Bus 426 - Lecture 1.docx

4 Pages

Business Administration
Course Code
BUS 426
Michael Favere- Marchesi

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Lecture 1 5 Components of Auditing i. Quantifiable Information ii. Criteria: Example, GAAP iii. Evidence Gathering + Evaluate: Evidence that supports the financial statement iv. Independent, Competent Person: Makes sure no biases v. Reporting: Must report our findings Audit is the accumulation (Gathering evidence part) and evaluation of evidence about information by an independent and component person to determine and report on the degree of correspondence between the information and a set of established criteria Accounting = Recording, Classifying, Summarizing economic events Auditing = Examination of accounting information Public Accountants are people who do the auditing  Public because they have the public’s trust Auditing occurred because of: i. Owners from the remoteness of information ii. Biases and incentives of information provider iii. Voluminous Data iv. Complex Transactions v. Cost/Benefit Auditing reduces the information risk, therefore increasing auditing demand Legal requirement as well for public companies, therefore increasing demand Assurance Services are professional services where the auditor issues a report on the reliability (free of material misstatements) of an assertion (a claim, usually existence) made by another party Assurance Services Non Assurance Services Attestation Services (Highly structured) Audit (positive assurance, The goal of an audit is to provide reasonable, but not absolute, assurance that financial statements are fairly presented in accordance with GAAP.) Review (negative assurance, The goal of a review is to provide limited assurance that financial statements do not have any known errors or departures from the accounting rules found in GAAP) Reports on effectiveness of internal control over financial reporting Information Technology Webtrust (Websites) Systrust (Information Systems, is the system reliable for processing data) Non-Attestation Services A/R Review Business Risk Assessment Comfort Letter is a document prepared by an accounting firm assuring the financial soundness or backing of a company Customer Satisfaction Survey used for balance scorecard Information System Security Review Internal Audit Outsourcing Tally Count of Oscar Voting Client Hires Auditor
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