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Accounting All-in-One For Dummies
book

Accounting All-in-One For Dummies

by Ken Boyd, Lita Epstein, Mark P. Holtzman, Frimette Kass-shraibman, Maire Loughran, Vijay S. Sampath, John A. Tracy, Tage C. Tracy, Jill Gilbert Welytok
March 2014
Beginner to intermediate
744 pages
18h 7m
English
For Dummies
Content preview from Accounting All-in-One For Dummies

Chapter 3

Assessing Audit Risk

In This Chapter

arrow Identifying the three types of risk related to audits

arrow Brushing up on risk-assessment procedures

arrow Figuring out the difference between errors and fraud

arrow Acting on your audit-risk results

This chapter introduces you to two important auditing concepts: audit risk and materiality. Audit risk is the chance that you won't catch a major mistake in the financial statements. Materiality refers to whether the mistakes you find are classified as significant or insignificant — in other words, as material or immaterial. A material amount is large enough to possibly influence the conclusions drawn by the person reading the financial statement.

These concepts are fundamental; you'll look to both as you plan the audit and implement the steps you decide to use during the audit. You'll also consider them as you evaluate the results of all your hard work to form an opinion about the fairness of your client's financial statements. These concepts are so important that the auditor's standard report refers to both.

Assessing audit risk is your phase-two responsibility ...

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Publisher Resources

ISBN: 9781118813652Purchase book