14AU-C 450 Evaluation of Misstatements Identified during the Audit

SCOPE

The auditor must evaluate the effect of identified misstatements and uncorrected misstatements. AU-C 450 provides guidance on the evaluation. AU-C 700 and AU-C 703 address the auditor's responsibility to form an opinion based on the audit evidence obtained. (AU-C 450.01)

DEFINITIONS OF TERMS

Source: AU-C 450.04. For definitions related to this standard, see Appendix A, “Definitions of Terms”: Misstatement, Uncorrected misstatements.

OBJECTIVE OF AU-C 450

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

    (AU-C Section 450.03)

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 an amount or disclosure, including inadequate or incomplete disclosures and omission of disclosures required to meet disclosure objectives of financial reporting framework
  • Financial statement disclosures that are not ...

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