Question: In developing an understanding of the entity and its environment
In developing an understanding of the entity and its environment, the auditor can obtain information from numerous sources, such as knowledge from prior audits and discussions with management. List five additional potential sources (internal or external) of information about the entity and its environment.
Answer to relevant QuestionsIndustry conditions can be a source of business risks for an entity. Describe how each of the following industry conditions can result in business risks. a. The entity’s market characteristics (e. g., demand, capacity, ...How do management assertions relate to the financial statements? Why is it necessary to obtain corroborating evidence for inquiry and for observation? Multiple Choice1. Which of the following procedures would an auditor most likely rely on to verify management’s assertion of completeness? a. Reviewing standard bank confirmations for indications of cash manipulations. b. ...At December 31, 2013, EarthWear has $ 5,890,000 in a liability account labeled “Reserve for returns.” The footnotes to the financial statements contain the following policy: “At the time of sale, the company provides a ...
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