Paul M. Clikeman
Called to Account traces the evolution of the global public accounting profession through a series of scandals leading to voluntary or mandated reforms. Ever entertaining and educational, the book describes 16 of the most audacious accounting frauds of the last 80 years, and identifies the accounting standards and legislation adopted as a direct consequence of each scandal.
This third edition offers expanded coverage of the Global Financial Crisis and international auditing. While retaining favorite chapters exposing the schemes of "Crazy Eddie" Antar, "Chainsaw Al" Dunlap, and Barry "the Boy Wonder" Minkow, new chapters describe the accounting problems at Lehman Brothers, Colonial Bank, and Olympus. Students will learn that financial fraud is a global problem, and that accounting reform is heavily influenced by politics.
With discussion questions and a chart mapping each chapter to topics covered in popular auditing textbooks, Called to Account is the ideal companion for classes in auditing, fraud examination, advanced accounting, or professional responsibilities.
Joe B. Hoyle, Thomas F. Schaefer, and Timothy S. Doupnik
Fundamentals of Advanced Accounting, 7th edition, is ideal for those schools wanting to cover twelve chapters in their advanced accounting course. This concise text allows students to think critically about accounting, just as they will do preparing for the CPA exam. The text continues to show the development of financial reporting as a product of intense and considered debate that continues today and will into the future.
Effects of Auditor Type and Evidence Domain Type on the Influence of Irrelevant Internal Control Evidence and the Potential for Audit Failure
Internal control systems consist of two evidence domains, automated control evidence and manual process evidence. Auditors can possess knowledge and expertise in both internal control evidence domains. But, auditors tend to possess more knowledge and expertise in one internal control evidence domain than the other internal control evidence domain. Thus, auditors have superior domain knowledge in one of the internal control evidence domains.
Auditors at large accounting firms tend to specialize in the evidence domain of automated controls (information technology auditors or IT auditors) or manual processes (financial auditors). Audit Standard 5 requires IT auditors and financial auditors to gain an understanding of clients’ automated controls and manual processes in order to integrate key client activities with the dollar amounts reported on the financial statements. While investigating controls and processes, IT auditors and financial auditors are exposed to relevant and irrelevant evidence from both domains. IT and financial auditors become exposed to irrelevant evidence when they conduct walkthroughs, read corporate policies and procedures, interview various employees, and trace transactions through client systems.
The exposure of IT auditors and financial auditors to irrelevant internal control evidence may contribute to audit failure. For example, audit failure could occur if irrelevant internal control evidence influences IT auditors and financial auditors to reduce their judgments of relevant control weaknesses and underestimate the amount of effort required to evaluate internal controls. The influence of irrelevant internal control evidence may vary when IT auditors and financial auditors specialize, or do not specialize, in the internal control evidence domain.
Previous studies have found that irrelevant evidence influenced financial auditors to reduce their fraud risk assessments and going concern assessments of relevant evidence. The current study extends this literature by focusing on the effects of superior domain knowledge on the use of irrelevant internal control evidence. The researcher compared the internal control judgments (effectiveness of internal controls and risk of material misstatement) and audit planning judgments (the hours necessary to effectively audit internal controls) of IT auditors and financial auditors when both auditor-types were exposed to relevant evidence with, and without, the presence of irrelevant evidence. Both types of auditors evaluated evidence from the automated control domain and the manual process domain separately.
Consistent with the existing literature on the influence of irrelevant evidence, the results in this study suggest that both auditor-types are influenced by irrelevant internal control evidence from both evidence domains. Anecdotal evidence suggests that IT auditors and financial auditors should be less influenced by irrelevant internal control evidence when they have superior domain knowledge. The results of this study suggest otherwise. The influence of irrelevant internal control evidence on IT auditors and financial auditors was stronger when IT auditors and financial auditors had superior domain knowledge.
Setting the Standard for the New Auditor's Report: An Analysis of Attempts to Influence the Auditing Standards Board
Marshall A. Geiger
This study addresses the lack of research on the process by which authoritative auditing standards are established by presenting a longitudinal study of the two-year development of SAS No 58, "Reports on Audited Financial Statements", by the Auditing Standards Board. The study catalogues and examines the perspectives and influences of virtually all parties involved in establishing the standard, including the comment letters, from the Financial Executives Institute, Treadway Commission, and the Securities and Exchange Commission. The result is an extensive identification and rigorous analysis of the issues surrounding audit reports, alternative solutions considered, and the rationale underlying the ultimate decisions. The study also provides an elaboration on the content analysis research methodology used to assess the comment letters and how this assessment was integrated into the overall study. Additionally, the study describes the history behind audit reporting in the United States, and includes an exhaustive summary of the research related to the auditor's report in a well-organized annotated bibliography.
Printing is not supported at the primary Gallery Thumbnail page. Please first navigate to a specific Image before printing.