those on the New Uniform CPA Exam.
• Integrated coverage of assurance services, reflecting the ever-expanding market for assurance services. Where applicable, each chapter discusses how the concepts and issues discussed in that chapter affect assurance engagements, recognizing the increasingly different and complex situations in which CPAs are requested to provide assurance on varying types of information.