Auditors face some unique circumstances in auditing financial statements. Two that suggest themselves immediately follow.

a. The parties paying their bill are the ones whose financial statements are being audited.

b. Of the two types of errors auditors can make (accepting misstated financial statements or rejecting fairly stated financial statements), accepting misstatements are of much greater concern.

How do these circumstances affect the audit process, and how might they differ under different regulatory jurisdictions? Specifically, how do they affect the process of identifying and obtaining relevant audit information, evaluating alternatives, and selecting the best action from among those available to an auditor?