The Third Edition of this successful text includes extensive changes, based on feedback from students and lecturers. There is a discussion of auditing and the law beyond the issue of third-party liability; and more coverage of recent developments in audit methodologies and techniques. New chapters include a survey of developments in audit automation, a discussion of the nature and development of the audit market, both in the United Kingdom and the European Union, and an assessment of the impact on auditing of the Cadbury Report on corporate governance, with particular attention to the role of audit committees. Each chapter includes questions for discussion.
Auditors tell each other that an audit report indicates that they have obtained reasonable, though not absolute, assurance that the financial statements are free of a material mis-statement and, further, that the level of reasonable assurance must depend on the preceived risk of the hypothetical mis-statement in question. It would seem useful to inform the readers of this interpretation.
Anderson (1977) is typical of many who have supported an approach to audit reporting which is informative of what an audit involves and what an audit opinion really means. Given the overriding requirement for informative reporting, this chapter explores the fundamental questions: what the audit report should say and how it should say it. In particular, the chapter identifies ten ...