ACG 5637 Chapter Notes - Chapter 10: Internal Control, Business Process, Audit Evidence
9 Nov 2020
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Document Summary
The concept of materiality is important to auditors because it has direct impact on the amount of effort auditors must expend during an engagement. Setting materiality requires careful analysis and sound judgement because the auditor"s decisions concerning materiality early in the audit have a direct impact on subsequent testing. Tolerable error is the amount of materiality assigned to individual accounts; it is the amount of error that an auditor can tolerate in a specific account before it is materially misstated. Determining the nature, extent, and timing of substantive testing. If the desired detection risk is low, the auditor will want lots of substantive evidence; if the desired detection risk is high, the auditor may utilize less substantive tests. Appropriateness describes the strength or persuasiveness of audit evidence. These are a few characteristics that the auditor can consider in order to understand the appropriateness of evidence .
