[Planning] Auditing의 내재적 한계, Materiality, Types of Misstatements

■Materiality = 틀려도 봐줄 수 있는 최대 금액 크기

■ Auditing의 내재적 한계

 ○ Reasons that an auditor only obtains reasonable, and not absolute assurance that financial statements are free from material misstatements are

① Nature of Financial Reporting

-It involve judgemnet by management or subjective decisions.

② Nature of Auditing Procedures

- The possibility that management or others may not provide the complete information.

- Collusion or Fraud

- An Auditor는 강제 수사력이 없음.

③ Cost and Benefit

 

■ When setting the preliminary judgemnet about the Materiality, What would An Auditor most likely consider?

○ "Income before tax" (O)

○ "The dollar amount of asset based on annualized interim financial statements." (O)

 

■ The concept of materiality would be least important to an auditor when considering the "Effects of a direct financial interest in the client on the CPA's independence".(O)

 

■ Types of Misstatatements