COMMERCE 4AD3 Chapter Notes - Chapter 1-2: Audit Risk, Financial Statement, Accounting
29 Nov 2017
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Document Summary
Session 1 - intro to auditing roles and. Auditing is the verification of information by someone other than the person providing the information. Audits reduce the risk that decisions will be based on inaccurate information. Auditors provide assurance as to the accuracy of accounting information. Audits lend credibility to information by reducing the information risk, risk that the information is materially misstated. Audits do not directly address business risk, risk that company will not be able to meet financial obligations due to economic conditions or poor management decisions. Audit risk - risk that auditor expresses an inappropriate audit opinion when the financial statements are materially misstated. Reasonable/high assurance can only be gotten when audit risk is low. The worse form of audit risk is failing to detect material misstatements material misstatements. Express an opinion whether the financial statements prepared, in all material respects are in accordance with the applicable financial reporting framework.
