BUS 426 Chapter Notes - Chapter 6: Strategos, Internal Audit, Audit Risk

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According to cas 300, the purpose of planning is to provide for the effective and efficient conduct of an audit: to minimize audit risk while performing an efficient audit. Enable the auditor to obtain sufficient appropriate audit evidence. Set materiality and assess acceptable audit risk and inherent risk. Develop overall audit strategy and assess control risk and audit program. Risk of material misstatement: the risk that the financial statements are materially misstated prior to audit, this is a given that the auditor must assess (risk assessment phase) Acceptable audit risk: a measure of how willing the auditor is to accept that the financial statements may be materially misstated after the audit is completed and an unqualified opinion has been issued (risk response phase) Before accepting an engagement, the auditor should perform a thorough client investigation: business environment, the organization, and the people.

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