However it is unlikely that the owner of the business

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Unformatted text preview: on. In most situations, the auditor is able to obtain only enough evidence to be persuaded that the assertion is fairly stated. Additionally, for many parts of an audit, the auditor examines only a sample of the transactions processed during the period. Sampling: Inferences Based on Limited Observations LO 7 mes25435_ch01_001-032.indd 16 You might ask why the auditor relies on concepts such as materiality and audit risk in designing an audit. Why not test all transactions that occurred during the period so that audit risk can be driven to zero, even for immaterial misstatements? The main reason is the cost and feasibility of such an audit. In a small 26/05/11 9:24 PM Confirming Pages Chapter 1 An Introduction to Assurance and Financial Statement Auditing 17 business, the auditor might be able to examine all transactions that occurred during the period and still issue the audit report in a reasonable amount of time. However, it is unlikely that the owner of the business could afford to pay for such an extensive audit. For a large...
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