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Course Details

Auditing Risk Assessment and Materiality (Course Id 2373)

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Author : Andrew Clark, EA
Course Length : Pages: 27 ||| Word Count: 11,576 ||| Review Questions: 6 ||| Final Exam Questions: 10
CPE Credits : 2.0
IRS Credits : 0
Price : $17.95
Passing Score : 70%
Course Type: NASBA QAS - Text - NASBA Registry
Technical Designation: Technical
Primary Subject-Field Of Study:

Auditing - Auditing for Course Id 2373

Description :

Every audit requires planning. Audit planning requires evaluating materiality and risk. Both materiality and risk evaluation require judgement from the auditor because both concepts directly impact the auditor's planned audit evidence. Materiality is important because the auditor provides assurance to financial statement users that the financial statements are free of material misstatements. This requires the auditor to develop a preliminary judgment about materiality when planning the audit, which will provide the basis for that important assurance. In addition, the auditor must consider risk to effectively address the most appropriate risks for each engagement. The auditor's understanding of the entity and its environment, including its internal control, provide a basis for the auditor's assessment of the risk of material misstatement. Using the audit risk model and tolerable misstatement for each account, the auditor determines the audit evidence needed to achieve an acceptable level of audit risk for the engagement.

Usage Rank : 32500
Release : 2024
Version : 1.0
Prerequisites : None.
Experience Level : Overview
Additional Contents : Complete, no additional material needed.
Additional Links :
Advance Preparation : None.
Delivery Method : QAS Self Study
Intended Participants : Anyone needing Continuing Professional Education (CPE).
Revision Date : 24-Sep-2024
NASBA Course Declaration : Participants must complete the final examination within one year of purchase and with a minimum passing grade of 70% or better to receive CPE credit unless otherwise noted on the Course History page (i.e. California Ethics must score 90% or better). After logging in click on the Course History links on your My Courses page for the Begin date and Expire date for the Final Exam.
Approved Audience :

NASBA QAS - Text - NASBA Registry - 2373

Keywords : Auditing, Risk, Assessment, Materiality, cpe, cpa, online course
Learning Objectives :

Course Learning Objectives

At the end of this course, students will be able to:
  • Identify why materiality is important for an audit of financial statements.
  • Make a preliminary judgment about what amounts to consider material.
  • Identify the audit risk model and its components.
  • Recognize the impact of engagement risk on acceptable audit risk.
  • Recognize the relationship of risks to audit evidence.

Course Contents :

Chapter 1 - Auditing Risk Assessment and Materiality

Course Learning Objectives

Introduction

Report title requirements

Audit report address requirement

Introductory paragraph requirements

Scope paragraph requirements

Opinion paragraph requirements

Name of CPA firm requirement

Audit report date requirement

Materiality Defined

Applying Materiality

Materiality Preliminary Judgement

Preliminary Materiality Judgment Factors

Evaluating Materiality

Factors Affecting Materiality

Materiality Guidelines Example

Estimate Misstatement

Audit Risk

Audit Risk Model

Planned Detection Risk

Inherent Risk

Control Risk

Acceptable Audit Risk

Risks in the Audit Risk Model

Assessing Acceptable Audit Risk

Engagement Risk

Acceptable Audit Risk Factors

User Reliance on Financial Statements

Client’s Size

Distribution of Ownership

Nature and Amount of Liabilities

Financial Difficulties After the Audit Report Is Issued

Liquidity Position

Profits or Losses in Previous Years.

Method of Financing Growth

Nature of the Client's Operations

Competence of Management

Evaluating Management Integrity

Audit Risk Decision

Inherent Risk

Inherent Risk Factors

Nature of the Client's Business

Results of Previous Audits

Initial Versus Repeat Engagement

Related Parties

Nonroutine Transactions

Recording Account Balances and Transactions Correctly

Makeup of the Population

Fraudulent Financial Reporting and Misappropriation of Assets

Inherent Risk Decisions

Assessing Inherent Risk

Risk to Evidence Relationship

Audit Risk for Segments

Measurement Limitation

Evidence-Planning Worksheet Example

Risk and Materiality to Evidence

Summary

Addendum - Audit Reports

Review Questions

Glossary

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