Management and Organizational Studies 3363A/B Chapter Notes - Chapter 4: External Auditor, Audit Evidence, Financial Statement

• School: Western University
• Department: Management and Organizational Studies
• Course: Management and Organizational Studies 3363A/B
• Professor: Michelle Loveland

Document Summary

The objective of conducting an audit of financial statements. ), and the audit is conducted by an independent auditor. Managements responsibility: preparation and fair presentation of f/s, adoption of sound accounting policies, provide auditor with required information and unrestricted access to obtain audit. Material v. immaterial misstatements: auditors are responsible for detecting material misstatements, misstatements are considered material if the combined uncorrected errors and fraud in the f/s would likely have influenced the decisions of users of the f/s. Intentional misapplication of accounting principles: misappropriation of assets a fraud involving the theft of an entity"s assets, note fraud is more difficult to detect because it is more hidden. Illegal acts: refers to violation of a law or government regulation by the entity, or by employees acting on the entity"s behalf. Indirect effect refers to when complying with the laws and regulations is fundamental to the operating aspects of the organization: auditor is only required to,