The Audit Committee Handbook / Edition 5

The Audit Committee Handbook / Edition 5

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The Audit Committee Handbook / Edition 5

The classic handbook to audit committee responsibilities—completely updated to cover the latest guidance with practical insights on the new functions of the audit committee.

Now containing the newest regulatory guidance impacting audit committees, including new chapters on audit oversight and updated discussions on fraud risk, the Fifth Edition helps your audit committee plan its agenda and achieve its mission in corporate governance.

The Audit Committee Handbook, Fifth Edition guides you to:

  • Understand the role and responsibilities of the audit committee with a general update and reality check on auditing cycle activities

  • Identify the developments that impact audit committee practices and the most current techniques and strategies for committee meetings

  • Develop a repertoire of effective strategies to help the board of directors discharge its fiduciary responsibility to shareholders

  • Prepare a periodic assessment of professional development activities and an informed review of both audit processes and financial reporting processes

A must-have for all audit committee members, board directors, corporate secretaries, CEOs, CFOs, and auditors involved in the accounting practices of their firms, The Audit Committee Handbook, Fifth Edition is the most authoritative work on audit committees in the marketplace.

Product Details

ISBN-13: 9780470560488
Publisher: Wiley
Publication date: 03/22/2010
Pages: 400
Product dimensions: 6.40(w) x 9.30(h) x 1.50(d)

Table of Contents

Preface xi

Part 1 Getting Acquainted with Your Responsibilities 1

1 Corporate Accountability: Focus on the Audit Committee 3

Appropriate Accounting Skills 4

Internal Control Oversight 5

Auditor Oversight 6

Audit Committee Resources 7

Transactional Economics 8

The Nature and Importance of Corporate Accountability 8

Developments in Corporate Accountability 12

Corporate Accountability and the Audit Committee 32

Conclusion 43

Sources and Suggested Readings 43

2 Audit Committees: Basic Roles and Responsibilities 46

Organization of the Audit Committee 47

The Audit Committee Functions 63

The External and Internal Auditing Process 82

Sources and Suggested Readings 94

3 The External Users of Financial Reporting Information 97

Introduction 97

he Investors 101

Credit Grantors 110

Regulatory Agencies 114

Other Outside Constituencies 121

Important Developments in Business Reporting and Assurance Services 122

Benchmarking 130

Sources and Suggested Readings 131

4 The Legal Environment of the Audit Committee 134

General Legal Responsibilities 139

Other Federal Provisions Related to Fraud 149

Lessons for the Audit Committee from Litigation 151

Guidelines for Minimizing Legal Liability 166

Sources and Suggested Readings 170

5 Rules of the Road: Financial Reports and Their Audits 172

An Overview of U.S. Generally Accepted Auditing Standards 174

An Analysis of the Auditing Standards 176

Integration of Auditing and Related Accounting Standards 179

Attestation Engagements 188

International Auditing Standards 195

Sources and Suggested Readings 198

Part 2 The Planning Function of the Audit Committee 201

6 Planning the External Audit 203

Financial Statement Assertions 205

The Relationship between Risk and the External Audit 206

The Engagement Team 211

Types of Audit Tests 211

Evaluating the External Audit Plan 215

Sources and Suggested Readings 217

Appendix 6A Qualitative Factors That May Influence the Determination of Materiality 219

Appendix 6B Example Audit Planning Schedule 221

7 Planning the Internal Audit 224

Components of the Internal Audit Plan 224

Enterprise Risk Management 227

Oversight and Reporting 228

Sources and Suggested Readings 229

Part 3 The Monitoring and Reviewing Functions of the Audit Committee 231

8 Monitoring the System of Internal Control 233

Definition and Basic Concepts 235

Responsibility for the System of Internal Control 238

Reporting Requirements 241

Audit Committee Expectations 245

Sources and Suggested Readings 246

9 Evaluating the Internal and External Audit Function 247

Selecting and Staffing an Internal Audit Function 247

Monitoring the Internal Audit Function 257

Selecting and Evaluating an External Auditor 261

Reporting by the External Auditor 266

Sources and Suggested Readings 267

10 Communications between Auditors and Audit Committees 269

Audit Committee's Review Objective 269

Accounting Policy Disclosures 272

Guidelines for Reviewing Accounting Policy Disclosures 275

Sourcesand Suggested Readings 278

11 A Perspective on Fraud and the Auditor 279

Meaning of Fraud in a Financial Statement Auditor 279

The External Auditor's Responsibility 289

The Internal Auditor's Responsibility 296

Investigating Known Fraud 297

The Audit Committee's Oversight Approach to Fraud Risk Assessment 299

Sources and Suggested Readings 304

12 The Audit Committee, Corporate Culture, and Tone at the Top 307

Questionable Foreign Payments 307

Corporate Perquisites and Executive Compensation 311

Executive Compensation 316

Corporate Contributions 317

Conclusion 321

Sources and Suggested Readings 324

Part 4 The Reporting Function and the Audit Committee 327

13 Independent Auditors' Reports 329

The Auditors' Reports on Audited Financial Statements 329

Other Auditing Opinions 334

Other Reports of the Auditors 338

Sources and Suggested Readings 345

14 The Audit Committee's Report and Concluding Observations 346

Purpose of the Audit Committee's Report 347

Guidelines for Preparing the Report 349

Concluding Observations 355

Sources and Suggested Readings 362

Appendix 363

Professional Accounting Associations, Business Organizations, Boards, Commissions, and Directors Publications 363

About the Authors 367

Index 371

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