a) The risk of the auditor "getting it wrong" or giving opinions that are not 100% accurate will always be present and this is referred to as audit risk. Audit risk is better understood when the components of the risks are understood. Identify and explain the three components of audit risk. b) The concept of materiality is fundamental when conducting an audit. An auditor makes an opinionated expression on the fair representation of financial statements with regard to all things material. Explain 3 items which best describe the nature of materiality.

a) The risk of the auditor "getting it wrong" or giving opinions that are not 100% accurate will always be present and this is referred to as audit risk. Audit risk is better understood when the components of the risks are understood. Identify and explain the three components of audit risk. b) The concept of materiality is fundamental when conducting an audit. An auditor makes an opinionated expression on the fair representation of financial statements with regard to all things material. Explain 3 items which best describe the nature of materiality.

Auditing: A Risk Based-Approach (MindTap Course List)

11th Edition

ISBN:9781337619455

Author:Karla M Johnstone, Audrey A. Gramling, Larry E. Rittenberg

Publisher:Karla M Johnstone, Audrey A. Gramling, Larry E. Rittenberg

Chapter7: Planning The Audit: Identifying, Assessing, And Responding To The Risk Of Material Misstatement

Section: Chapter Questions

Problem 11CYBK

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