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    What are the risks and liability factors in an audit?

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    What are the risks and liability factors in an audit?

    What are the implications to the auditor?

    What are the implications to the organization?

    How can the auditor mitigate these risks and liability factors?

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    https://brainmass.com/business/auditing/what-are-the-risks-and-liability-factors-in-an-audit-298141

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    What are the risks and liability factors in an audit?

    The most important audit risk to the auditors is that they may give an unqualified opinion on the financial statements of a company that are materially misstated. The result could generate lawsuits, serious damage to reputations, or loss of value to stakeholders.

    There is a large body of literature which discusses methods and procedures to try to avoid material misstatement. An auditor cannot possibly examine every transaction for a client for a year in order to determine that there will be no material misstatement. Therefore, procedures are designed to detect errors in an effort to avoid misstatements.

    On the other hand, auditors have to compete for fees in the marketplace, and it is a serious task to determine how to minimize testing and other procedures to formulate a reasonable basis for an opinion.

    What are the implications to the auditor?

    When a financial statement has been issued and is later determined to be materially misstated, the auditor must correct the statements and reissue. Other than possible ...

    Solution Summary

    The 713 word cited solution presents a comprehensive explanation for each of the four questions including practical information that is relevant to the internal practices of audit firms.

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