Question
In relation to materiality principle, determining a
percentage to be applied to a chosen benchmark, would require the exercise of ________┬а on part of the auditor. Refer to the following information to answer the next 4 questions (Q17 to Q20) The word Audit is derived from Latin word тАЬAudireтАЭ which means тАШto hearтАЩ. Auditing is the systematic examination of financial statements, records and related operations to determine adherence to generally accepted accounting principles, management policies and stated requirement. Importance of auditing can be judged from the fact that even those organizations which are not covered by Companies Act get their financial statements audited. It has become a necessity for every commercial and even non- commercial organization. A company appoints an auditor who submits his opinion on the truthfulness and fairness of the financial performance and position of the company. An auditorтАЩs Report is the format of result of all the effort that goes into the audit. Communicating the AuditorтАЩs findings to interested users is part of all audits. Thus, the Final phase of an Audit involves preparing that communication, which is known as auditorтАЩs report.Solution
Professional Judgement is the application of relevant training, knowledge and experience within the context provided by auditing, accounting and ethical standards in making informed decisions about the courses of action that are appropriate in the circumstances of the audit engagement.┬а It is required with respect to Materiality and audit risk, nature, timing and extent (NTE) of audit procedures, evaluating sufficiency & appropriateness of audit procedures, evaluating management judgement in applying applicable FRF and drawing conclusions based on audit evidence
рдЗрдирдореЗрдВ рд╕реЗ рдХрд┐рд╕ рд╡рд╛рдХреНрдп рдореЗрдВ рддреНрд░реБрдЯрд┐ рдирд╣реАрдВ рд╣реИ?┬а
рднрд╡рд┐рд╖реНрдп рдХрд╛рд▓ рдХрд╛ рдХреМрди рд╕рд╛ рд╡рд╛рдХреНрдп рдирд┐рдореНрдирд▓рд┐рдЦрд┐рдд рд╡рд┐рдХрд▓реНрдкреЛрдВ рдХрд╛ рдЙрджрд╛рд╣рд░рдг ...
рдирд┐рдореНрдирд▓рд┐рдЦрд┐рдд рдкреНрд░рд╢реНрди рдореЗрдВ , рдЪрд╛рд░ рд╡рд┐рдХрд▓реНрдкреЛрдВ рдореЗрдВ рд╕реЗ , рдЙрд╕ рд╡рд┐рдХрд▓реНрдк рдХрд╛ я┐╜...
тАШрд╢реНрд░реА рдХреГрд╖реНрдг рдиреЗ рдпреБрдзрд┐рд╖реНрдард┐рд░ рд╕реЗ рдХрд╣рд╛ рдХрд┐ рддреБрдо рдзрд░реНрдо рд╕рдордордд рдХрд╛рд░реНрдп рдХрд░ я┐╜...
рдирд┐рдореНрдирд▓рд┐рдЦрд┐рдд рдореЗрдВ рд╕реЗ рдХрд┐рдирдХреЗ рдирд╛рдо рдкреНрд░рд╛рдпрдГ рдкреБрд▓реНрд▓рд┐рдВрдЧ рд╣реЛрддреЗ рд╣реИрдВ ?
...
рд╡рд┐рд╖реИрд▓рд╛ рдореЗрдВ рдкреНрд░рддреНрдпрдп рд╣реИред┬а
рдирд┐рдореНрдирд▓рд┐рдЦрд┐рдд рдореЗрдВ рд╕реЗ рд╢реБрджреНрдз рд╡рд╛рдХреНрдп рдХрд╛ рдЪрдпрди рдХреАрдЬрд┐рдП-
рдзрд╛рддреБ рдХрд┐рд╕ рдХреЗ рдореВрд▓ рд░реВрдк рдХреЛ рдХрд╣рддреЗ рд╣реИрдВ
'рдХрдард┐рди рдХрд╛рд╡реНрдп рдХрд╛ рдкреНрд░реЗрдд' рдХрд┐рд╕ рдХрд╡рд┐ рдХреЛ рдХрд╣рд╛ рдЬрд╛рддрд╛ рд╣реИрдВ? тАУ
рдирд┐рдореНрдирд▓рд┐рдЦрд┐рдд рдореЗрдВ рд╕реЗ рдХреМрдирд╕рд╛ рд╡рд╛рдХреНрдп рдХрд░реНрддреГрд╡рд╛рдЪреНрдп рдирд╣реАрдВ рд╣реИ ?