Beruflich Dokumente
Kultur Dokumente
Homework
For Chapter 4 & 5
Independent audit reports are of great significance to the senior managers of the unit; may be
existing shareholders, investors are considering whether to invest in the unit or not; organizations
and individuals that are or will lend capital; related state management agencies ... Anyone who
needs an honest and objective voice about the financial statements they are interested in needs an
Independent auditing is not a miracle to turn a distorted, unprofitable financial report into a
beautiful glittering financial report with perfect indicators. How the financial situation of the unit
will be recorded by the independent auditor. Financial statements are made by publishers and
independent auditors that do not modify their numbers and words in their financial statements.
In some cases, the independent auditing of financial statements is a mandatory regulation of the
state management agency, also aimed at protecting the rights of readers of financial statements.
Audit failure: happened when the auditor issues an incorrect audit due to the auditing standards
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Homework – Chapter 4 & 5 07/25/2019 Group 6
Audit risk: the possibility that the auditor concludes after that the financial statements were fairly
Why is there at least some level of audit risk on every audit engagement?
When auditing we must choose the method. This process is through selecting a number of samples
and based on the results of the evaluation of those selected samples to draw conclusions for the
Second, any financial audit is limited by factors such as time, cost, limited resources, management
or limits from the auditor. Auditors and auditing companies cannot fully check on all
Third, audit risks related to business risks. Businesses all face business risks. Auditing risk is a
business risk that auditing companies must consider while providing auditing services.
Thus, deriving from the above reasons, we can see the importance of the classification of risk
levels and audit risk assessment in the audit process. A good audit risk assessment will help
proper accounting and auditing planning, ensuring a full collection of credible evidence for
Question 5-3: How does the prudent person concept affect the liability of the auditor?
the prudent person concept states that A person is obliged to perform reasonable and diligent care
in fulfilling obligations with others. Therefore, the auditor expects to conduct an audit by using
timely care, but does not claim to be a guarantor or insurance company of financial statements.
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Homework – Chapter 4 & 5 07/25/2019 Group 6
A legal protection auditor is an auditor who declares that the customer does not perform certain
obligations and that the customer does not perform such obligations has caused the damage
claimed.
by the auditor when he or she claims the client or user also had a responsibility in
the legal case. An example is the claim by the auditor that management knew of
the potential for fraud because of weaknesses in internal control, but refused to
correct them. The auditor thereby claims that the client contributed to the fraud
Successful defense is used by auditors when they require customers or users to also be responsible
in legal proceedings.
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Homework – Chapter 4 & 5 07/25/2019 Group 6