Question: Describe the difference between a known and a likely misstatement. As part of your explanation, describe the roles of each of the following: - Materiality

Describe the difference between a known and a likely misstatement. As part of your explanation, describe the roles of each of the following:

- Materiality

- Degree of objectivity

- Impact on financial statements

- Implications for overall audit risk

Also, under what conditions would the auditor negotiate with a client in deciding whether to require the client to correct the financial statements for either type of misstatement?

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A known misstatement refers to a specific error or deviation from the applicable financial reporting framework that the auditor has identified with certainty during the audit It means the auditor has ... View full answer

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