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
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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This note was uploaded on 12/08/2012 for the course ACCT 564 at Washington University in St. Louis.