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mes27084_ch04_108_140 - REVISED PAGES CHAPTER 4 LEARNING...

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LEARNING OBJECTIVES Upon completion of this chapter you will RELEVANT ACCOUNTING AND AUDITING PRONOUNCEMENTS CON2, FASB Statement of Financial Accounting Concepts No. 2, Qualitative Characteristics of Accounting Information AICPA, Assessing and Responding to Audit Risk in a Financial Statement Audit (Audit Guide) (New York: AICPA, 2006) AU 120, Defining Professional Requirements in Statements on Auditing Standards AU 311, Planning and Supervision AU 312, Audit Risk and Materiality in Conducting an Audit AU 314, Understanding the Entity and Its Environment and Assessing the Risks of Material Misstatement AU 316, Consideration of Fraud in a Financial Statement Audit AU 318, Performing Audit Procedures in Response to Assessed Risks and Evaluating the Audit Evidence Obtained AU 326, Audit Evidence AU 329, Analytical Procedures AU 330, The Confirmation Process AU 339, Audit Documentation AU 342, Auditing Accounting Estimates PCAOB, Rule 3100: Compliance with Auditing and Related Professional Practice Standards PCAOB Auditing Standard No. 3, Audit Documentation (AS3) PCAOB, Proposed Auditing Standards Related to the Auditor’s Assessment of and Response to Risk, PCAOB Release No. 2008-006 (October 21, 2008) [1] Understand the relationship between audit evidence and the auditor’s report. [2] Know management assertions about classes of transactions and events for the period under audit, assertions about account balances at the period end, and assertions about presentation and disclosure. [3] Know why audit procedures are performed. [4] Learn the basic concepts of audit evidence. [5] Know the audit procedures used for obtaining audit evidence. [6] Understand the reliability of the types of evidence. [7] Understand the objectives of audit documentation. [8] Develop an understanding of the content, types, organization, and ownership of audit documentation. CHAPTER 4
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109 T his chapter covers the third of the three fundamental audit concepts introduced in Chapter 1: audit evidence. Audit evidence is all the infor- mation used by the auditor in arriving at the conclusions on which the audit opinion is based, including the information contained in the accounting records underlying the financial statements and other information. In Chapter 1, we indicated that auditing is essentially a set of conceptual tools that guide an auditor in collecting and evaluating evidence regarding others’ assertions, and we assured you that these conceptual tools are extremely useful in a variety of settings. We encourage you to keep this perspective in mind as you study Chapter 4. While this chapter does contain some lists you will likely want to commit to memory (e.g., management assertions and char- acteristics of audit evidence), remember that these are not just lists—they constitute powerful conceptual tools that can help you in almost any setting that requires you to collect and evaluate evidence. Understanding the nature and characteristics of evidence is fundamental to effective auditing and is a key part of the conceptual tool kit we hope to help you acquire as you go through this book.
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mes27084_ch04_108_140 - REVISED PAGES CHAPTER 4 LEARNING...

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