Professional Documents
Culture Documents
Chapter 1
Use with The Audit Process 4th Edition
By Iain Gray & Stuart Manson ISBN 9781844806782
2008 Cengage Learning
LEARNING OBJECTIVES
After studying this chapter you should be
able to:
ACTIVITY 1.1
ACTIVITY 1.2
agency theory;
ACTIVITY 1.3
Set out above are the reasons why audits might
be demanded. Consider the following questions.
ACTIVITY 1.3
(2) Do you think it is true that nobody can be trusted to
act on other peoples behalf, without other people looking
over their shoulder?
(3) Should auditors be held liable for all the losses
incurred by shareholders should a company collapse,
assuming that the auditors have given their opinion that
the going concern concept was appropriate for the
preparation of the financial statements?
ACTIVITY 1.4
ACTIVITY 1.5
ACTIVITY 1.6
TABLE 1.1
Concepts of auditing
Date
Event
Preliminary stages
30 March 2006
3 April 2006
Event
th
Use
withProcess:
The AuditPrinciples,
Process 4Practice
Editionand Cases
Use with The
Audit
By Iain Gray
& Gray
Stuart&Manson
ISBN 9781844806782
Third Edition
by Iain
Stuart Manson
ISBN 1-86152-946-5
2005
2008 Thomson
Cengage Learning
Event
2 May 2006
th
Use
withProcess:
The AuditPrinciples,
Process 4Practice
Editionand Cases
Use with The
Audit
By Iain Gray
& Gray
Stuart&Manson
ISBN 9781844806782
Third Edition
by Iain
Stuart Manson
ISBN 1-86152-946-5
2005
2008 Thomson
Cengage Learning
Event
Event
15 November 2006
Event
Final preparation
45 December 2006
Event
30 December 2006
Event
Event
2 April 2007
Event
Directors sign financial
statements.
Issue audit report.
2 May 2007
local authorities
universities
water companies
hospitals
nuclear power stations
charities
ACTIVITY 1.7
Now consider a possible role for audit in the
following cases.
KEY POINTS p. 20
Important issues are:
(a) users value reliable accounts;
(b) auditors must be competent;
(c) audit is a search for evidence;
(d) auditors should adopt an attitude of
professional scepticism.
ACTIVITY 1.8
CHAPTER SUMMARY
This chapter has introduced:
FURTHER READING
Beattie, V. Fearnley, S. and Brandt, R. (2001) Behind Closed
Doors: What Company Audit is Really About, Basingstoke
and New York: Palgrave.
Benston, G.J. (1985) The Market for Public Accounting
Services: Demand, Supply and Regulation, Journal of
Accounting and Public Policy, 4: 3379.
Flint, D. (1971) The role of the Auditor in Modern
Society: An Exploratory Essay, Accounting and
Business Research, Autumn, 28793.