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Because of the risk of material misstatement an audit of financial statements in accordance with generally accepted auditing standards should be planned and performed with an attitude of?
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In the US, there is no law requiring that quarterly financial statements be audited. Financial statement audits are extremely expensive and time-consuming, so there should be …some compelling reason for a company to have its financial statements audited. For the typical US company, the expense of having its financial statements audited is probably not worth any benefit it might receive as a result of the audit, and for US nonpublic companies, audits are not required by law. An outsider such as a bank might want to see audited financial statements from a prospective borrower, but even then, audits are so expensive that this would be relatively rare. The company might need another loan just to pay for the audit! However, publicly owned companies (companies that sell shares of stock to the general public), howver, are required by law to have an annual audit of their financial statements by an independent CPA. This is to help protect the public. However, not even publicly owned companies are required to have their quarterly financial statements audited. Only their annual financial statements must be audited. Although public companies must submit quarterly financial report information to the SEC, the first three quarters' financial statements need only be "reviewed" by an independent CPA. A review involves limited testing procedures that are much less in-depth and time-consuming (and expensive) than audit procedures, and this permits the company to submit its financial information to the SEC on a timely basis. However, the fourth quarter report submitted by a public company must include audited financial statements for the entire year.
balance sheet profit and loss acount trail balance cash flow and funds flow ....are the main
Auditing the financial statements of a business is a tedious process, the further the auditor wants to go back, the more difficult it becomes. In order to audit the fina…ncial statements of a company, the auditor has to go through all the financial statements, look at all receipts of moneys earned, spent, invested, etc and compare them to each and every entry to make sure that they match. Providing all accurate receipts, invoices, pay-roll information and other financial information will help make the process much easier and faster.
So that the company will know how much it has made and how much it has in loss and to improve.
When risks of material misstatement due to fraud are identified how should auditors adjust their audit approach?
meaning of material misstatement
Look at it, and if it doesn't make sense, you're in the wrong line of work mate.
Distinguish between generally accepted auditing standard and generally accepted accounting principle?
general standards field work of standards reporting standards
The objective of an http://www.answers.com/topic/audit of http://www.answers.com/topic/financial-statements is to enable the http://www.answers.com/topic/audit to http://www.a…nswers.com/topic/auditor-s-report-1 whether the http://www.answers.com/topic/financial-statements are prepared, in all material respects, in conformity with an identified financial reporting framework such as http://www.answers.com/topic/generally-accepted-accounting-principles-1 (GAAP). Read more: http://www.answers.com/topic/materiality-auditing#ixzz1pBMhOSIE
An audit is considered a risk assessment, therefore these terms are interchangeable. And audit plan can have various meanings, some consider this to be an annual audit plan wh…ich includes all the audits that will occur within a companies calendar year. Others consider this to be the plan for undertaking a specific audit. Its all in how you define the words, audit plan, audit schedule, audit check list.
Some banks require your books to be audited before they will give you a loan
What documentation is not required for an audit in accordance with generally accepted auditing standards?
Which of the following documentation is not required for an
Shareholders, creditors and other stakeholders.
In Tax Audits
In a financial audit, the management of an organization asserts that the financial statements are prepared in accordance with generally accepted accounting principles (GAAP), …the applicable criteria.
Ernst & Young LLP Source: Most recent 10-k
Audits are performed on financial statements in order to: Prevent fraudEliminate errors or mistakes from the bookkeeping process Auditors must also ensure the information …presented is: AccurateReliable and validMeets SEC requirementsAdheres to GAAPConforms to tax lawsPasses industry regulationsDiscloses any events relevant to shareholders
To know if it is within the standard and to know the correctness of them.
In the US, Generally Accepted Auditing Standards (US GAAS) are 10 principles developed by the American Society of Certified Public Accountants (AICPA). These standards provide… the criteria (ground rules) for conducting every audit in such a way that the CPA conducting the audit is able to properly express an opinion on a client's financial statements and give reasonable assurance to users of those statements about whether (or not) the statements fairly present the company's financial condition in all material respects. Among other things, GAAS requires that an auditor must: have adequate technical training and proficiency, exercise due professional care, and maintain independence, in order to properly perform any audit. There are additional US GAAS standards that apply to Fieldwork (the actual planning and performance of the audit) and Reporting (statements that the auditor must include in any report the auditor issues about the audited financial statements). A more detailed statement of US GAAS principles is readily available online. Think of GAAS as the "competence/thoroughness/quality" standards that apply to every financial statement audit. For publicly-owned companies, US GAAS also includes any auditing standards issued by the SEC. Audit procedures, however, are the individual steps, the nuts-and-bolts procedures and tests used to verify account balances and other management assertions during a given audit. These procedures are planned by the auditor and outlined in an audit program, which gives the audit team a "roadmap" to follow for this particular audit. Although GAAS requires very few specific audit procedures (or else documented justification by the CPA of why any required procedure was omitted, and of what procedure was done instead to make up for it), in general, GAAS doesn't concern itself with testing what is on a given client's financial statements. That is where auditing procedures (aka audit testing procedures) come into play. Auditing procedures are those tests and procedures used to test this client's actual account balances, and/or to gain knowledge of and test the design and effectiveness of this client's internal control. In any given audit engagement, it is generally up to the auditor's professional judgment to select the most appropriate auditing procedures in order to reasonable satisfy himself that the client's financial statements fairly present the client's true financial condition. The auditor must always follow GAAS, but he has a good deal of latitude in choosing which auditing procedures he will perform. One example of an auditing procedure is a confirmation requested from an outside party; this is used to see whether the client's records match those of an outside third party. For example, the auditor might send a confirmation form to the client's customers, asking them to verify the amounts the client says they owe. This tests the accuracy of the client's reported Accounts Receivable, and is also a way to test for possible fictitious sales reported by the client on its financial statements. A second (and very important) audit procedure is to observe the client's inventory count at the financial statement year-end date. This procedure is used to test for the existence of the inventory, and the reasonableness of the value at which the client has reported it. Some audit procedures are designed to determine those areas in which the client has a well-designed and effective internal control system over the recording of financial information in its accounting records (and therefore in its financial statements). Other audit procedures are designed to directly test the amounts on the financial statements (account balances). Still other procedures involve ratio analysis and other analytical procedures to identify unusual relationships between related account balances and reasonableness of estimated amounts. Some procedures can accomplish more than objective.