ACCT 107 Lecture Notes - Lecture 28: Audit Risk, Audit Evidence, Financial Statement
21 Oct 2020
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Document Summary
According to cas 300, the purpose of planning is to provide for the effective conduct of an audit. This helps to keep costs reasonable, avoid misunderstandings with the client, and to enable the auditor to obtain sufficient appropriate audit evidence. See figure 6-1 for the seven major parts of the audit process. Three main reasons why the auditor should plan the engagement properly: To enable the auditor to obtain sufficient appropriate audit evidence. Essential to minimize legal liability and maintain a good reputation in the professional community. Helps the firm remain competitive and retain its clients. Important for client relations and for facilitating quality work at a reasonable cost. Acceptable audit risk: a measure of how willing the auditor is to accept that the fs may be materially misstated after the audit is completed and an unqualified opinion has been issued materially misstated. Lower audit risk = auditor wants to be more certain that the fs are not.
