Planning Materiality and Tolerable Misstatement

A discussion of the impact on the misstatement of the company's financial statement. What was the effect on the balance sheet, income statement, and company cash flow? How might this affected stakeholders. perception of the company? From 1996 to 2006, Tyco violated various federal securities laws by the means of using inopportune accounting methods that involved transactions that had no economic substance; therefore, the overstatement of their financial results by at least one billion dollars…

.... 3 SFAS 165 and SUBSEQUENT EVENTS………….……………………………......... 3-4 AUDITOR RESPONSIBILITY...…………………………………..………………........5 AUDIT PLANNING MEMORANDA……………………………………….…......... 5-7 AV IMPORTS AND EXPORTS PLANNING MEMORANDUM…………...............7-13 ENGAGEMENT SCENARIOS………………………………………………...........13-14 REFERENCES…………………………………………………………….………... 15-16 Audit Planning Report It is very important for an accounting system to have strong internal controls. In fact, today’s accounting systems encompasses…

CHAPTER 3 RISK ASSESSMENT AND MATERIALITY Answers to Review Questions 3-1 Audit risk is the risk that the auditor may unknowingly fail to appropriately modify the opinion on a set of financial statements that are materially misstated. Engagement risk is the exposure to loss or injury to professional practice from litigation, adverse publicity, or other events arising in connection with financial statements audited and reported on. In simple terms, audit risk is the risk that an auditor will…

AUDIT AND ASSURANCE SERVICES (INTERNATIONAL STREAM) Lecture 2 Audit Planning and Risk Assessment DATE: December 2012 TUTOR: Feroza Cooper ISA 300 AUDIT PLANNING Auditors should plan the audit so that the engagement is conducted in an effective manner. The objectives of planning include:- • Directing appropriate attention to the different areas of the audit such as assessing materiality, so that when the detailed audit plan is prepared, audit procedures can…

Introduction The concept of materiality provides a topic for continuing educational discussion that many firms across the country find essential to the development of their audit staff. Measuring and using materiality to obtain desired results during an audit becomes the responsibility of the staff member of a CPA firm. Partners and managers of a firm typically allow the staff member to use his/her judgment when applying this concept during the fieldwork of an audit. The overall success of an…

that breach, and lastly is to determine whether the losses were an equitably foreseeable consequence of the defendant’s actions. CONTENTS Negligent misstatement refers to a representation of fact that been carelessly made, which is relied on the plaintiff to their advantages (O’Riordan, 2007, p.1). In 1964, the tort of negligent misstatement has been established and it has gained more recognition in this decades. It covers opinions and reality statements made by negligence. However, the tort…

ais Contents Introduction 1 Relevance and reliability overview 1 The balance between relevance and materiality 2 Balancing relevance and reliability 2 The balance between flexibility and timeliness 3 Conclusion 3 Introduction Conceptual framework is a coherent system of interrelated objective and fundamentals that is expected to lead to consistent standards (Degaan 2007). There are four items in conceptual framework which are objective of financial reporting, qualitative characteristics…

Audit Manual Excerpt: Materiality Guidelines-- Planning Materiality and Tolerable Misstatement Planning Materiality This section provides general guidelines for determining planning materiality and tolerable misstatement for audits performed by Willis & Adams. The application of these guidelines requires professional judgment and the facts and circumstances of each individual engagement must be considered. Statement of Financial Accounting Concepts No. 2, “Qualitative Characteristics of Accounting…

based approach. This planning memorandum was prepared according to the envisaged audit strategy and is based on cumulative audit knowledge and experience, as well as important matters which have been brought to the attention of the auditors. During the planning process an understanding of the functioning of the department was obtained, including how it is organized and managed, and how it processes accounting and other information. It should be noted that the planning of an audit is a continuous…

courts. Craig won, the company was held accountable for damages, and she received back pay, return to work, and an order barring Y & Y from taking negative action against her in the future (Paul, 1998). Sexual harassment in the workplace is not tolerable in spite of the power issues or the stimulus. The harasser must be regimented for the harassment in a way that directly communicates in no indecisive terms that such actions will not be tolerated. To avoid sexual harassment's expensive penalty and…