Here are the essential steps that accounting firms must take to improve audit quality. The author provides detailed coverage of important topics such as risk-based auditing techniques, analytical procedures, technology, and internal controls. After explaining why frequently used audit approaches are inadequate for detecting material fraud, the author: Provides specific and practical guidance to help auditors conduct higher quality audits Offers guidance to financial executives on ways to evaluate their independent audits Describes the steps that accounting firms must take to implement these much-needed changes Order your copy today!

Table of Contents:
Preface vii 1. A WAKE-UP CALL FOR ALL AUDITORS 1 “Please, Don’t Compare Us to Andersen!” 4 Fundamental Change Is Still Needed 7 Purpose of This Book 9 2. RISK-BASED AUDITING: SAVIOR OR VILLAIN? 13 Why Many Firms Resist Risk-Based Auditing 16 Progress Must Be Made 19 3. THE RISK OF “COOKING THE BOOKS” 21 General Methods of Cooking the Books 24 Why Companies Cook the Books 27 How Auditors Should Assess the Risk that a Client Has Cooked the Books 35 Tailoring Audit Programs 47 4. OTHER RISKS AND CONSIDERATIONS 53 Ask “Anticipation” Questions 56 Perform Proactive Research about the Client’s Business 57 Perform a Diligent Preliminary Analytical Review 62 Risk Assessments During Fieldwork 63 5. THE MANY BENEFITS OF ANALYTICAL PROCEDURES 67 Quality 71 Efficiency 74 Client Service 76 Staff Morale 78 6. COMMON PITFALLS OF ANALYTICAL PROCEDURES 81 Uncorroborated Client Explanations 84 Imprecise Explanations 89 Lack of Informed Expectations 93 Setting Scopes for Variance Analyses 101 7. AN EASY APPROACH TO IMPLEMENTING ANALYTICAL PROCEDURES 103 Step One: Think Analytical First 105 Step Two: Determine the Proper Strength 119 Step Three: Test and Evaluate Results 123 Lousy Internal Controls 129 Closing Thoughts 132 8. INTERNAL CONTROL:THE MISUNDERSTOOD CHILD 135 Types of Controls 139 Minimum Audit Requirements 146 9. TO TEST OR NOT TO TEST 155 A Four-Step Approach to Testing Controls 159 Step One: Evaluate Cost-Benefits 159 Step Two: Identify Specific Controls to Test 164 Step Three: Select and Perform Control Tests 169 Step Four: Arrive at Conclusions 173 Conclusion 175 10. TALKIN’ TO THE CLIENT 177 Who Should Ask the Questions? 180 How Reliable Is the Evidence Source? 181 Do You Hear What I Hear? 182 11. DATA EXTRACTION SOFTWARE 187 Purpose of This Chapter 190 Benefits of Data Extraction Software 191 Case Study 196 How to Proceed 199 12. ACTION STEPS 207 Thinkers and Robots 209 Three Essential Steps for Transforming Your Firm 211 Closing Thoughts 227 Index 229