Part 1 book “Auditing and assurance services - an integrated approach” has contents: The demand for audit and other assurance services, the cpa profession, audi treports, professional ethics, legal liability, audit responsibilities and objectives, audit evidence, and other contents. | Summary of the Audit Process PHASE I Plan and design an audit approach Accept client and perform initial audit planning Understand the client’s business and industry Perform preliminary analytical procedures Set preliminary judgment of materiality and performance materiality Identify significant risks due to fraud or error Assess inherent risk Understand internal control and assess control risk Finalize overall audit strategy and audit plan PHASE II Perform tests of controls and substantive tests of transactions Plan to reduce assessed level of control risk? No Yes Perform tests of controls* Perform substantive tests of transactions Assess likelihood of misstatements in financial statements PHASE III Perform substantive analytical procedures and tests of details of balances Low Medium High or unknown Perform substantive analytical procedures Perform tests of key items Perform additional tests of details of balances PHASE IV Complete the audit and issue an audit report Perform additional tests for presentation and disclosure Accumulate final evidence Evaluate results Issue audit report Communicate with audit committee and management * The extent of tests of controls is determined by planned reliance on controls. For public companies required to have an audit of internal control, testing must be sufficient to issue an opinion on internal control over financial reporting. Auditing And AssurAnce services An integrAted ApproACh sixteenth edition Alvin A. Arens Former PricewaterhouseCoopers Emeritus Professor Michigan State University rAndAl J. elder Syracuse University Professor MArk s. BeAsley North Carolina State University Deloitte Professor of Enterprise Risk Management Chris e. hogAn Michigan State University Professor Boston Columbus Indianapolis New York San Francisco Amsterdam Cape Town Dubai London Madrid Milan Munich Paris Montréal Toronto Delhi Mexico City São Paulo Sydney
