M2 Day 1 Overview of Attestation

M2 Day 1 Overview of Attestation - Agenda Announcements(5m...

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Unformatted text preview: Agenda Announcements (5m) Quiz (10m) maybe/maybe not Lecture Attestation Overview (30m) Discuss Module 2 Project (10m) Agenda Announcements (5m) Quiz (10m) maybe/maybe not Lecture Attestation Overview (30m) Discuss Module 2 Project (10m) Overview of Attest Process What did you learn in Module 1? What is assurance? When is assurance potentially valuable? What are the cornerstones of high quality assurance? Independence Professional Skepticism Next step: Attestation Written assertions and verification procedures A Preview of Module II Overview of the attestation process Models related to f/s auditing Traditional audit risk model Strategic systems auditing (SSA) model Application: SSA Case M2 Project The Attest Process Goals of Attest Engagements Effectiveness reasonable assurance that no material misstatements in assertions exist Efficiency low-cost route to effectiveness Defensible Documentation alerts supervisors to high-risk areas Litigation protection: subpoena is possible PCAOB Auditing Standard #3: Not documented not done Basics Attestation requires considerable unstructured & professional judgment with respect to: Materiality Risk Assessment Evidence Acquisition and Evaluation MATERIALITY Judgment: What is material? A material difference is a difference that could affect the decisions of a party using the financial statements. Depends on decision makers and decision criteria. Can be asymmetric What is material to the company (hitting a benchmark) may be immaterial to an investor or vice versa Can depend on reason for deviation Materiality may be different for fraud compared to errors Materiality Example...
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This note was uploaded on 11/14/2011 for the course ACC 453 taught by Professor Grenier during the Spring '11 term at Miami University.

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M2 Day 1 Overview of Attestation - Agenda Announcements(5m...

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