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.

Changes in the Legal Environment

Changes in the Legal Environment

Changes in the legal environment


The legal environment within which auditors work is one which evolves and develops over time. In recent years in the UK changes have been introduced by statute but there has also developed a significant body of case law focusing on the common law duties of the auditor in contract and in tort. This chapter provides a brief overview of relevant statutory change but focuses primarily on this body of case law and on the manner in which it adds to our knowledge of what are appropriate auditing standards and to whom, and in what circumstances, a duty of care is owed. Particular attention is paid to two important recent cases – ADT v. BDO and Hughes ...

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