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Because it is not the responsibility of the auditor. The auditor work must be within economic limits.
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What does reasonable assurance mean in audit function?
The key concept is "reasonable" assurance. The auditor does not provide absolute assurance, because this is not attainable due to factors like the need for judgment, the use of testing, the inherent limitations of internal control and the fact that audit evidence is generally persuasive rather than conclusive.
Who Perform operational audit?
internal auditors perform an operational audit as part of their assurance services they render to oganisations.
When does a CPA conduct a review for a private company?
Reviews are performed for privately owned companies when the financial statement user wants some assurance about the statements but do not require the level of assurance provided in an audit.
What are the components audit expectation gap?
Expectation gap caused by unrealistic user expectations such as:1. The auditors are providing complete assurance.2. The auditor is guaranteeing the future viability of the entity .3. An unqualified audit opinion is an indicator of complete assurance.4. The auditor will definitely find any fraud.5. The auditor has checked all transactions.
Provisions of the company act in audit?
The provision of the company act in audit requires that all the companies be audited after a given duration of time.
What does reasonable assurance mean in audit function?
The key concept is "reasonable" assurance. The auditor does not provide absolute assurance, because this is not attainable due to factors like the need for judgment, the use of testing, the inherent limitations of internal control and the fact that audit evidence is generally persuasive rather than conclusive.
What is absolute assurance?
Absolute Assurance is the highest level of assurance an auditor can give, if s/he checks each and every transaction. Therefore, absolute assurance is the level of assurance that can only be given if the auditor does not perform sampling testing. However, because of the time and costs involved, it is not feasible for an auditor to give 100% level of assurance. With much fewer costs and time involved, s/he will be able to provide around 60% level of assurance by providing what is called Reasonable Assurance.
What is the difference between audit and control?
An audit is performed by an outside party; a control is exercised by an internal party. A control provides assurance to management, while an audit provides assurance to outside investors.
What is the goal of an audit?
The objective of an audit is to provide reasonable assurance that an assertion corresponds with a set of specified and established criteria.
Who performs an operational audit?
internal auditors perform an operational audit as part of their assurance services they render to oganisations.
Who Perform operational audit?
internal auditors perform an operational audit as part of their assurance services they render to oganisations.
Why an auditor doesnot gives absolute assurance?
An Auditor cannot give absolute assurance because of the Inherent Limitations of Audit. i.e 1. Work of an auditor is permiated by judgment 2. Most of Audit evidences are persuasive rather than conclusive 3. Audit is of Test Nature 4. Inherent Limitations of Internal Control. Perhaps this is what item 1 means but let me say it anyway- the auditor can be paid off to hide the truth , ignore red flags and make the books look good. Sometimes the pay-off is subtle- the auditor is made aware that the client is important to the firm and that a unfavorable audit would cause the firm to lose the account.
Is an audit engagement and an attest engagement the same in accounting terms?
yes an audit engagement is a type of attest service where you provide assurance on information in the financial statements.
Who perform operation?
internal auditors perform an operational audit as part of their assurance services they render to oganisations.
What are the differences between negative and positive assurance in the context of the external audit and review engagements?
Positive assurance - An affirmative statement or opinion given by the auditor, generally based on a high level of work performed. Negative assurance - A statement indicating that, as a result of performing certain procedures, nothing came to the accountant's attention indicating that the subject matter in question did not meet a specified standard.
What is the purpose of audit working papers?
Audit working papers are used to support the audit work done in order to provide assurance that the audit was performed in accordance with the relevant auditing standards. They show the audit was:Properly planned;Carried out;There was adequate supervision;That the appropriate review was undertaken; & finally and most importantly;That the evidence is sufficient and appropriate to support the audit opinion.
When does a CPA conduct a review for a private company?
Reviews are performed for privately owned companies when the financial statement user wants some assurance about the statements but do not require the level of assurance provided in an audit.
