Already have an account? Get multiple benefits of using own account!
Login in your account..!
Remember me
Don't have an account? Create your account in less than a minutes,
Forgot password? how can I recover my password now!
Enter right registered email to receive password!
AUDIT RISK
As we have seen many parties rely on the audit opinion to make decisions, and therefore it is now a well established fact that if the auditor gives an audit opinion that is wrong in some particular then they stand a chance of suffering some damage.
Audit risk therefore could be defined as the chance of damage to the audit firm as a result of giving an opinion that is wrong in some particular. Or put another way, it could be explained as the possibility that financial statements contain material mis-statements which had escaped detection by both an internal control on which the auditor has relied and on the auditor's own substantive tests and other work.
It could be looked at also as: the possibility that the auditor may be required to pay damages to the client or other persons as a consequence of:1. The financial statements containing a mis-statement;2. The complaining party suffering a loss as a direct consequence of relying on the financial statement and 3. Negligence by the auditor in not detecting any reporting on the mis-statement which can be demonstrated.
Damage to the audit firm or the auditor may be in the form of monetary damages paid to the complainant as compensation or simply damage to their reputation with a client or the business community.
All audits involve an element of risk such that however strong the audit evidence and however careful the auditor, there is always a possibility of an error or a fraud going undetected. It is generally known that the auditor who organises his office and staff in a competent manner and follows auditing standards and guidelines is unlikely to be found negligent and to pay damages as a consequence of fraud or error not being discovered by him.
Audit risk can be either normal or higher than normal.
Limitation of Audit Evidence The quantity and quality of evidence is constrained through the following factors as: Absolute proof is not possible; Some assert
General phases of control evaluation are: Phase 1: Understand and document • Understand the client's internal control • Document the understanding of internal control o
audit procedures in business combination conserning Goodwill
QUESTION: (a) The auditor should get relevant and reliable audit evidence sufficient to enable him to draw reasonable conclusions therefrom: (i) What do you understand by
AUDIT RISK As we have seen many parties rely on the audit opinion to make decisions, and therefore it is now a well established fact that if the auditor gives an audit opinion
how to analysis
Banks Features (a) Profit and loss account: When looking at a bank's profit and loss account the accountant should seek to discover what proportions of the bank's profits
Concept of Audit Evidence The auditing is an evidence gathering exercise. It is an exercise continued out to confirm the assertions made through the management in carrying ou
Is an audit 100% guarantee?
Write a paper (may be real or fictional) involving Accounting and business moral dilemmas. The paper should be 13 pages (double spaced) in accordance with APA guidelines. more des
Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!
whatsapp: +91-977-207-8620
Phone: +91-977-207-8620
Email: [email protected]
All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd