Similarly due to cost considerations and the sheer

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Unformatted text preview: 7 Financial Accounting Standards Board, Statement of Financial Accounting Concepts No. 2, “Qualitative Characteristics of Accounting Information” (CON2). 8 AU 320, Materiality in Planning and Performing an Audit. mes25435_ch01_001-032.indd mes25435_ch01_001-032.indd 15 26/05/11 9:24 PM Confirming Pages 16 Part 1 Introduction to Assurance and Financial Statement Auditing the lower the risk that a misstatement will go undetected and that the auditor will issue an inappropriate report. However, the concept of reasonable assurance means that an auditor could conduct an audit in accordance with professional auditing standards and issue a clean opinion, and the financial statements might still contain material misstatements. A house inspector cannot absolutely guarantee the absence of problems without taking apart a house board by board, which of course is highly impractical. Similarly, due to cost considerations and the sheer impossibility of investigating every item reflected in an entity’s financial statements, the risk t...
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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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