BU547 Lecture Notes - Lecture 2: Financial Statement
Document Summary
Typically, auditors and the entities being audited agree on the criteria well before the audit starts: auditing is the accumulation and evaluation of evidence about information. Explain this process: evidence, the quality and amount of evidence collected depends upon the risks of misstatement, audit strategy: The auditor devises this strategy to effectively plan the evidence-gathering process. Evidence takes many different forms, including oral representation of the auditee (client), written communication with outsiders, and observations by the auditor: certain evidence (from a third party) is considered more reliable than other evidence (from the client). It is important to obtain a sufficient quality and volume of evidence to mitigate the risks of the audit: auditing should be done by a competent, independent person. Explain what they mean by competent and independent (third part of the definition of auditing: the auditor must be qualified to understand the engagement risks and the criteria used.
