Describe how materiality is used in (1) planning and performing the audit and (2) evaluating evidence gathered
Question:
Describe how materiality is used in (1) planning and performing the audit and (2) evaluating evidence gathered during the audit process.
a. Provide an example describing how materiality might be used in planning and performing the audit.
b. Provide an example describing how materiality might be used in evaluating the results of test work in the audit of the revenue business process.
c. Should an auditor issue an unqualified opinion if the evidence gathered during the audit indicates that the dollar amount of misstatement in the financial statements is material? Explain your answer. What should the auditor do in this situation?
d. Can an auditor issue an unqualified opinion gathering only internal control evidence for some business processes? Explain your answer.
e. Can an auditor issue an unqualified opinion after gathering only substantive evidence for some business processes? Explain your answer.
f. Can an auditor issue an unqualified opinion based on a combination of internal control and substantive testing? How does the auditor combine the results from internal control testing and substantive testing to keep audit risk to an accept-ably low level?
Financial statements are the standardized formats to present the financial information related to a business or an organization for its users. Financial statements contain the historical information as well as current period’s financial...
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Auditing and Assurance Services An Applied Approach
ISBN: 978-0073404004
1st edition
Authors: Iris Stuart