Assessing Materiality and Risk Simulation

Assessing Materiality and Risk Simulation - Simulation 1...

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Simulation 1 Assessing Materiality and Risk Simulation University of Phoenix Samantha Bradley, Nicole Hamilton, Marie Bennwitz, Jennifer Dickey, and Jason Noorani ACC/491 April 4, 2011 Professor S. Alarcon, Jr.
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Simulation 2 There are certain accounts that are particularly important to the audit process and must be audited 100%: cash, lines of credit, and intangibles. These accounts are chosen to be audited at 100% because the risk of material misstatement or fraud is the highest. Also these particular accounts are normally composed of a few transactions that are easy to verify so they do not take that much time to audit fully. Normally the accounts that are the most important to the particular industry are the accounts that are audited 100%. The notion of materiality is important in the perspective of auditing. Materiality is a function of the time, the situation, and the people involved. Materiality is allocated only to those accounts that are sampled because the accounts that are audited 100 percent do need to have
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This note was uploaded on 04/17/2011 for the course ACCOUNTING 490 taught by Professor Santos during the Spring '11 term at University of Phoenix.

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Assessing Materiality and Risk Simulation - Simulation 1...

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