Lesson 7

Lesson 7 - Name: Jay Patadia Enrollment Number: 688430...

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Name: Jay Patadia Enrollment Number: 688430 Course Number: ACCT 3222Z Lesson 7 7-2 Discuss how the terms likelihood and magnitude play a role in evaluating the significance of a control deficiency. Control deficiency- exists when the design or operation of a control does not allow management or employees, in the normal course of performing their assigned functions, to prevent or detect misstatements on a timely basis • Likelihood of an event is a "reasonable possibility" if it is either reasonably possible or probable • Likelihood is broke down into two categories "remote" or "reasonably possible or probable" • Magnitude is broke down into three categories "not material or significant", "not material but significant" or "material". 7-8 A walkthrough involves tracing a transaction through the information system. What types of evidence does a walkthrough provide to the auditor? It helps the auditor in confirming his or her understanding of control design and transaction process flow, as well as in determining whether all points at which misstatements could occur
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Lesson 7 - Name: Jay Patadia Enrollment Number: 688430...

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