Auditing chapter 3 quizlet

A company's management has the responsibility for preparing the company's financial statements and related disclosures.
The company's outside, independent auditor then subjects the financial statements and disclosures to an audit.
This standard establishes general requirements for documentation the auditor should prepare and retain in connection with engagements conducted pursuant to the standards of the Public Company Accounting Oversight Board ("PCAOB").

Rating 5.0 (2) a.
A written planning memorandum explaining the auditors' understanding of the client's business.
b.
A written client consent to discuss audit matter with

What are the requirements for auditing of internal control?

,requires the auditor of a PUBLIC company to attest to management's report on the effectiveness of internal control over financial reporting,requires the auditing of internal control to be integrated with the audit of financial statements

You can do a separate or combined report

What happens when an auditor is retained to audit financial statements?

When an auditor has been retained to audit the financial statements of an entity, the auditor contacts the predecessor auditor to obtain information about matters that may affect the conduct of the audit and to review the prior year audit documentation

Why do auditors need to plan a financial audit?

The auditor is required to plan the audit to provide REASONABLE assurance that errors, fraud, and direct effect illegal acts, which materially misstate the financial statements, will be detected

Inherent risk and control risk (also called environmental risks) are functions of the client and its environment, while detection risk is not

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