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;...
-
Find cos = 4/3 and sin < 0.
-
Explain when the buyer has the right to reject the goods and what obligations the buyer has upon rejection.
-
Repeat the calculations of Example 6.3, but for \(80 \mathrm{~mol} \%\) of the liquid distilled. Data From Example 6.3:- Suppose the liquid of Example 6.1 [50 mol% n-heptane (A), 50 mol% n-octane...
-
(EPS with Convertible Bonds and Preferred Stock) The Ottey Corporation issued 10-year, $4,000,000 par, 7% callable convertible subordinated debentures on January 2, 2010. The bonds have a par value...
-
Discuss the following: a) b) c) The usefulness of models in managerial decision-making within firms. (5 marks) Process of theory formulation/model building (using an example of a theory/model known...
-
Assess the claim that the term public administration is difficult to define.
-
What is the relevance of 'purpose' under pt IVA? Whose purpose is relevant and how is purposed ascertained?
-
-1 Reverse osmosis membrane filtration is to be used to treat brackish (saline) groundwater to supply drinking water for a NSW regional city. Feed water will be provided at a flow rate of 25,000...
-
The following data applies to GoodCorp. (in millions of US $): Cash & marketable securities $315 Fixed assets $546 Net sales $2520 Earnings Before Interests and Taxes (EBIT) $273 Net Earnings After...
-
Lee Inc. is an American firm that will need to make a payment of 889,000 Australian dollars in 90 days. Currently, the spot exchange rate is USD 0.9377/AUD. The company wants to hedge the transaction...
-
A comet collided with Planet X. Assume that these fragments came from an infinite distance away with zero initial speed and fell into planet x. What was there speed when they arrived at planet x's...
-
What should you do after finishing work with a reagent bottle? Select one or more: Return the bottle to its proper storage location. Close the bottle. Place the bottle in the Solid Waste container....
-
What is the output of the C program shown below? #include int main(void) { int x = 2, y = 3, z = 5; x = x + y; y = y* x; z = x + y; printf("%d and %d and %d ", x, y, z); x = 7 / 2; y = 10 % 4; z = 5...
-
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...
-
Classify the following topics as primarily macroeconomic or microeconomic: 1. The impact of a tax increase on aggregate output. 2. The relationship between two competing firms pricing behavior. 3. A...
-
Use the high and low volatility scenarios that we used for the call option to show that put options also are worth more when stock price volatility is higher.
-
In light of this discussion, explain why the put-call parity relationship is valid only for European options on non-dividend-paying stocks. If the stock pays no dividends, what inequality for...
Study smarter with the SolutionInn App