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AUDITING Lecture 4

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Principles of Auditing.

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									AUDITING
 By Atiq ur Rahman
      For MBA
    IM|Sciences
   OBJECTIVES AND
 GENERAL PRINCIPLES
GOVERNING AN AUDIT OF
FINANCIAL STATEMENTS
       ISA 200
MAIN OBJECTIVE IS TO
 ENABLE AUDITOR TO
EXPRESS AN OPINION
OPINION IS GIVEN IN
MATERIAL RESPECTS
AUDITORS’ OPINION IS
 NOT A CERTIFICATE
OF FUTURE VIABILITY
   OF THE ENTITY
GENERAL PRINCIPLES
    OF AUDIT
 The Auditor should comply
     with code of ethics
Auditor should conduct audit
  in accordance with ISAs
GENERAL PRINCIPLES
    OF AUDIT
The Auditor should plan and
     perform audit with
  Professional Skepticism
SCOPE OF AN AUDIT
As an Auditor what can I do
  and what I cannot do?
SCOPE OF AN AUDIT
 What should the client
  expect from me?
REASONABLE ASSURANCE
 Auditor cannot give absolute
          assurance
AUDIT RISK AND MATERIALITY


    To deal with Business Risk is the
    responsibility of management but
   Auditor is concerned only with risks
  that may effect Financial Statements
AUDIT RISK AND MATERIALITY


          The concept of
     “Reasonable Assurance”
    means that there is a risk that
     Financial Statements are
       Materially misstated
AUDIT RISK AND MATERIALITY



   Auditor should plan and perform
   the audit to reduce audit risk to
           acceptable level
AUDIT RISK AND MATERIALITY



   Auditor is responsible for material
   misstatement and not immaterial
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