BUS 426 Lecture Notes - Audit Risk, Engagement Letter, Financial Statement
Document Summary
To see if the financial statements fairly presented and in accordance with gaap. We audit because we want to express an opinion. Provide fair representation in the financial statement. Overall objective of the independent auditor (cas 200) Provide reasonable assurance that there are no material misstatements. Plan and perform audit in accordance with gaas. Intentional: management fraud or fraudulent financial reporting: management trying to trick investors, creditors, etc, employee fraud: theft of company assets, computer fraud: fraud committed on the computer. Illegal acts: for example: company is violating income tax, which has direct-effect on the financial statements: direct-effect: a direct effect on your financial statement, indirect-effect: an indirect effect on your financial statement, ex. Dumping chemical waste into the river, which when found, will change your balance sheet. First ask yourself, am i independent? : different threats to independence. Review: you designed part of the company. Advocacy: when the firm or member is perceived to promote the client"s position.