Higher Education

Auditing: A Risk-Based Approach to Conducting a Quality Audit, 9th Edition

  • Includes ACL CD-ROM.
  • Karla Johnstone University of Wisconsin, Madison
  • Audrey Gramling Colorado State University
  • Larry E. Rittenberg University of Wisconsin, Madison
  • ISBN-10: 1133939155  |  ISBN-13: 9781133939153
  • 912 Pages
  • Previous Editions: 2012, 2010, 2008
  • © 2014 | Published
  • College Bookstore Wholesale Price = $283.50
  • Newer Edition Available
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The auditing profession has seen substantial changes in the last few years. For example, the AICPA and the IAASB have issued clarified standards that harmonize auditing standards in the U.S. (for non-public entities) and internationally. The Committee of Sponsoring Organizations (COSO) of the Treadway Commission has issued an updated Internal Control–Integrated Framework. The AICPA recently issued new audit sampling guidance. Prepare your students for these changes by using Johnstone/Gramling/Rittenberg's AUDITING: A RISK-BASED APPROACH TO CONDUCTING QUALITY AUDITS, 9th EDITION. AUDITING 9e reflects the clarified auditing standards and the newest PCAOB standards, discusses COSO's updated Internal Control–Integrated Framework, integrates discussion of fraud risk throughout the text, and features entirely new and significantly revised end-of-chapter problems. In addition, students will gain valuable experience by using the professional ACL auditing software that is packaged with each new text. AUDITING 9e helps your students understand the full range of auditing issues in the evolving global environment.

Features and Benefits

  • Emphasis on Professional Skepticism: This emphasis provides students with the tools to learn how to apply the concept of professional skepticism. The text contains an introduction to this topic in chapter 1, as well as end-of-chapter problems throughout the text to help students see the practical application of this concept.
  • Emphasis on Professional Judgment: In addition to the focus on professional judgment in the text, interactive exercises emphasize this key auditing skill. This material includes analyses of Ford and Toyota's SEC filings and proxy (Def 14A) materials. Further, the text contains end-of- chapter problems to help ensure student understanding of the link between mandatory financial reporting and auditing, risk assessment, transaction cycles, and analytical procedures.
  • Professional Judgment in Context: Each chapter opens with a real-life example from practice that illustrates the judgments involved in auditing. The examples tie to the learning objectives in the chapter, and address important topics such as fraud, regulation, audit quality, and internal control, among others.
  • Professional Decision-Making and Ethical Decision-Making Frameworks: Decision-making frameworks, complete with a chapter-opening Professional Judgment in Context feature, require students to think about a real-life professional and ethical decisions associated with that chapter. End-of-chapter cases continue the use of professional and ethical decision-making frameworks to help students address contemporary issues.
  • AUDIT OPINION FORMULATION PROCESS: A chapter-opening Audit Opinion Formulation Process figure helps students identify the major steps in the audit process and see how those steps relate to specific chapters within that process.
  • Auditing in Practice Features and Chapter Exhibits: Each chapter contains multiple Auditing in Practice features and Exhibits that highlight important, relevant, and practical examples and information related to chapter topics. Selected end-of-chapter problems require students to review these features and exhibits in order to answer related questions.
  • Real-Life Corporate Exposures to Provide Practical Applications: Ford and Toyota end-of-chapter cases use the actual SEC filings and proxy materials from Ford Motor Company and Toyota Motor Corporation. The individual and group exercises use these real-life corporate disclosures to help students extract the practical applications from the chapter concepts.
  • Graduate Student Research Analysis Problems: Because academic research yields insights on auditor decisions, the end-of-chapter problems provide at least one problem related to an academic research paper addressing a relevant topic. Each problem requires the student to access an identified research paper, read it, and answer a set of uniform questions tied to the chapter's topics. These activities help students link the topical theory of the chapter with relevant academic research. Academic research articles have been selected that are approachable to students, and yet highlight the complexities in the real practice of auditing. These problems address the recommendation of the recent report from The Pathways Commission to imbed academic research into learning experiences for all accounting students.
  • ACL Generalized Audit Software With Updated Cases: Version 9 of ACL Desktop Education Edition, the most popular generalized audit software, comes with each new copy of the text. The 9th edition integrates ACL software into homework and cases. A revised ACL Appendix and tutorial is located at the end of the textbook.

Table of Contents

1. Auditing: Integral to the Economy.
2. The Risk of Fraud and Mechanisms to Address Fraud: Regulation, Corporate Governance, and Audit Quality.
3. Internal Control over Financial Reporting Management's Responsibilities and Importance to the External. Auditors
4. Professional Liability and the Need for Quality Auditor Judgments and Ethical Decisions.
5. Professional Auditing Standards and the Audit Opinion Formulation Process.
6. A Framework for Audit Evidence.
7. Planning the Audit: Identifying and Responding to the Risks of Material Misstatement.
8. Specialized Audit Tools: Sampling and Generalized Audit Software.
9. Auditing the Revenue Cycle.
10. Auditing Cash and Marketable Securities.
11. Auditing Inventory, Goods and Services, and Accounts Payable: The Acquisition and Payment Cycle.
12. Auditing Long-Lived Assets: Acquisition, Use, Impairment, and Disposal.
13. Auditing Debt Obligations and Stockholders' Equity Transactions.
14. Activities Required in Completing a Quality Audit.
15. Audit Reports on Financial Statements.
16. Advanced Topics Concerning Complex Auditing Judgments.
17. Other Services Provided by Auditing Firms.

What's New

  • New: Incorporates All AICPA and IAASB Clarified Auditing Standards: The text has been significantly revised to reflect the clarified standards. A new feature (CHAPTER 5, Appendix) articulates the relationship between AICPA, IAASB, and PCAOB standards. Where relevant, the text compares and contrasts key differences between standards. Select end-of-chapter problems require students to review the Appendix to Chapter 5, access relevant standards, and answer related questions.
  • New: Audit Sampling Guidance: The AICPA issued new audit sampling guidance in 2012. A newly revised CHAPTER 8 incorporates all relevant changes in terminology and sampling procedures.
  • New: Restructuring Of Chapters Containing Transaction Cycles (Chapters 9-13): Each chapter covering one of the primary transaction cycles has been restructured and contains a unifying framework to address key audit activities. These activities include identifying significant accounts, disclosures, and relevant assertions; identifying and assessing inherent risks, fraud risks and control risks; using preliminary analytical procedures to identify possible material misstatement; determining appropriate responses to identified risks of material misstatement; determining appropriate tests of controls and considering results of tests of controls; and determining and applying appropriate and sufficient substantive audit procedures.
  • New: Chapter Devoted Solely To Other Services Provided By Audit Firms: The first 16 chapters of the text include discussion of the audit opinion formulation process and cover topics relevant to integrated and financial statement audits. The NEW Chapter 17 covers other services, including describing non-audit attestation services, review engagements, compilation engagements, assurance on interim financial information, special considerations for reporting, agreed-upon procedures, financial forecasts and projections, pro forma financial information, forensic accounting, and sustainability reporting.
  • Revised: Advanced Topics Concerning Complex Audit Judgments: This revised CHAPTER 16 covers a variety of important, complex audit judgments including determining materiality; resolving detected financial statement misstatements; distinguishing between material weaknesses and significant deficiencies in internal control; assessing the quality of a client's internal audit function; identifying and describing concepts of fair value and impairment, including goodwill impairment; and considering approaches to auditing significant management estimates.
  • Updated: End-of-Chapter Problems: This material has been thoroughly updated and streamlined to be much more user friendly. The end-of-chapter problems are organized into the following categories: True-False Questions, Multiple-Choice Questions, Review and Short Case Questions, Contemporary and Historical Cases, Application Activities, Academic Research Cases, Ford and Toyota Case, and ACL Cases.
  • Enhanced: Emphasis on Fraud: A newly revised Chapter 2 introduces the topic of fraud very early in the text, and this important topic is emphasized in relevant chapters and end-of-chapter problems throughout the text. CHAPTER 2 covers the risk of fraud and mechanisms to address fraud, including regulation, corporate governance, and audit quality.
  • Revised: Emphasis on Internal Control: A newly revised chapter 3 discusses the importance of internal control to quality reporting and auditing and provides complete coverage of the Committee of Sponsoring Organizations (COSO) of the Treadway Commission's updated Internal Control—Integrated Framework issued in 2013.
  • Renewed: Emphasis on Audit Quality: As reflected in the new text title, the text focuses on audit quality, including the determinants of audit quality that are introduced through the Financial Reporting Council Audit Quality Framework in chapter 2. The text applies elements of this framework throughout selected chapters, with a particular focus in the chapter on completing the audit (chapter 14).

Efficacy and Outcomes


"I have used the [this] text for four years now and it has been an outstanding resource for teaching my students the fundamentals of contemporary auditing. Text discussions and end-of-chapter applications help me to develop students' critical analysis and judgment skills, sensitivity and responses to ethical dilemmas, and understanding and appreciation of the essential role of professional skepticism in auditing. My impression based on use of successive editions of the text is that the authors have worked very hard to ensure it is up-to-date as auditing standards and related guidance evolve and audit-relevant events occur in the rapidly changing business environment. Without reservation, I highly recommend this text."

— Professor Tim Bell, University of North Florida

"As a former auditor and current audit professor, I find the book very easy to follow and well written. The content is organized in a similar fashion to the audit process itself, which I think is essential for students' understanding. The authors also include topics that I have not found in any other auditing textbook (e.g., an entire chapter on corporate governance, sections on upcoming changes or changes soon to be integrated into the profession). This textbook simply feels more up to date about current events in auditing."

— Professor Kim Westermann, Florida International University

"This textbook hits the sweet spot of the bat! As far as I am concerned it hits a home run! Not too complex yet not too simple, the right amount of standards presentation/explanation then a great example to illustrate the standard in the real world. This textbook is well organized and presents the materials and issues as an auditor would confront them in an actual audit. I like the inclusion of ACL on the disc that accompanies the book. The ACL materials are presented in such a manner that tech savvy students can do the assignments with a minimum of instruction."

— Professor Douglas E. Ziegenfuss, Old Dominion University

"I selected this textbook because I believe that it presents a realistic approach to the integrated audit. Having worked with several of the Global Seven firms, it is evident to me that the authors have been diligent in writing a book that mirrors the risk-based approach to the audit. In addition, my students have enjoyed outstanding success on the AUD Exam having used this text as their primary study resource."

— Professor Barry J. Bryan, Southern Methodist University


All supplements have been updated in coordination with the main title. Select the main title's "About" tab, then select "What's New" for updates specific to title's edition.

For more information about these supplements, or to obtain them, contact your Learning Consultant.

Instructor Supplements

AUDITING BUSINES RISK APPROACH (book only)  (ISBN-10: 1133939163 | ISBN-13: 9781133939160)

List Price = $377.95  | College Bookstore Wholesale Price = $283.50

Solutions Manual  (ISBN-10: 1133962289 | ISBN-13: 9781133962281)

Instructor's Resource CD-ROM  (ISBN-10: 1133962319 | ISBN-13: 9781133962311)

This all-in-one tool places all the resources you need to plan and teach in one convenient tool. You'll find the Solutions Manual, Instructor's Manual, PowerPoint slides, Test Bank in Microsoft Word, and ExamView® testing software at your fingertips. PowerPoint Slides: Bring your lectures to life with engaging PowerPoint® slides that are interesting, visually stimulating, and paced for student comprehension. These slides are ideal as lecture tools and provide a clear guide for student study and note-taking. PowerPoint slides are available on the IRCD and are downloadable by chapter on the Instructor's Resources page of the product web site. Solutions Manual: This Solutions Manual offers the highest accuracy as it provides solutions for all end-of-chapter material. The Solutions Manual is available on the IRCD and on the text Website. Test Bank: A proven Test Bank, found on the Instructor's Resource CD, features the questions instructors need to efficiently assess students' comprehension. Examview Software: This easy-to-use test-creation program contains all questions from the Test Bank, making it simple to customize tests to your specific class needs as you edit or create questions and store customized exams. This is an ideal tool for online testing. This software is available on the IRCD only.

Student Supplements

AUDITING BUSINES RISK APPROACH (book only)  (ISBN-10: 1133939163 | ISBN-13: 9781133939160)

List Price = $377.95  | College Bookstore Wholesale Price = $283.50

Meet the Author

Author Bio

Karla Johnstone

Karla M. Johnstone, Ph.D., CPA, is an Associate Professor of Accounting and Information Systems at the University of Wisconsin, Madison. She teaches auditing, and her research investigates auditor decision making, including auditors' client acceptance and continuance decisions, how fraud risk and fraud brainstorming affects audit planning and audit fees, client–auditor negotiation, and audit budget-setting processes. She has also published various articles on accounting curriculum effectiveness. Professor Johnstone serves on the editorial boards of several academic journals and is active in the Auditing Section of the American Accounting Association, currently serving on the Executive Committee in the role of Treasurer. She has worked in practice as a corporate accountant, a staff auditor, and was a doctoral fellow in residence at Coopers and Lybrand.

Audrey Gramling

Audrey A. Gramling, Ph.D., CPA, CIA, is the Professor and Accounting Department Chair at Colorado State University. Professor Gramling's research investigates both internal and external auditing issues, with a focus on decision behavior of auditors, external auditor independence, internal control reporting, and other factors affecting the market for audit and assurance services. Prior to earning her Ph.D. at the University of Arizona, Professor Gramling worked as an external auditor at a predecessor firm of Deloitte and as an internal auditor at Georgia Institute of Technology. She has also served a one-year appointment as an Academic Accounting Fellow in the Office of the Chief Accountant at the U.S. Securities and Exchange Commission. She is the Past President of the Auditing Section of the American Accounting Association and has served in an advisory role to the Committee of Sponsoring Organizations (COSO).

Larry E. Rittenberg

Larry E. Rittenberg, Ph.D., CPA, CIA, is Professor Emeritus, Department of Accounting and Information Systems, at the University of Wisconsin, Madison, where he taught courses in auditing, risk management, and corporate governance. He is also Chair Emeritus of the Committee of Sponsoring Organizations of the Treadway Commission (COSO), where he has provided oversight of the development of the COSO Enterprise Risk Management Framework as well as the COSO Guidance for Smaller Businesses. He has served as Vice-Chair of Professional Practices for the Institute of Internal Auditors (IIA) and President of the IIA Research Foundation; and has been a member of the Auditing Standards Committee of the AAA Auditing Section, the AICPA's Computer Audit Subcommittee, the Information Technology Committee, the NACD Blue Ribbon Commission on Audit Committees; and Vice-President and Treasurer of the American Accounting Association. He is a member of an audit committee, board, and governance committee of Woodward Governor, a publicly traded company, and has consulted on audit committee, risk, and control issues with the largest public company in China. More recently, he has been named as one of the seven members of the International Oversight Council for Professional Practice of the IIA. Professor Rittenberg served as staff auditor for Ernst and Young and has co-authored five books and monographs, and numerous articles.