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8 Answer is not complete. a. Evaluating the effectiveness of the client's internal control in preventing or detecting misstatements Risk assessment O Materiality b. Obtaining an understanding of the client's business and industry. Risk assessment X Planning and supervision C. Acknowledging that the risk of failing to detect a material misstatement cannot be reduced to zero. Audit evidence Materiality X Reasonable assurance d. Obtaining confirmations from the client's customers as to the ending balances in accounts Audit evidence receivable. e. Preparing a written audit plan. Planning and supervision Designing audit procedures to identify misstatements that would have a significant effect on financial statement users' decisions. Considering the likelihood that the account balance contains a material misstatement. Materiality X Planning and supervision g. Risk assessment O Audit evidence O Materiality Failing to detect material misstatements because of audit team mistakes and misinterpretations in h. evaluating evidence. Audit evidence X Risk assessment

8 Answer is not complete. a. Evaluating the effectiveness of the client's internal control in preventing or detecting misstatements Risk assessment O Materiality b. Obtaining an understanding of the client's business and industry. Risk assessment X Planning and supervision C. Acknowledging that the risk of failing to detect a material misstatement cannot be reduced to zero. Audit evidence Materiality X Reasonable assurance d. Obtaining confirmations from the client's customers as to the ending balances in accounts Audit evidence receivable. e. Preparing a written audit plan. Planning and supervision Designing audit procedures to identify misstatements that would have a significant effect on financial statement users' decisions. Considering the likelihood that the account balance contains a material misstatement. Materiality X Planning and supervision g. Risk assessment O Audit evidence O Materiality Failing to detect material misstatements because of audit team mistakes and misinterpretations in h. evaluating evidence. Audit evidence X Risk assessment

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Auditing and Assurance Services

 

Can you help me identify which of the performance principles of GAAS apply to each of these? I am not sure what I am missing.

 

Thanks!

X Answer is not complete. O Materiality X Planning and supervision a. Evaluating the effectiveness of the client's internal control in preventing or detecting misstatements. Risk assessment b. Obtaining an understanding of the client's business and industry. Risk assessment Acknowledging that the risk of failing to detect a material misstatement cannot be reduced to zero. Audit evidence X Materiality X Reasonable assurance C. Obtaining confirmations from the client's customers as to the ending balances in accounts d. Audit evidence receivable. e. Preparing a written audit plan. Planning and supervision Designing audit procedures to identify misstatements that would have a significant effect on financial statement users' decisions. Considering the likelihood that the account balance contains a material misstatement. f. Materiality X Planning and supervision g. Risk assessment X Audit evidence X Materiality Failing to detect material misstatements because of audit team mistakes and misinterpretations in evaluating evidence. h Audit evidence X Risk assessment
Transcribed Image Text:X Answer is not complete. O Materiality X Planning and supervision a. Evaluating the effectiveness of the client's internal control in preventing or detecting misstatements. Risk assessment b. Obtaining an understanding of the client's business and industry. Risk assessment Acknowledging that the risk of failing to detect a material misstatement cannot be reduced to zero. Audit evidence X Materiality X Reasonable assurance C. Obtaining confirmations from the client's customers as to the ending balances in accounts d. Audit evidence receivable. e. Preparing a written audit plan. Planning and supervision Designing audit procedures to identify misstatements that would have a significant effect on financial statement users' decisions. Considering the likelihood that the account balance contains a material misstatement. f. Materiality X Planning and supervision g. Risk assessment X Audit evidence X Materiality Failing to detect material misstatements because of audit team mistakes and misinterpretations in evaluating evidence. h Audit evidence X Risk assessment
Identify how each of the following statements relates to the performance principle by considering which element(s) of the principle are related to that statement. (A statement may be related to more than one element.) Use the following elements in providing your response: Reasonable assurance Planning and supervision Materiality • Risk assessment Audit evidence a. Evaluating the effectiveness of the client's internal control in preventing or detecting misstatements. Risk assessment Materiality Risk assessment Planning and supervision b. Obtaining an understanding of the client's business and industry. c. Acknowledging that the risk of failing to detect a material misstatement cannot be reduced to zero. Audit evidence Materiality Reasonable assurance d. Obtaining confirmations from the client's customers as to the ending balances in accounts receivable. Audit evidence e. Preparing a written audit plan. Planning and supervision Designing audit procedures to identify misstatements that would have a significant effect on financial f. statement users' decisions. Planning and supervision Materiality g. Considering the likelihood that the account balance contains a material misstatement. Risk assessment Audit evidence Materiality h. Failing to detect material misstatements because of audit team mistakes and misinterpretations in Audit evidence Risk assessment evaluating evidence.
Transcribed Image Text:Identify how each of the following statements relates to the performance principle by considering which element(s) of the principle are related to that statement. (A statement may be related to more than one element.) Use the following elements in providing your response: Reasonable assurance Planning and supervision Materiality • Risk assessment Audit evidence a. Evaluating the effectiveness of the client's internal control in preventing or detecting misstatements. Risk assessment Materiality Risk assessment Planning and supervision b. Obtaining an understanding of the client's business and industry. c. Acknowledging that the risk of failing to detect a material misstatement cannot be reduced to zero. Audit evidence Materiality Reasonable assurance d. Obtaining confirmations from the client's customers as to the ending balances in accounts receivable. Audit evidence e. Preparing a written audit plan. Planning and supervision Designing audit procedures to identify misstatements that would have a significant effect on financial f. statement users' decisions. Planning and supervision Materiality g. Considering the likelihood that the account balance contains a material misstatement. Risk assessment Audit evidence Materiality h. Failing to detect material misstatements because of audit team mistakes and misinterpretations in Audit evidence Risk assessment evaluating evidence.
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