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Accounting All-in-One For Dummies, with Online Practice, 2nd Edition
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Accounting All-in-One For Dummies, with Online Practice, 2nd Edition

by Joseph Kraynak
April 2018
Beginner content levelBeginner
768 pages
20h 9m
English
For Dummies
Content preview from Accounting All-in-One For Dummies, with Online Practice, 2nd Edition

Chapter 3

Assessing Audit Risk

IN THIS CHAPTER

check Identifying the three types of risk related to audits

check Brushing up on risk-assessment procedures

check Figuring out the difference between errors and fraud

check 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: 9781119453895Purchase book