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Case Study : Client Acceptance / Continuation Process

Decent Essays

Chapter 1: Client Acceptance/Continuation Process
Information risk is the risk that the information provided by a company will be materially false. As auditor’s we plan and perform tests on a companies records to determine if they are accurate. We interpret FASB, AICPA, PCAOB, and other authoritative pronouncements to ensure that financial statements are fairly presented. We make judgments about the fairness of complex accounting processes such as inventory valuation and market valuation of securities. Always remember to test a companies system of internal control over financial reporting. And remember to do all of this effectively, efficiently, in a totally unbiased, and professional skeptical manner. Understanding the client-planning …show more content…

If these single source suppliers fail to satisfy requirements on a timely basis at competitive prices, the company could suffer manufacturing delays, a possible loss of revenues, or incur higher cost of sales, any of which could adversely affect the operating results.
Chapter 3: Preliminary Engagement Activities
Audits of the financial statements will include examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used & significant estimates made by management, and evaluating the overall financial statement presentation. Tesla’s investment policy provides guidelines and limits regarding credit quality, investment concentration, investment type, and maturity that they believe will provide liquidity while reducing risk of loss of capital. It is very important to understand the client’s business. The standards require it; the 2nd standard of Fieldwork also requires it. It is necessary in order to plan and perform our work. The auditor is expected to plan and perform an audit that provides reasonable assurance that material misstatements will be detected. Audit documentation should be prepared in sufficient detail to provide a clear understanding of its purpose, source, and the conclusions reached. Two of the most important things though are to validate compliance with PCAOB standards and demonstrate support basis for conclusions on every relevant assertions. Auditors maintain

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