3 types of misstatements
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A: Since you have posted a question with multiple sub-parts, we will solve first three subparts for…
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A: Ans. There are various kinds of assertions which needs to be checked while auditing. Some of the…
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A: Service Industry:-As the name suggests, it is the industry which deals in services only, although it…
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A: Audit expectation gap: The expectation gap is the difference among the actual and real roles and…
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A: Audit: It can be defined as the examination and inspection of the company’s financial statements.
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A: A financial statement is said to have a substantial misrepresentation if it contains information…
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A: Assertions are criteria that assess the accurate and fair portrayal of financial statements in the…
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A: Summary. Types of Subsequent Events for Auditors:Recognized Subsequent Events: Events that provide…
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A: Answer:- Inherent risk meaning:- The risk created by a financial statement inaccuracy or omission…
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A: The objective of audit is to give opinions on financial statements deals with whether the financial…
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Q: Financial audit Q&A What is the risk that arises because the auditor is unable to find misstatements…
A:
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Q: Once risks are identified, auditors assess the risk of material misstatement at the _______ level…
A: Solution: Once risks are identified, auditors assess the risk of material misstatement at the…
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A: audit evidence shows the information data that is collected by auditor to make their conclusion on…
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Q: Assume that you are an auditor of a company. Explain any THREE categories of assertions that you…
A: While auditing financial statements of an entity the auditor is required to make assertions at…
Q: In a financial statement audit, inherent risk represents a. The risk that misstatements could occur…
A: In financial and managerial accounting, Inherent risk is that the risk expose by a slip-up or…
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A: Solution: - Where the auditor conduct an audit, At the time of conduct the audit auditor should…
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A: To find the incorrect option as,
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A: Bartleby's Guideline: “Since you have posted a question with multiple sub-parts, we will solve first…
Q: STATEMENT 1: Most of the auditor's work in formulating an opinion on financial statements consists…
A: ●STATEMENT 1: Most of the auditor's work in formulating an opinion on financial statements consists…
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A: Auditor independence is important in adding value to the financial statements for a number of…
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A: Auditing implies an exhaustive and formal review of your records. Auditors give extraordinary…
Q: The risk that the financial statements are materially misstated prior to audit refers to the risk of…
A: A material misstatement is a misstatement in the financial statements that could reasonably be…
Q: Auditors use evidence to help them draw conclusions Select one: True False
A: Auditing is a process in which a detailed examination of accounting records is carried out by the…
Q: What are the two main assurance level or engagements that auditors can perform for their clients…
A: When an auditor gives an assurance it means that the auditor is offering its opinion with regards to…
Q: TRUE OR FALSE. AUDITING 1. Financial statement users need to have an understanding of both the…
A: “Since you have posted multiple questions, we will provide the solution only to the first three…
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- Define the term "materiality" as it pertains to financial reporting. What is the difference between the auditor's use of materiality during the audit planning stage and throughout the audit final review stage?The auditor should consider audit risk when planning and performing an audit of financial statements. Audit risk should also be considered together in determining the nature, timing, and extent of auditing procedures and in evaluating the results of those procedures. Required: a. Define audit risk. b. Describe the components of audit risk (e.g., inherent risk, control risk, and detection risk). c. Explain how these components are interrelated. (AICPA, adapted)Elaborate the difference between material effect of misstatement and pervasive effect of misstatement and its effect on audit opinion on the financial statements. Also explain 5 instances of both pervasive effect of misstatement and material but not pervasive effect of misstatement on financial statements (assume necessary details).
- {Auditing} 8. One of the duties of an auditor is to prepare an audit plan for the smooth conduct of audit with due care and to detect fraud and errors. What other duty an auditor is expected to perform from options given below: a. Suggests changes in financial statements, if necessary b. Responsible to form opinion c. All the options d. To certify about the accuracy of financial statement1-From the options given below which of the document is included by an auditor in the audit documentation? a. Oral explanation by auditor b. Complete notes c. Superseded draft of financial statements d. Previous copies of documents rectified for mistakesFinancial Audit Q&A Questions Answer Risks that may occur during assertion testing, but cannot be prevented due to the lack of time. Reports that need to be prepared to find out if there are significant changes in the client. The parties reported by the auditor are related to the results of the audit reports made. Terms that must be included in the document prepared by the client. Inspection activities to ensure the shipping or Destination Point in the recording of the financial statements is correct in accordance with the fragments. The auditor needs to know that the ending balance recorded in the financial statements is appropriate based on evidence of transactions in the company. The audit assertion underlying the vouching procedure. The audit assertion underlying the tracing procedure. The risk caused by the sample taken by the Auditor does not describe the characteristics of the data from the entire data population. The risk that arises because the auditor is unable to find…
- A(n) ________ is the detailed instruction that explains the audit evidence to be obtained during the audit Select one: a. audit program b. audit procedure c. audit assertion d. audit objectiveAudit procedures are takes performed by the internal auditors and the auditee to gather the evidence required achieve audit objectives . Select one a. False b. TrueCHOOSE THE BEST ANSWER Auditing is a systematic process by which a competent, independent person objectively obtains and evaluates evidence regarding assertions about economic actions and events to ascertain the degree of correspondence between the assertions and established criteria an communicating the results thereof to interested users. The objective obtaining and evaluating of evidence describe that the auditor A. Examining the bases for the assertions ( representations) and judiciously evaluating the results without bias or prejudice either for or against the individual (or entity) making the representations B. The auditor must be qualified to understand the criteria used and the competence to know how and what evidence to accumulate to reach the proper conclusion C. These are standards against which the assertions or representations are judged. This must be specific rules prescribed by a legislative body, budgets and other measures of performance set by management D. The…
- Question 10 When an auditor is reviewing an audit client's allowance for doubtful accounts the auditing is assessing which management assertion about the client's accounts receivables. Existance Completeness Valuation Rights and obligationsSTATEMENT 1: Audit working papers are the documents accumulated by the auditor showing the procedures performed, audit testing applied, information obtained, and conclusions reached. STATEMENT 2: Audit working papers aid the auditor in the conduct and supervision of the audit engagement. A. Only Statement 1 is incorrect B. Only Statement 1 is correct C. Both statements are incorrect D. Both statements are correctTRUE OR FALSE: AUDITING 1. The less extensive the evidence-gathering procedures the lower the chances of formulating appropriate conclusion and the higher the level assurance that a practitioner can provide. 2. The concepts and principles on auditing and assurance introduce students to the theories underlying auditing services and provides opportunities to develop technical expertise in applying the concepts learned 3. The practitioner is required to pursue any matter which may lead to a material adjustment or modification to the subject matter of information 49. An independent auditor may participate in preparing financial statements including accompanying notes. 5. Nature of financial reporting involves preparation of financial statements based on the management’s judgment in applying an applicable financial reporting framework through coordination with the external auditor