What are some of the methods and sources of information the auditor can use to understand an auditee’s business?
Answer to relevant QuestionsHow is an auditor’s professional judgment applied in assessing the appropriateness of audit evidence? Why do audit firms and auditing standards require auditors to prepare and retain specific documentation of their audit work? If analysis is used to provide substantive audit evidence, what steps must be taken regarding the source information used in the analysis? A PA accumulates various kinds of evidence on which to base the opinion on financial statements. Among this evidence are confirmations from third parties.Required:a. What is an audit confirmation?b. What characteristics of ...Johnson & Company, PAs, audited the Guaranteed Trust Company. M. Johnson had the assignment of evaluating the collectability of real estate loans. Johnson was working on two particular loans: (1) A $4 million loan secured by ...
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