Audit chapter 1

Take-overs, lucky draws, religious, social, environmental. academic, circulation, management, compliance

NOT 100% correct:

1. sample testing

2. Certain items on FS based on judgement

3. evidence is persuasive

4. There are inherent limitations to ICS (policies)

5. If fraud is well planned, auditors cannot catch without sus activities

Not confirm going concern/viable

1. Provide objective opinion on credibility of FS

2. Point out weaknesses in ICS

3. Good for bank borrowing

4. minimize misunderstandings (sleeping partners)

5. make sure assets are not stolen

6. Reduce disputes for profit related remuneration

1. expensive and cannot quantify benefits

2. disrupt normal biz ops

1. Auditor responsible for not finding out frauds

2. that there is no fraud

3. That they check all transactions

4. Audits are free from error

5. Entity is going concern after audit

Externally: Provide proper education to the public about auditors job

Internally:

1. Provide proper training

2. staff rotation

3. employees declare if they have any affiliation before audit

4. Client pay outstanding fees before audit begin

5. resources of updates laws

6. different staff for audit n non audit

7. 2 partner to check high risk firms

8. firm is not more than 10% of income

9. non audit service is non significant

10. screen clients before taking on