and Objectives
Chapter 6
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Applicable
Financial
Opine reporting
statements
framework
Communicate
Financial
Report per audit
statements
standards
2012 Prentice Hall Business Publishing, Auditing 14/e, Arens/Elder/Beasley 6 - 10
Auditors Responsibilities
Material Reasonable
misstatements Assurance
Professional
Errors vs. Fraud
Skepticism
Fraudulent
reporting
vs.
theft of assets
2012 Prentice Hall Business Publishing, Auditing 14/e, Arens/Elder/Beasley 6 - 11
Auditors Responsibilities for
Discovering Illegal Acts
Type Responsibility
Same for
Direct-Effect errors and
fraud
Indirect-Effect No Assurance
Auditor knows
Consider effects on financial
statements
Consider effect on relationship
with management
Communicate with audit
committee or equivalent
2012 Prentice Hall Business Publishing, Auditing 14/e, Arens/Elder/Beasley 6 - 13
Learning Objective 4
Capital acquisition
and repayment cycle
Inventory and
warehousing
cycle
2012 Prentice Hall Business Publishing, Auditing 14/e, Arens/Elder/Beasley 6 - 17
Learning Objective 5
Completeness
Valuation or
allocation
Rights and obligations
Presentation and
disclosure
Existing transactions
Completeness
are recorded
Recorded transactions
Accuracy are stated at the
correct amounts
2012 Prentice Hall Business Publishing, Auditing 14/e, Arens/Elder/Beasley 6 - 25
General Transaction-related
Audit Objectives
Transactions are included
Posting and
in the master files and
summarization
are correctly summarized.
Rights and
Assets must be owned
obligations