You have recently graduated from your university course and start work with an audit firm. You meet an old school friend, Lena, for dinner — you haven’t seen each other for several years. Lena is surprised that you arenow working as an auditor because your childhood dream was to be a flamenco dancer. Unfortunately, your kneeswere damaged in a fall and you can no longer dance. The conversation turns to your work and Lena wants toknow how you do your job. Lena cannot understand why an audit is not a guarantee the company will succeed. Lena also thinks that company managers will lie to you in order to protect themselves, and as an auditor you would have to assume that you cannot believe anything a company manager says to you. Write a letter to Lena explaining the concept of reasonable assurance, and how reasonable assurance is determined. Explain why an auditor cannot offer absolute Explain in the letter to Lena the concept of ‘professional scepticism’ and how it is not the same as assuming that managers are always trying to deceive auditors.
You have recently graduated from your university course and start work with an audit firm. You meet an old school friend, Lena, for dinner — you haven’t seen each other for several years. Lena is surprised that you arenow working as an auditor because your childhood dream was to be a flamenco dancer. Unfortunately, your kneeswere damaged in a fall and you can no longer dance. The conversation turns to your work and Lena wants toknow how you do your job. Lena cannot understand why an audit is not a guarantee the company will succeed. Lena also thinks that company managers will lie to you in order to protect themselves, and as an auditor you would have to assume that you cannot believe anything a company manager says to you. Write a letter to Lena explaining the concept of reasonable assurance, and how reasonable assurance is determined. Explain why an auditor cannot offer absolute Explain in the letter to Lena the concept of ‘professional scepticism’ and how it is not the same as assuming that managers are always trying to deceive auditors.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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You have recently graduated from your university course and start work with an audit firm. You meet an old school friend, Lena, for dinner — you haven’t seen each other for several years. Lena is surprised that you arenow working as an auditor because your childhood dream was to be a flamenco dancer. Unfortunately, your kneeswere damaged in a fall and you can no longer dance. The conversation turns to your work and Lena wants toknow how you do your job. Lena cannot understand why an audit is not a guarantee the company will succeed. Lena also thinks that company managers will lie to you in order to protect themselves, and as an auditor you would have to assume that you cannot believe anything a company manager says to you.
- Write a letter to Lena explaining the concept of reasonable assurance, and how reasonable assurance is determined. Explain why an auditor cannot offer absolute
- Explain in the letter to Lena the concept of ‘professional scepticism’ and how it is not the same as assuming that managers are always trying to deceive auditors.
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