Professional scepticism Risk & materiality Objectives of a financial statement audit Obtain reasonable assurance Financial statements...
Fantastic news! We've Found the answer you've been seeking!
Question:
Transcribed Image Text:
Professional scepticism Risk & materiality Objectives of a financial statement audit Obtain reasonable assurance Financial statements are fee of material misstatement Responsibilities Auditor-opinion Management-preparation Financial statements-representation Limitations of testing Limitations of Control Evidence is persuasive not conclusive Subjective judgement Financial statements are prepared according to applicable reporting standards Provide an opinion 6.1 Explain the difference between reasonable assurance and absolute assurance in relation to an audit. (2 Marks) 6.2 The risk of material misstatement exists at two levels within the audit process. Explain the two levels and provide two examples for each level. (3 Marks) (4 Marks) 6.3 Explain what is meant by "evidence is persuasive and not conclusive." 6.4 Explain what you understand by audit risk and the relationship that exists (if any) between materiality and audit risk. (6 Marks) 6.5 Explain the difference between "engagement activities and" "planning" in the audit process. Be sure to provide details about each stage and make use of examples. (10 Marks) Professional scepticism Risk & materiality Objectives of a financial statement audit Obtain reasonable assurance Financial statements are fee of material misstatement Responsibilities Auditor-opinion Management-preparation Financial statements-representation Limitations of testing Limitations of Control Evidence is persuasive not conclusive Subjective judgement Financial statements are prepared according to applicable reporting standards Provide an opinion 6.1 Explain the difference between reasonable assurance and absolute assurance in relation to an audit. (2 Marks) 6.2 The risk of material misstatement exists at two levels within the audit process. Explain the two levels and provide two examples for each level. (3 Marks) (4 Marks) 6.3 Explain what is meant by "evidence is persuasive and not conclusive." 6.4 Explain what you understand by audit risk and the relationship that exists (if any) between materiality and audit risk. (6 Marks) 6.5 Explain the difference between "engagement activities and" "planning" in the audit process. Be sure to provide details about each stage and make use of examples. (10 Marks)
Expert Answer:
Answer rating: 100% (QA)
61 Reasonable assurance and absolute assurance are two levels of assurance that an auditor can provide about the accuracy of financial statements Reasonable assurance refers to the level of assurance ... View the full answer
Related Book For
Stats Data and Models
ISBN: 978-0321986498
4th edition
Authors: Richard D. De Veaux, Paul D. Velleman, David E. Bock
Posted Date:
Students also viewed these corporate finance questions
-
The Goodman Tire and Rubber Company periodically tests its tires for tread wear under simulated road conditions. To study and control the manufacturing process, 20 samples, each containing three...
-
A tire manufacturer is considering a newly designed tread pattern for its all-weather tires. Tests have indicated that these tires will provide better gas mileage and longer tread life. The last...
-
Which of the below is the correct order of the consumption process? Question 2 options: Awareness; Thinking; Planning; Implementation/Action; Evaluation Evaluation; Thinking; Planning;...
-
What can a researcher do to make the request for information seem legitimate? Discuss.
-
At time \(t=0\) a computer system consists of \(n\) operating computers. As soon as a computer fails, it is separated from the system by an automatic switching device with probability \(1-p\). If a...
-
1. What was the first thing that PM Solutions did when it was hired by VELCO? 2. Why was the VELCO project compared to a political campaign? 3. Why do you think VELCO was so successful in cutting the...
-
The Scampini Supplies Company recently purchased a new delivery truck. The new truck cost $22,500, and it is expected to generate net after-tax operating cash flows, including depreciation , of...
-
OA beam of negligible mass is shown in the given diagram. If a force of 55 N acts at a point 0.45 m away from the hinge and making an angle at 68. What is the magnitude and direction of the torque?...
-
Northern Products reported the following amounts in its 2022 financial statements. The 2021 amounts are given for comparison. Requirements 1. Compute Northerns quick (acid-test) ratio at the end of...
-
Assume that the government creates price supports for tomatoes in order to help the farmers. If these price supports take the form of a price floor in which the government prohibits the price of...
-
Explain the meaning of over trading.
-
Why is principled negotiation superior to other negotiating strategies?
-
Explain the methods of transfer pricing.
-
Should group members always use the collaborating style and avoid the competing (power-forcing) style?
-
What is the six sigma approach to performance measurement.
-
The table below captures data for a small book exchange and book club that you manage. You record the books that members have read as well as the book club that each member belongs to. You want to...
-
Willingness to pay as a measure of a person's value for a particular good measures the maximum a person would be willing to pay requires that payment actually be made depends on the satisfaction that...
-
As in Exercise 1, for each of the following situations, define the parameter and write the null and alternative hypotheses in terms of parameter values. a) Seat-belt compliance in Massachusetts was...
-
A machine is supposed to fill cans with 16 oz of soup. Of course there, will be some variation in the amount actually dispensed, and measurement errors are often approximately normally distributed....
-
An artist experimenting with clay to create pottery with a special texture has been experiencing difficulty with these special pieces. About 40% break in the kiln during firing. Hoping to solve this...
-
What is a SIPOC diagram?
-
Explain the role of robotics and smart factories in manufacturing, services, and supply chains.
-
What is CAD/CAE? Provide one nontextbook example.
Study smarter with the SolutionInn App