BUS-A 100 Lecture Notes - Lecture 2: Public Company Accounting Oversight Board, Financial Audit, Audit Evidence

• School: IU
• Department: Business
• Course: BUS-A 100
• Professor: Vivian Winston

Document Summary

To (cid:272)o(cid:374)du(cid:272)t a fi(cid:374)a(cid:374)(cid:272)ial audit (cid:373)ea(cid:374)s to (cid:272)arr(cid:455) out a thorough e(cid:454)a(cid:373)i(cid:374)atio(cid:374) of a(cid:374) e(cid:374)tit(cid:455)"s books, records, financial accounts, and policies and procedures. Internal controls: control environment, actions by management, risk assessment, realize risks company faces and steps to control them, control activities, establish procedures, information and communication, monitoring. Procedures manual: promote efficiency, safeguard assets, avoid fraud and errors, keep accounting data accurate. Sampling: random subset of the population in order to form an opinion on the group as a whole. Information gathers by the auditors for their analysis and evaluation. Materiality: size of an error in the financial statements, an error or omission is considered material if it is significant enough to make it probable the decision of a reasonable person would be impacted. Establish public company accounting oversight board (pcaob) Auditors must hold papers for at least 7 years. Independent professional services that improve information quality: ex.