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.

Auditing in the Financial Services Sector

Auditing in the Financial Services Sector

Auditing in the financial services sector

The Background

The financial services sector has been dogged by company failures and unexpected losses in recent years: the collapses of Drexel Burnham Lambert and BCCI, the large losses and subsequent disappearance of Kidder Peabody, unexpected losses at Metalgesellschaft and Salomon Brothers, huge bad debts at Crédit Lyonnais and Deutsche Bank and, most recently, the failure of Barings and enormous losses at Daiwa Bank make it appear to be a very risky sector. In the UK alone, the Investors' Compensation Scheme has had to fund investors' losses on 182 failed investment firms between 1988 and 1995.

In all these crises, it has been tempting for those who have suffered loss to turn to the auditor for ...

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