How does independence relate to the agency

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Unformatted text preview: the auditor’s work, indicating the auditing standards followed and expressing an opinion as to whether an entity’s financial statements are fairly presented in accordance with agreed-upon criteria (e.g., GAAP). Risk of material misstatement. The pre-audit risk that the entity’s financial statements contain a material misstatement whether caused by error or fraud. Unqualified/unmodified audit report. A “clean” audit report, indicating the auditor’s opinion that a client’s financial statements are fairly presented in accordance with agreed-upon criteria (e.g., GAAP). www.mhhe.com/ messier8e mes25435_ch01_001-032.indd mes25435_ch01_001-032.indd 26 Visit the book’s Online Learning Center for a multiple-choice quiz that will allow you to assess your understanding of chapter concepts. 26/05/11 9:24 PM Confirming Pages Chapter 1 An Introduction to Assurance and Financial Statement Auditing 27 R EVIEW QUESTIONS LO 1 LO 2 LO 2 LO 3 LO 4,5 LO 5 LO 6 LO 7 LO 8 LO 8 LO 9 LO 10 1-1 Why is studying auditing different from...
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