If the auditee’s revenue transactions for the year are material but the auditor assesses the risk of material misstatement to be low, why do the audit standards require the auditor to design and perform substantive procedures for these transactions regardless of the low risk assessment?
Answer to relevant QuestionsWhat procedures are auditors required to perform related to the financial statement closing process? Why are these procedures required? What can they find? If the auditor assessed the risk of material misstatement to be low, ...List the control objectives and the misstatement risk that each one relates to. What does the auditor need to understand about the auditee’s control environment? What is the purpose of a bridge working paper, and what information does it contain? Describe one manual and one IT control procedure designed to prevent a credit sale being processed without proper authorization by the credit manager.
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