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Wiley Practitioner's Guide to GAAS 2018, 2nd Edition
book

Wiley Practitioner's Guide to GAAS 2018, 2nd Edition

by Joanne M. Flood
April 2018
Beginner to intermediate content levelBeginner to intermediate
880 pages
28h 54m
English
Wiley
Content preview from Wiley Practitioner's Guide to GAAS 2018, 2nd Edition

AU-C 450 Evaluation of Misstatements Identified during the Audit

AU-C Original Pronouncement

Source Statement on Accounting Standards (SAS) 122.

Definitions of Terms

Source: AU-C Section 450.04

  1. Misstatement. A difference between the amount, classification, presentation, or disclosure of a reported financial statement item and the amount, classification, presentation, or disclosure required for the item to be presented fairly in accordance with the applicable financial reporting framework. Misstatements can arise from fraud or error.

  2. Misstatements also include those adjustments of amounts, classifications, presentations, or disclosures that, in the auditor's professional judgment, are necessary for the financial statements to be presented fairly, in all material respects.

  3. Uncorrected misstatements. Misstatements that the auditor has accumulated during the audit and that have not been corrected.

Objective of AU-C Section 450

AU-C Section 450.03 states that the objective of the auditor is to evaluate the effect of:

  1. Identified misstatements on the audit and
  2. Uncorrected misstatements, if any, on the financial statements

The Nature and Causes of Misstatements

A misstatement may consist of:

  • An inaccuracy in gathering or processing data from which financial statements are prepared
  • An omission of a financial statement element, account, or item, or information required to be disclosed under the applicable financial reporting framework
  • Financial statement disclosures that ...
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Publisher Resources

ISBN: 9781119396482Purchase book