The relationship of audit techniques‚ audit procedures and assertions Audit technique - are the basic tool or means employed to obtain audit evidences. Audit procedures - are the application of audit techniques. Assertions – are representation of management as to the fairness of the financial statements. Audit Techniques Audit Procedures Assertions Count Counting of inventory‚ cash securities‚ unmatured‚ promissory note (to establish existence and where applicable‚ ownership
Premium Auditing Financial audit Audit
Ethical (General) Standards Competence – adequate technical training and proficiency. Competence is knowing what to do. 1. Recognize the assertion being made by management in each element (account) of a financial statement. 2. Decide which evidence is relevant for supporting or refusing the assertion 3. Select and perform procedures of obtaining the evidence 4. Evaluate the evidence and decide whether management assertions correspond to reality and GAAP - Objectivity
Premium Auditing Auditor's report Internal control
UVA-F-1357 EBAY INC. (A) Gary Bengier‚ Chief Financial Officer and Vice President of Operations at eBay‚ clicked on the send button as he emailed the week’s financial update to Pierre Omidyar‚ the company’s 31-year old chairman. It was September 15‚ 1998 and Wall Street was still reeling from a summer of severe market volatility. Much of the market’s instability could be traced to bearish worries over a deepening and continuing economic crisis in Asia and other developing markets. Many investors
Premium Stock market Balance sheet Initial public offering
Control environment 9. Risk assessment 10. Monitoring 10-41 Independent Situation Appropriate Audit Report Reason for Report 1. Adverse opinion on internal control over financial reporting PCAOB Standard 2 notes that the presence of a material misstatement not detected by the company’s internal controls is to be considered at least a significant deficiency‚ if not a material weakness for purposes of reporting on internal controls. 2. Qualified or disclaimer of opinion on internal control over financial
Premium Audit Auditor's report Auditing
acceptable audit risk and materiality have on the audit compared to the levels you selected? The levels of acceptable audit risk decide how much evidence to gather during the audit. Lower levels of acceptable audit risk means less tolerant of the misstatement‚ and therefore more substantive tests will need to be done. A low acceptable audit risk requires a high level of audit assurance‚ but more time‚ labor and cost are required.For the accounts are high risky‚ such as those with relatively large size
Premium Accounts receivable Risk Auditing
Chapter 4 Legal Liability for auditors 4-1. Understand litigious environment‚ which CPAs practice According to Google dictionary‚ litigious environment means a controversial environment. Where a simple mishaps can end up in a heavy lawsuit. Under common law‚ audit professionals have the responsibility to their client to fulfill their agreed on contracts. However‚ if one audit fails to fulfill their contract‚ not only they have to take responsibility to their clients but in some circumstances
Free Auditor's report Auditing Legal terms
The Audit Risks Assessment Model and Potential Areas of Improvement By: Patrick S. Fields Fraud and the Creation of Sarbanes-Oxley Following the multitude of fraud scandals in the early 2000’s‚ such as Enron and WorldCom‚ many accounting firms found themselves as part of a thorough investigation to determine what exactly caused the sudden outburst of accounting fraud. As investors and creditors pursued their lost money from the these business failures‚ accounting firms began to garner attention
Premium Auditing Financial audit Risk
Donna Sanders Financial Statement Fraud Week 12 There are many things that can motivate financial statement fraud. Taking a look at Donald Cressey’s hypotheses which is now known as the fraud triangle depicts the certain criteria for the mind frame of the fraudster. The fraud triangle is a theory that consists of perceived pressures‚ perceived opportunity‚ and rationalization. It gives us the different pressures placed on individuals that would make them consider “cooking the books.” It also
Premium Audit Internal control Auditing
Chapter 24 Completing the Audit Review Questions There are four presentation and disclosure-related audit objectives: 24-1 PRESENTATION AND DISCLOSURE-RELATED AUDIT OBJECTIVES Occurrence and rights and obligations Completeness Accuracy and valuation Classification and understandability DESCRIPTION Account-related information as described in the footnotes exists and represents the rights and obligations of the company. All required disclosures are included in the financial statement
Premium Balance sheet Audit Auditor's report
Assurance services - deal with audit or review of historical financial information and assurances dealing with subject matters other than historical financial information. * designed to enhance the degree of confindence of the intended users other than the responsible party about the outcome of the evaluation or measurement of a subject matter against criteria FF. are the broad categories of services under the umbrella of assurance services: 1. Risk assessment 2. Information system reliability
Premium Auditing Financial audit