This preview shows page 1. Sign up to view the full content.
Unformatted text preview: needed to develop and support that opinion? The auditor must ﬁrst obtain a thorough understanding of the client, its
business, and its industry. The auditor must understand the risks the client faces,
how it deals with those risks, and what remaining risks are most likely to result mes25435_ch01_001-032.indd 17 26/05/11 9:24 PM Conﬁrming Pages 18 Part 1 Introduction to Assurance and Financial Statement Auditing in a material misstatement in the ﬁnancial statements. Armed with this understanding, the auditor plans procedures that will produce evidence helpful in
developing and supporting an opinion on the ﬁnancial statements.
To understand this process intuitively, consider what ﬁnancial statements
are made of. From your ﬁnancial accounting courses, you know that accounting systems capture, record, and summarize individual transactions. Entities,
must design and implement controls to ensure that those transactions are initiated, captured, recorded, and summarized appropriately. These individual
transactions are grouped and summarized into various account balances, and
ﬁnally, ﬁnancial statements are formed by organizing meaningful collections of
those account b...
View Full Document
This note was uploaded on 12/08/2012 for the course ACCT 564 at Washington University in St. Louis.