Skip to main content

Modern Auditing and Assurance Services, 6th Edition

Modern Auditing and Assurance Services, 6th Edition

Philomena Leung, Paul Coram, Barry J. Cooper, Peter Richardson

ISBN: 978-1-118-61524-9

Sep 2014

856 pages

Select type: Paperback

Product not available for purchase


Modern Auditing & Assurance Services, 6th edition, is written for courses in auditing and assurance at undergraduate, postgraduate and professional levels. The practice of auditing is explained in the context of auditing theory, concepts and current practice, with appropriate reference to the Australian auditing standards and the respective international standards on auditing.

Auditors play a vital role in the current economic environment, with increasing responsibility for ensuring market integrity. The development of auditing practice reflects how the accounting profession responds to the complex demands of information, competition, corporate failures and technology. Auditing continues to evolve in response to the changing business and regulatory landscape to maintain its relevance and importance. This book is a comprehensive guide to the development and practice of audits of a financial report, with an authoritative insight into the fundamental role of auditors, the influences on audits, and related issues.

Related Resources


View Instructor Companion Site

Contact your Rep for all inquiries

Preface xii

Abbreviations xviii

How to use this book xix

Acknowledgements xxii


1 An overview of auditing 4

2 Governance and the auditor 44

3 Professional ethics, independence and audit quality 94

4 Other assurance engagements and quality standards 162

5 The auditor’s legal liability 202


6 Overview of the audit of financial reports 248

7 The auditor’s report 280

8 Client evaluation and planning the audit 314

9 Audit risk assessment 366

10 Materiality and audit evidence 414


11 Tests of controls 454

12 Designing substantive procedures 488

13 Audit sampling 526


14 Auditing sales and receivables 568

15 Auditing purchases, payables and payroll 618

16 Auditing inventories and property, plant and equipment 664

17 Auditing cash and investments 708


18 Completing the audit 758

Glossary 801

Index 811

  • Audit Quality — readers will appreciate that audit quality is a concept that underpins most of this text. Audit quality is discussed in chapters 3 and 4 and is referred to throughout the text.
  • The role, purpose and the market for the audit profession — this topic is referred to in chapters 1 and 2, as the global audit profession critically re-evaluates the effectiveness of the audit market and its regulation.
  • Ethics and corporate governance — professional ethics as defined in detail in APES 110 has reinforced the concept of the public interest. Discussions on professional ethics and the related topic of corporate governance are paramount to auditing and assurance services. The latest ASX corporate governance principles, the overriding principle of the public interest, and the requirements for the auditor to be proactive in dealing with auditing issues by meeting with the audit committee members, are discussed in chapters 1, 3 and 18.
  • Scepticism — the importance of the attribute of scepticism to auditors’ judgements has increased significantly in recent years. More consideration of this attribute in planning and evaluation of evidence are included in chapters 8 and 10.
  • Internal controls — COSO produced a new framework on internal control in 2013 and relevant changes from this new framework have been included in chapters 9 and 11.
  • Latest developments in regulatory regimes and audit expectations — this text is deliberate in providing a well-rounded view of what the auditors do, in addition to performing the technical functions. The expectations of the auditors in relation to the aftermath of the global financial crisis, and the latest legal and regulatory changes such as those provided in the competition and consumer laws, are discussed in chapter 5.
  • Audit reporting — the auditing profession has more recently re-examined the nature and extent of the audit report, and the language and presentation of the audit report to members. The topic of completing the audit is discussed in chapter 18, with details of means to communicate audit findings to various stakeholders. The key changes in the chapter include the explanation on matters relating to the going concern of the audit client. The IAASB has proposed to significantly reform the content of a standard audit report. This is contained in its 2013 Exposure Draft Reporting on Audited Financial Statements: Proposed New and Revised International Standards on Auditing. Chapter 7 on the auditor’s report contains an extensive Professional Environment which outlines the main changes that are proposed in the ED. However, as a new standard is not planned to be released until late 2014 (after publication of this text) we could not include these changes in the main body of the chapter.
  • Professional environment vignettes have been revised and updated throughout the text. These chapter vignettes present relevant, topical audit issues and/or events that relate the audit processes presented in the chapter to the business world.
  • There has been a major revision to the end of chapter materials. In making these changes we have also utilised recent materials from the Institute of Chartered Accountants in Australia and the Association of Chartered Certified Accountants — we thank both of these organisations for their support.
  • Chapter openers. The chapter openers present a summarised account of the main elements in each chapter, the learning outcomes and the relevant professional statements, thus providing readers with a broad contextual base from which to approach each chapter. Each chapter contains an easy-to-read scene setter that provides a lively ‘entrée’ to the topic. Lecturers can use these scene setters to provoke class debate.
  • Learning objectives. The learning objectives are linked to the relevant section of the text by the restatement of the objective in the margin.
  • Learning checks. The learning checks are presented in a number of blocks in each chapter, summarising the major points covered. These checks reinforce student learning and provide a basis for revision.