Audit Live Online Class 1
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44 Terms
Manager are responsible for…
preparation and fair presentation of the financial statements
design, implementation, and maintenance of internal control
Auditor’s responsibilities are defined as
expressing an opinion on the financial statements based on the audit
What are auditors specifically responsible for…
maintaining professional skepticism
complying w/ ethical requirements
exercising professional judgement
obtaining sufficient and appropriate evidence
complying with GAAS
Professional skepticism is defined as…
always having a questioning mind, never taking managers word for it
GAAS stands for…
Generally Accepted Accounting Principles
In order to express an opinion, the auditor obtains…about whether….
reasonable assurance, financial statements are free from material misstatement due to errro or fraud
Reasonable assurance is a…
high, but not absolute level of assurance
Auditors are unable to obtain what type of assurance?
Absolute Assurance, that financial statements are free from material misstatement
What are the inherent limitations of why we cannot obtain absolute assurance…
nature of financial reporting
nature of audit procedures
timeliness of financial reporting & balance b/w cost and benefit