Accounting and Auditing for the Construction Industry

Overview

This study examines how a paradigm shift from traditional to digital audits could affect the audit expectation gap. It uncovers possible new areas of the expectation gap and threats and challenges resulting from this paradigm shift. The findings suggest that audit digitalization will result in the profession transitioning from the defensive approach of educating users on auditors — duties to a constructive approach of using digital tools to perform some of the duties that users expect of auditors. Digital technologies have the potential to enhance internal controls and facilitate fraud prevention and detection, thus narrowing the expectation gap with these critical issues. The potential benefits of switching to the constructive approach include lower costs for audit firms, enhanced audit quality, and improved client perceptions of auditors.

Highlights

Illustrative computations for revenue recognition
Analysis of FASB revenue recognition standard and the anticipated impact on the construction industry
Application of "risk-based" audit model to contractors
The "Lookback" analysis and the contractor's estimating reliability
Practical approach to auditing contracts completed and in progress
Numerous computations and alternative approaches
Independent Contractor qualifications

Prerequisites

None.

Objectives

Recognize and handle the basic accounting and auditing issues peculiar to the construction industry
Identify financial statement presentation and disclosure issues
Be aware of the specific bonding requirements and objectives
Explore the components of revenue recognition and costing using a risk-based perspective
Address the common pitfalls for error, and learn to apply the principles for all types of general and specialty contractors
Develop an audit approach for specific identified risks
Address the viability of project site visits

Preparation

None.

Notice

This is a self-study/on demand course offered by a 3rd party vendor and will NOT be accessible in the My Upcoming CPE section of the ISCPA website. Course access information will be emailed directly to you by CalCPA. The course expires one year from the purchase date. Format = Online Self-Study.