ACCO 450 Study Guide - Final Guide: External Auditor, Internal Control, Audit Risk
7 Dec 2018
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Document Summary
Verification of information by someone other than one providing it. Used to reduce risk that decision based on accounting information will e inaccurate. Enhance degree of confidence of intended users in f/s through auditor verifications. Accountability relationship in which there are three distinct parties. Independent assertion of f/s to lend credibility to them. If managers unchecked, use more resources than optimal and incentive to report misleading info about performance to owners. Difference between what auditor provides and what public expects auditor to provide. Significant conditions, events, circumstances, actions which might adversely affect entity"s ability to achieve objectives and execute strategies. F/s will fail to appropriately reflect economic substance of business activities, including business risk and uncertainties. Risk that material misstatement will remain undiscovered after audit is complete. Uncertainty and judgement involved in certain accounting records & transactions. Amount of misstatement which is likely to affect decision making of users. Internal auditors independent from management, but report to vp finance.
