ACCT3322 Chapter Notes - Chapter 3: Audit Risk, Audit Evidence, Going Concern
Document Summary
3. 1 explain the different phases of an audit. 3. 2 relate the process used in gaining an understanding of the client. 3. 6 evaluate how a client"s information technology (it) can affect risk. 3. 7 demonstrate how client closing procedures can affect reported results. Identified so that the auditor may consider whether those customers have a good reputation, are on good terms with the client and are likely to pay the client on a timely basis. If a client has only one or a few customers this risk is increased: major suppliers. Identified to determine whether they are reputable and supply quality goods on a timely basis. If client is not well positioned to adjust to changes, it risks falling behind competitors and losing market share, which in the longer term can affect the going concern assumption: warranties. Interested in the amount of debt funding relative to equity, the use of different forms of shares and the differing rights of shareholder groups.
