The relationship of audit techniques‚ audit procedures and assertions Audit technique - are the basic tool or means employed to obtain audit evidences. Audit procedures - are the application of audit techniques. Assertions – are representation of management as to the fairness of the financial statements. Audit Techniques Audit Procedures Assertions Count Counting of inventory‚ cash securities‚ unmatured‚ promissory note (to establish existence and where applicable‚ ownership
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SOLUTIONS FOR REVIEW CHECKPOINTS 1.1 Business risk is the collective risk faced by a company that engages in business. It encompasses all threats to and organization’s goals and objectives. It includes the chance that customers will buy from competitors‚ that product lines will become obsolete‚ that taxes will increase‚ that government contracts will be lost‚ or that employees will go on strike. 1.2 The conditions of complexity‚ remoteness‚ time-sensitivity‚ and consequences increase demands
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provisions of IPC are not applicable to the doctors unless or until there is rashness or gross negligence. The following Sections of IPC are related to medical profession (2): Sec. 304-A Deals with death caused by a negligent act. Sec. 336-338 Deals with causing hurt by rash or negligent act. Section 304 and 304-A There is lot of discrepancy while applying these sections in cases of professional negligence by doctors and drivers. Most of the times‚ the police authorities register cases of professional
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AUE303R/101/3/2013 Tutorial letter 101/3/2013 ADVANCED THEORY OF AUDITING AND THE PERFORMING OF THE AUDIT PROCESS AUE303R Semesters 1 & 2 Department of Auditing IMPORTANT INFORMATION: This tutorial letter contains important information about your module. CONTENTS Page 1 2 2.1 2.2 3 3.1 3.2 3.3 4 4.1 4.2 4.3 5 6 7 8 8.1 8.2 8.2.1 8.2.2 8.3 8.4.1 8.4.2 8.4.3 8.4.4 9 10 11 12 13 14 INTRODUCTION .........................................................................................
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Ethical (General) Standards Competence – adequate technical training and proficiency. Competence is knowing what to do. 1. Recognize the assertion being made by management in each element (account) of a financial statement. 2. Decide which evidence is relevant for supporting or refusing the assertion 3. Select and perform procedures of obtaining the evidence 4. Evaluate the evidence and decide whether management assertions correspond to reality and GAAP - Objectivity
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provide a estimation on the efficiency & effectiveness of internal controls. Auditors must evaluate the risk of material misstatement for each assertion. Per Section 404 of the Sarbanes-Oxley Act‚ management and auditors both hold certain obligations on reporting the internal control of the company. Tesla may have internal controls in place to reduce the risk of material misstatement in their financial documents. But‚ the power & efficiency of these controls must be
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Control environment 9. Risk assessment 10. Monitoring 10-41 Independent Situation Appropriate Audit Report Reason for Report 1. Adverse opinion on internal control over financial reporting PCAOB Standard 2 notes that the presence of a material misstatement not detected by the company’s internal controls is to be considered at least a significant deficiency‚ if not a material weakness for purposes of reporting on internal controls. 2. Qualified or disclaimer of opinion on internal control over financial
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Trina Rios could be found negligent by having a water spill on the floor. However‚ the factors of the time frame‚ that the spill was open and obvious‚ and that Trina did not know of the spill could remove her negligence. Additionally‚ Karen Logan was contributorily negligent here‚ absolving Trina of any negligence claim. Negligence To be negligent‚ the condition of defendant’s property must present an unreasonable risk of harm to people on the property. Here‚ the puddle of water in the middle
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acceptable audit risk and materiality have on the audit compared to the levels you selected? The levels of acceptable audit risk decide how much evidence to gather during the audit. Lower levels of acceptable audit risk means less tolerant of the misstatement‚ and therefore more substantive tests will need to be done. A low acceptable audit risk requires a high level of audit assurance‚ but more time‚ labor and cost are required.For the accounts are high risky‚ such as those with relatively large size
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1. The final responsibility for the integrity of an SEC registrant’s internal controls lies on the management team. U.S. companies need to refer to a comprehensive framework of internal control when assessing the quality of financial reporting to determine that financial statements are being presented under General Accepted Accounting Principles‚ GAAP. The widely used framework is referred as COSO‚ Committee of Sponsoring Organizations of the Treadway Commission‚ sponsored by the following organizations
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