ShatanaBentley-AC410-Auditing-Unit5-Assignment

ShatanaBentley-AC410-Auditing-Unit5-Assignment - Following...

Info iconThis preview shows pages 1–2. Sign up to view the full content.

View Full Document Right Arrow Icon
Following the scientific method in this example, what steps would you as an auditor take to assure you have minimized the potential for audit risk (making a positive evaluation of the firm's financial status when it is in fact negative)? Question: Are the any of the financial statements materially misstated? Background: Review the inherent and control risks of the business to get an in-depth understanding of the business. Assess the level of inherent and control risk and use this to determine the detection risk needed to get an overall audit risk at acceptable level. Plan audit steps to attain the detection risk resulting from preliminary assessment of inherent and control risk. Hypothesis: The financial statements are free of any material misstatements. Hypothesis Test: Conduct tests of controls and tests of transactions and balances to try to disapprove the hypothesis. Concentrate in areas that pose greatest risk (more tests might be needed in some areas than others) based on preliminary assessment of risk areas. If new
Background image of page 1

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full DocumentRight Arrow Icon
Image of page 2
This is the end of the preview. Sign up to access the rest of the document.

Page1 / 2

ShatanaBentley-AC410-Auditing-Unit5-Assignment - Following...

This preview shows document pages 1 - 2. Sign up to view the full document.

View Full Document Right Arrow Icon
Ask a homework question - tutors are online