Audit Chapter 1 A Summary of Introduction to Audit

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Accounting & Financial Management
AFM 201
Alan Mc Naughton

Chapter 1Audit societiesextensive monitoring of economic activities to help assure that capital markets are efficientAuditing the verification of information by someone other than the one preparing the informationRisk associated with financial statementsinformation riskThird party auditorindependent verification of the information provided by second partythree party accountabilityAccountability relationshipsmanagement is accountable to the users users do not trust management sufficiently to rely on financial statements o Users Management AuditorAccounting o Complexity o Remoteness o ConsequencesFinancial reportingstatements of financial positionConflict of interestdemand for audit servicesAuditorlend credibility providing assurance and assurance engagementExternal auditor Clientpays the feeAuditeeactual designation of the company whose financial statements are being audited Auditingsystematic process of objectively obtaining and evaluating evidence regarding assertions about economic actions etc communicating results to usersObjective of auditexpress an opinion whether the financial statements present fairly in all material respects the financial position results of operation and cash flows in accordance with GAAPBusiness riskresults
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