Special Topics in Accounting Studies

Auditing Unit

Please give “robust” responses! 

  1. It is important for an auditor to have knowledge of the client’s own business and the industry that they’re in.   Please discuss and give an example.
  • One of the General Standards of auditing is that the “..auditor must maintain independence…”.    Discuss the elements of “independence” 
  • The auditor’s opinion is based on “reasonable assurance”.  Explain this and how this differs from “absolute assurance” 
  • A company under audit will hope that the auditors will find their financial statements free of “material misstatement”.  Explain what that means. 
  • Auditors assess (test) a company’s internal controls.  Discuss what that is and how it affects the planning of the audit procedure. 
  • Auditors perform “substantive testing”.   What is substantive testing and which of the ten (10) GAAS standards does it fall under?  

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