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Unformatted text preview: studying other accounting topics? How might understanding auditing concepts prove useful for consultants, business managers, and other business decision makers? 1-2 Discuss why there is a demand for auditing services in a free-market economy. What evidence suggests that auditing would be demanded even if it were not required by government regulation? 1-3 What is meant by the statement, “The agency relationship between absentee owners and managers produces a natural conflict of interest”? 1-4 Why is independence such an important requirement for auditors? How does independence relate to the agency relationship between owners and managers? 1-5 Define auditing, attest, and assurance services. 1-6 The Committee on Basic Auditing Concepts has provided a widely cited definition of auditing. What does the phrase “systematic process” mean in this definition? 1-7 Define audit risk and materiality. How are these concepts reflected in the auditor’s report? 1-8 Briefly describe why on most audit engag...
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This note was uploaded on 12/08/2012 for the course ACCT 564 at Washington University in St. Louis.

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