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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).
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.