Chapter 4
Discovering Audits
IN THIS CHAPTER
Evaluating information from your client’s management
Considering the four concepts of audit evidence
Putting your knowledge and experience to work
Asking for appropriate evidence
Gathering audit documentation
After finishing risk assessment, as explained in Book 9, Chapter 3, you must understand how to work with your client’s audit evidence and internal controls. Understanding audit evidence and internal controls is particularly important if you’re working with a new audit client. This chapter fills you in on working with audit evidence, and Book 9, Chapter 5 is all about internal controls.
To arrive at an audit opinion, you must look at the info the client gives you — its management assertions — to assess the information’s reliability. This process involves looking at the types of company transactions and the financial statement accounts.
In this chapter, we show you what to look for. You’ll get an explanation of the four concepts of ...
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