Acct 4420 Chapter 7 new

Acct 4420 Chapter 7 new - Acct4420 Chapter7AuditEvidence

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Acct 4420 Chapter 7 Audit Evidence
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Chapter 7 Audit Evidence The purpose of an audit is to express an opinion on whether management’s assertions in the financial statements are in accordance with GAAP. Financial  Statements Underlying  Accounting Data Corroborating  Information Example: Journals Ledgers Schedules and/or Worksheets Example: Documents (checks, invoices) Confirmations Observations Chapter 7 page 2
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Gathering Evidence The evidence gathering process is the core of the audit, evidence is needed to Reduce audit risk Support the opinion Because each audit is unique, there is no set amount or type of evidence that must be gathered. Chapter 7 page 3
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Gathering Evidence  continued When considering the best approach to gather evidence, the auditor needs to consider factors affecting the reliability of the financial data: Management integrity Client economic risk Quality of client’s information system Client’s control structure Current market conditions and competitor actions Chapter 7 page 4
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Types of Audit Evidence Direct, personal knowledge External evidence Mix of External and Internal Internal Verbal and written representations Most persuasive Least persuasive Chapter 7 page 5
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This note was uploaded on 09/20/2011 for the course ACCT 4420 taught by Professor Franz during the Spring '11 term at Toledo.

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Acct 4420 Chapter 7 new - Acct4420 Chapter7AuditEvidence

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