Purchase Solution

Planning and Performing an Audit

Not what you're looking for?

Ask Custom Question

Once a company conducts its internal audits, an outside auditor is often engaged to review and determine, with reasonable assurance, if the company has complied with the relevant standards and appropriate requirements. At the start of every audit, auditors need to begin the engagement planning process as well as properly plan the audit, evaluate the integrity of management, and determine materiality. Discuss and evaluate the concept of materiality in the engagement planning process. Discuss how materiality translates to a company's financial-statement assertions and account balance assertions.

Purchase this Solution
Solution Summary

The expert examines planning and performing an audit for internal audits. How materiality translates to a company's financial-statement assertion and account balance assertions are determined.

Solution Preview

Concept of Materiality
Materiality is a concept or convention in auditing and accounting relating to the importance of an account, transaction and discrepancy. The concept of materiality recognizes that some matters are important for fair presentation of financial statements with standard accounting principles (Beasley & Carcello, 2008). The main objective of an audit of financial statements is to enable the auditor to convey an opinion regarding financial statements whether they follow identified financial reporting framework or not. The representation in the auditor's standard report regarding fair presentation indicates the auditor's belief that the financial statements taken as a whole are not materially misstated.
Evaluation of Materiality
In order to obtain reasonable assurance about financial statements and whether they are free from material misstatement, an audit procedure is important. In that, the auditor develops a plan and performs auditing to detect misstatements individually and combined with other misstatements. It would result in material misstatement of the financial statements (Crawford & Loyd, 2008). So, it is important to alert while planning and performing audit procedures for misstatements ...

Purchase this Solution
Free BrainMass Quizzes
Employee Orientation

Test your knowledge of employee orientation with this fun and informative quiz. This quiz is meant for beginner and advanced students as well as professionals already working in the HR field.

Organizational Behavior (OB)

The organizational behavior (OB) quiz will help you better understand organizational behavior through the lens of managers including workforce diversity.

SWOT

This quiz will test your understanding of the SWOT analysis, including terms, concepts, uses, advantages, and process.

Motivation

This tests some key elements of major motivation theories.

Academic Reading and Writing: Critical Thinking

Importance of Critical Thinking

View More Free Quizzes
Related BrainMass Solutions

  • External Audit

    501044 External Audit Describe the process of performing an external audit in an organization implementing strategic planning for the first time.

  • three stages of an audit

    It discusses the three stages of an audit in which analytical procedures are performed. It also identifies one of the stages and discusses the purposes of performing analytical procedures. References are included in the solution.

  • Auditor's responsibility

    290489 Auditor's responsibility What is the auditor's responsibility with regard to errors, fraud, and illegal acts in audit planning? What is the auditor's responsibility with regard to errors, fraud, and illegal acts in audit planning?

  • preliminary analytical procedures

    The fourth element of the audit planning is to communicate with those whose activities are being audited and others who are performing the audit.

  • Dodd, CPA, audited Adams Company's financial statements

    The additional procedures Hall should consider performing during the planning phase of this audit that would not be performed during the audit of a continuing client may include the following: 1.

  • (Analytical procedures) In audit planning the audit of Circuits Technology, Inc. (CTI). CTI

    319644 Audit planning the audit of Circuits Technology In audit planning, the audit of Circuits Technology, Inc. (CTI).

  • Study Guide Questions on Auditing

    e. the account balance level and the transaction level. 2) Materiality at the account balance level is stated in planning an audit because: a. some users make decisions based upon individual account balances.

  • Auditing Standards and auditing procedures

    The calculations and analyses generated by the steps listed sets the tone of the audit and assists in planning the overall audit, so if mistakes are present on behalf of the auditor, it definitely is an issue.

  • Conducting an Audit Plan

    The next step of planning the conduct of an audit would be to identify the audit scope.

View More Related Solutions