Last updated: 20 December 2021.
Below, you'll find expertly selected shortlists of the best internal audit and external audit books available right now, culminating in the top 5 ranked auditing books of all time. Whether you're looking for a beginners guide to auditing, or want to master a particular area of focus, you'll find a wide range of the best books about auditing below to chose from.
Don't forget, most of these books can even be read for free with Amazon's Kindle Unlimited free trial.
Click on any title below to see the latest price from Amazon, you'll be shocked at how affordable the most popular titles are. As an Amazon Associate, I earn a small commission from qualifying purchases which helps to support this site. This does not impact how I compile the list. Happy reading!
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My Top 5 External and Internal Auditing Books for 2022
Click covers to see latest reviews and prices1. The Principles of External Auditing - Brenda Porter at al.
Financial Expert Rating:
Synopsis:
"Principles of External Auditing has become established as one of the leading textbooks for students studying auditing. Striking a careful balance between theory and practice, the book describes and explains, in non-technical language, the nature of the audit function and the principles of the audit process.
The book covers international auditing and accounting standards and relevant statute and case law. It explains the fundamental concepts of auditing and takes the reader through the various stages of the audit process. It also discusses topical aspects of auditing such as legal liability, audit risk, quality control, and the impact of information technology."
Who this book is for:
The leading textbook on the subject of external auditing in the UK, The Principles of External Auditing is commonly the companion textbook alongside the audit modules of undergraduate courses in accounting and finance.
In this thick and comprehensive edition (last updated in 2014), Brenda Porter covers much more than what an audit is. Look forward to chapters on:
- Threats to the independence of auditors
- How audits have evolved over time
- The expectation gap between what an audit delivers versus the expectations of users
The Principles of External Auditing is currently rated 4.5 stars on Amazon, and I personally recommend this title above all other external audit guides.
Financial Expert Rating:
Synopsis:
"Want to be an auditor and need to hone your investigating skills? Look no further. This friendly guide gives you an easy-to-understand explanation of auditing — from gathering financial statements and accounting information to analyzing a client's financial position. Packed with examples, it gives you everything you need to ace an auditing course and begin a career today.
- Auditing 101 — get a crash course in the world of auditing and a description of the types of tasks you'll be expected to perform during a typical day on the job
- It's risky business — find out about audit risk and arm yourself with the know-how to collect the right type of evidence to support your decisions
- Auditing in the real world — dig into tons of sample business records to perform your first audit
- Focus on finances — learn how both ends of the financial equation — balance sheet and income statement — need to be presented on your client's financial statements
- Seal the deal — get the lowdown on how to wrap up your audit and write your opinion
- After the audit — see the types of additional services that may be asked of you after you've issued your professional opinion."
Who this book is for:
In contrast to 'The External Principles of Auditing' at #1, Auditing for Dummies, a title by Maire Loughran attempts to tackle the subject of external audit with a lighter touch.
While textbooks attempt to comprehensively cover every facet of a subject, this '...for Dummies' guide focuses only on the aspects which have practical use for someone hoping to become a auditor.
It's therefore less useful for accounting and finance students, but very useful for new joiners (or prospective applicants) to an auditing firm.
What I like in particular about this title is its fun tone and readable language, which helps any reader progress through what can sometimes be a dense and technical subject.
Financial Expert Rating:
Synopsis:
"A successful internal audit program is essential to the success of any management system. A successful internal audit program also requires successful auditors. Auditing isn’t taught in school and doesn’t always come easily to those just starting out. Fortunately, bestselling author Craig Cochran has distilled down the essential elements of a successful internal audit program into plain English that anyone can understand.
Just as he did with his bestselling ISO 9001:2015 in Plain English book, Cochran has written a comprehensive yet easily understandable guide to internal auditing. Internal Auditing in Plain English was written so that anyone at any level of the organization can understand the basics of a successful internal auditing process. Plus, the book goes beyond the basics with comprehensive detail about establishing an internal audit program, selecting and training auditors, auditing requirements, interview techniques, planning audits, reporting, audit follow ups, and much more."
Who this book is for:
It's very easy to recommend this title as the highest ranking internal audit title in this list.
With over 50 reviews on Amazon, Internal Auditing in Plain English is rated at 4.5 and has clearly won over many beginners to this field.
This straightforward book is ideal for people who are new to internal auditing, experienced auditors who want to get more out of their audits, and for employees who just need a basic understanding of what internal auditing is and how it applies to them.
Cochran uses real-world examples and frequently asked questions to help build a comprehensive understanding of a successful internal audit program and to build the skills of successful internal auditors.
Financial Expert Rating:
Synopsis:
"Internal Control Audit and Compliance provides complete guidance toward the latest framework established by the Committee of Sponsoring Organizations (COSO).
With clear explanations and expert advice on implementation, this helpful guide shows auditors and accounting managers how to document and test internal controls over financial reporting with detailed sections covering each element of the framework.
Each section highlights the latest changes and new points of emphasis, with explicit definitions of internal controls and how they should be assessed and tested.
Coverage includes easing the transition from older guidelines, with step-by-step instructions for implementing the new changes."
Who this book is for:
A serious guide for a serious internal audit regime - Internal Control Audit & Compliance is the authoratative guide to complying with the US internal control requirements of Sarbanes Oxley and beyond, also known as SOX.
Most US listed businesses must be SOX compliant, which places high standards on the quality and testing of internal controls operating in many parts of the business.
This text will help you:
- Understand the new COSO internal controls framework
- Document and test internal controls to strengthen business processes
- Learn how requirements differ for public and non-public companies
- Incorporate improved risk management into the new framework
Financial Expert Rating:
Synopsis:
"Until the spring of 2001, Enron epitomized the triumph of the New Economy. Feared by rivals, worshipped by investors, Enron seemingly could do no wrong. Its profits rose every year; its stock price surged ever upward; its leaders were hailed as visionaries.
Then a young Fortune writer, Bethany McLean, wrote an article posing a simple question - how, exactly, does Enron make its money?
Within a year Enron was facing humiliation and bankruptcy, the largest in US history, which caused Americans to lose faith in a system that rewarded top insiders with millions of dollars, while small investors lost everything. It was revealed that Enron was a company whose business was an illusion, an illusion that Wall Street was willing to accept even though they knew what the real truth was. This book - fully updated for the paperback - tells the extraordinary story of Enron's fall."
Who this book is for:
A book that needs to be read to be believed. A must-read for any current or aspiring auditor.
The Smartest Guys in the Room tells of perhaps the largest and most complex accounting scandal of all time.
The rise and subsequent fall of Enron, sparked a change US auditing standards, and resulted in the demise of Arthur Andersen, which was back then part of the 'Big Five'.
In this fast-paced and easy-to-read book, you'll read about how it happened, and how the bosses of Enron almost got away with this shocking fraud.
Data is changing everything
"Two-thirds of the Earth's surface is covered with water. The other third is covered with auditors from headquarters."
As I've alluded to elsewhere in this article, audit methodology is currently undergoing rapid change. Audit procedures are moving away from the question of
"What could go wrong?" to the question of "What did go wrong?"
Data analytics is a whole new field of auditing. It's about using data analysis tools to review larger datasets, such as all the journal entries in the general ledger covering the year to date.
The humble sampling approach is beginning to look like an aging technique. Why reliable on statistical sampling of a small proportion of a population of transactions, when an auditor can use a data analytics tool to quickly hone in on groups of transactions as sub-set of the population.
While software developers have been building tools for licensing to audit firms, many of the larger firms, such as the Big Four have developed proprietary software in-house, allowing them to pitch for business on the basis that their techniques are novel and ahead of the rest of the pack.
Of course, this requires a great investment in software developers, testing and perhaps most of all - staff training. The best data analytics books for auditors featured on this page can help you get up to speed with this exciting area of technological development in the industry.
The audit profession is under scrutiny - best practise auditing books could be the solution
"The auditor is a watchdog, not a bloodhound."
Following a string of high-profile accounting scandals and business failures, rightly or wrongly, politicians and regulators have placed auditors firmly in the spotlight.
Several committees and reviews have been conducted (and are still ongoing), into whether changes to legislation is required to address the perceived weaknesses in auditor performance.
This pressure has manifested itself in corporate changes, such as sweeping changes to audit methodology and the quality control processes applied by firms. This has particularly impacted the largest audit engagements.
But more often than not, the pressure is felt by the individual - the audit junior, audit senior or audit manager who is tasked with preparing or reviewing audit working papers. When the time comes to sign their name, the same thoughts cross their mind:
- Has this audit procedure been designed to adequately address the risk?
- Has this procedure been performed to a high standard?
- Have we found everything?
The best auditing books for professionals below can to help alleviate those concerns by setting out best practise; from the design of internal and external audit procedures, to their execution and the evaluation of results.
There's no need to rely upon the patchwork of internal training offered by an employer. You can take full responsibility for ensuring your work is of the highest quality.
The best auditing books for beginners allow you to sample a job before you commit
The best external and internal audit books paint a clear picture of what is expected of an auditor. By skimming from chapter to chapter, you will get a glimpse of the different challenges and judgements that an audit professional will make as part of their role:
- Understanding how the accounting system and processes of a business actually work
- Choosing the areas of highest risk of misstatements
- Picking procedures and tailoring them to catch material instances of errors
- Testing transactions or analysing data to identify errors or process violations.
- Reaching a conclusion as to whether the financials of a business have been materially misstated.
The entire life cycle of an audit, as described above, will be covered in-depth by many of the study texts below. While the methodologies of different internal audit functions or audit firms will vary - the principles of audit remain the same.
Therefore, one or two auditing books can give you an incredible level of insight into what auditing is like before you actually apply to work for a finance function or accounting firm. You could think of it as a cheap career insurance policy - small upfront payment, and avoid a potentially huge cost!
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