RSM423H1 Lecture Notes - Lecture 6: Audit Risk, Matching Principle, Going Concern
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Whether we should take accounting logic in auditing (conflicts) Is the asset pro(cid:271)a(cid:271)le (cid:373)ust (cid:271)e (cid:373)easura(cid:271)le a(cid:374)d a(cid:272)(cid:272)ou(cid:374)ta(cid:271)le. Cas 540 appendix 116: category of misstatements, factual: misstatement for which that has no doubt, projected: projections from the misstatements from the sample to entire population. In insurance, the accounting risk is high, 89% If accounting risk = 0, pmm will be audit risk. m m (consistent with the expected value and ifrs) m: acceptable pmm = 5%, materiality thousand, audit risk = 0, accounting risk for 0 value of asset 2 =1% Asset m: the way to reduce accounting risk is to record proper entries (cid:449)hi(cid:272)h is to use 0 under rbr and m under ifrs. Why ignore: there is a risk but the auditor (cid:449)o(cid:374)"t (cid:272)are a(cid:271)out it (cid:894)if the risk is lo(cid:449) e(cid:374)ough(cid:895) This illustratio(cid:374) is the baitz goi(cid:374)g co(cid:374)(cid:272)er(cid:374) (cid:894)exhi(cid:271)it 5(cid:895) text(cid:271)ook chapter (cid:1005)9.
