INSTRUCTOR MANUAL FOR j j
Auditingj&jAssurancejServicesjAjSystematicjApproachj12ejMessier
Chapterj1
AnjIntroductionjtojAssurancejandjFinancialjStatementjAuditing
InternetjAssi
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Reviewj Discussionj
LearningjObjectives jChoicejQ Problems thWear
Questions Cases
uestions Mini-
Casesj(EWMC)
LOj1-
1:jUnderstandjwhyjstudyingjaudit
ingjcanjbejvaluablejtojyoujwhethe
1 29 30
rjorjnotjyoujplanjtojbecomejanjau
ditor,jandjwhyjitjisjdifferentjfromj
studying
accounting.
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2:jUnderstandjthejdemandjforjaud
2,3,4 13,14,20 24,25 29
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auditorsjandjauditjservices.
LOj1-3:jKnowjthejbasic
definitionjofjajfinancialjstatementjau 5,6 13,14,15,16 25
dit.
LOj1-
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7 17,18 25
conceptsjthatjunderliejfinancialjst
atement
auditing.
LOj1-5:jUnderstandjwhy
samplingjisjimportantjinjanjaudit. 8
LOj1-
6:jBejablejtojdescribejthejbasicjfi EWMC
nancialjstatementjauditingjproces
9,j10 17,19,20 26
sjandjthejphasesjinjwhichjanjaudit
jisjcarriedjout.
LOj1-
7:jKnowjwhatjanjauditjreportjisja 11 21,22,23 27,28
ndjunderstandjthe
naturejofjanjunqualifiedjreport.
LOj1-
8:jUnderstandjhowjtechnologyjan
djauditjdatajanalyticsjarejchangin
gjauditsjinjexcitingjways.
LOj1-9:jUnderstandjwhyjauditing
demandsjlogic,jreasoning,jandjresou 12 30
rcefulness.
NOTE:jReferencesjtojauditingjstandardsjinjthejinstructorjmanualjfollowjajsimilarjconventionjtojthatjfollowedjinjth
ejtext:jAICPAjstandardsjwilljbejreferencedjbyjclarifiedjAUjsectionjandjPCAOBjstandardsjwilljbejreferencedjbyjAud
itingjStandardj(AS)jnumber.
15-1
Copyrightj©j2022jMcGrawjHilljEducation.jAlljrightsjreserved.jNojreproductionjorjdistributionjwithoutjthejpriorjwrittenjconsentjofjMcGrawjHillj
Education.
,ENDjOFjCHAPTERjMATERIALSjCOMPARISONjCHART
Number Number
Comparison
inj11thjedition inj12thjedition
1-1 Unchanged 1-1
1-2 Unchanged 1-2
1-3 Unchanged 1-3
1-4 Unchanged 1-4
1-5 Unchanged 1-5
1-6 Revised 1-6
1-7 Unchanged 1-7
1-8 Unchanged 1-8
1-9 Unchanged 1-9
1-10 Unchanged 1-10
1-11 Unchanged 1-11
1-12 Unchanged 1-12
1-13 Unchanged 1-13
1-14 Unchanged 1-14
1-15 Unchanged 1-15
1-16 Unchanged 1-16
1-17 Unchanged 1-17
1-18 Unchanged 1-18
1-19 Unchanged 1-19
1-20 Unchanged 1-20
1-21 Unchanged 1-21
1-22 Unchanged 1-22
1-23 Unchanged 1-23
1-24 Unchanged 1-24
1-25 Revised 1-25
1-26 Revised 1-26
1-27 Unchanged 1-27
1-28 Unchanged 1-28
1-29 Unchanged 1-29
1-30 Unchanged 1-30
Whenjstudentsjenterjthejfirstjintroductoryjclass,jtheyjseldomjunderstandjwhatjassurancejorjauditingj
entails.jGenerally,jtheyjwilljnotjhavejreadjChapterj1jbeforejclass,jsojit‘sjimportantjtojspendjthejtimej
necessaryjduringjthejfirstjclassjtojcapturejstudents‘jattentionjandjstimulatejtheirjinterestjinjauditing.
15-2
Copyrightj©j2022jMcGrawjHilljEducation.jAlljrightsjreserved.jNojreproductionjorjdistributionjwithoutjthejpriorjwrittenjconsentjofjMcGrawjHillj
Education.
,Introduction
Afterjgoingjoverjthejclassjexpectations,jwejspendjthejfirstjpartjofjclassjdiscussingjandjillustratin
gjthejdemandjforjauditingjandjthejrolejofjauditingjinjsociety.jIfjstudentsjarejtojbejinterestedjandjexcit
edjtojdigjinjandjlearnjthisjdauntingjnewjmaterial,jtheyjneedjtojbejconvincedjthatjitjisjimportantjandjus
eful.jThus,jwejalsojemphasizejthatjthejconceptsjunderlyingjauditingjarejusefuljinjmanyjcontextsjoth
erjthanjauditing,jincludingjconsultingjandjmanagement.
Laterjinjthejclass,jwejmightjaskjthejstudentsjhowjtheyjwouldjauditjthejautomobilejrevenuesj(sayj
$100jbillion)jofjajlargejautomobilejmanufacturer.jWejtelljthemjthatjeachjcarjandjtruckjhasjanjinvoice
jonjthejwindowjandjinjthejcompany'sjcomputerjsystem,jandjthatj8jmillionjcarsjandjtrucksjwerejsold.j
Wejthenjaskjthemjhowjmanyjinvoicesjoutjofj8jmillionjtheyjwantjtojexaminejinjorderjtojverifyjthej$1
00jbillionjofjrevenuesjinjthejfinancialjstatements.jOfjcourse,jyoujwilljgetjsomejoutlandishjanswersj(
e.g.,j400,000jinvoices).jWejeventuallyjtelljthemjthatjyoujmayjnotjlookjatjanyjinvoicesjandjthatjyouj
mayjrelyjsolelyjonjthejcompany‘sjinternaljcontrolsjinjconjunctionjwithjajcarefuljratiojanalysisjorjoth
erjtypejofjanalyticaljprocedure.jThisjtypejofjexamplejquicklyjgetsjthejstudents'jattentionjthatjauditin
gjinvolvesjajsubstantialjamountjofjjudgmentjandjcommonjsense.
[LOj1-1]jTipsjforjLearningjAuditing
Wejspendjajfewjminutesjonjthisjsectionjemphasizingjthejdifferencesjbetweenjthejstudyjofjaccou
ntingj(whichjtheyjarejveryjfamiliarjwith)jandjthejstudyjofjauditingj(whichjtheyjarejnot).j Wejtryjtojm
akejsurejtheyjunderstandjwhatjauditingjfocusesjonjandjhowjitjisjmuchjmorejconceptualjthanjtheirjoth
erjaccountingjcourses.jWejintroducejthejideajofjaj―tooljkit‖jandjhowjitjrelatesjtojwhatjwejwilljbejco
veringjduringjthejcourse.
[LOj1-2]jThejDemandjforjAuditingjandjAssurance
Wejspendjajreasonablejamountjofjtimejduringjthejfirstjlecturejdiscussingjwhyjtherejisjajdemandjf
orjauditingjandjassurancejservices.jManyjstudentsjthinkjthatjthejdemandjforjauditingjisjdrivenjbyjthe
jrequirementsjofjthejSecuritiesjlaws.jItjisjimportantjthatjthejstudentsjhavejsomejbasicjunderstandingj
ofjthejagencyjrelationshipjthatjleadsjtojthejdemandjforjauditing.jFigurej1-
1jprovidesjajgoodjframeworkjforjthisjdiscussion.jWejthenjbringjinjhowjthejCPAjfitsjthisjneedjwithjth
ejqualitiesjofjindependence,jintegrity,jandjobjectivity.jSometimesjwejdojrole-
plays,jaskingjstudentsjtojcomejtojthejfrontjofjthejroom.jOnejisjsellingjajcar,jwhilejthejotherjisjinterest
edjinjbuyingjit.jWejletjthemjdiscussjtheirjconcerns,jwhatjinformationjtheyjwant,jwhatjthejincentivesj
ofjthejtwojpartiesjare,jwhatjinformationjasymmetriesjmightjexist,jetc.jWejthenjtiejthisjscenario,jwhic
hjmostjstudentsjarejsomewhatjfamiliarjwithjorjatjleastjcanjrelatejto,jbackjtojthejideajofjthejdemandjfo
rjauditing.
UsejFigurej1-1
15-3
Copyrightj©j2022jMcGrawjHilljEducation.jAlljrightsjreserved.jNojreproductionjorjdistributionjwithoutjthejpriorjwrittenjconsentjofjMcGrawjHillj
Education.
, AnjAssurancejAnalogy:jThejCasejofjthejHousejInspector
Sometimesjitjisjdifficultjforjstudentsjtojgraspjthejtheoreticaljperspectivejofjthejrolejaccountingja
ndjauditingjplayjinjthejprincipal-
agentjrelationship,jsojwejusejajpracticaljanalogyjtojaidjtheirjunderstanding.jWejgojoverjhowjajhousej
inspectionjisjsimilarjtojajfinancialjstatementjauditjincludingjwhojthejplayersjarejandjhowjtheirjrolesjr
elatejtojwhatjwejjustjdiscussed.jWejaskjthejstudentsjwhatjisjsimilarjandjdifferentjbetweenjthejhouseji
nspectionjandjthejfinancialjstatementjauditjbeginningjwithjTablej1-
1.jLastly,jwejaskjthejstudentsjforjotherjexamplesjofjassurancejservicesjandjagainjtryjtojrelatejthejspe
cificsjofjeachjtojthejcharacteristicsjlistedjinj Tablej1-1.
UsejTablej1-1
Wejthenjintroducejthejconceptjofj―managementjassertions‖jbyjaskingjthejstudentsjwhatjspecifi
cjassertionsjthejcompanyjisjmakingjaboutjspecificjfinancialjstatementjitemsj(forjexample:jcashjorjin
ventory).jTheyjusuallyjcanjcomejupjwithjthejmostjobviousjones:jexistence,jfairlyjandjaccuratelyjrec
orded,jandjalljitemsjarejincluded.jTheyjmightjneedjtojbejpushedjforjsomejofjthejothers.jTheyjmayjals
ojfailjtojdistinguishjbetweenjassertionsjinj termsj ofj accountj balancesj andjassertionsjinjtermsjofjtran
sactions.jItjisjusefuljtojhelpjthemjunderstandjthejdifferencesjbetweenjassertionsjforjtransactionsjandj
balancesjbutjalsojhowjtheyjarejrelated.jThenjwejaskjthemjhow,jasjanjauditor,jyoujmightjgojaboutjcoll
ectingjevidencejonjthejcashjaccount,jbringingjinjwhatjassertionsjarejmostjimportantjandjwhy.jWejlik
ejtojemphasizejthejdifferencesjbetweenjassertionsjaboutjthejaccountjbalancejatjthejendjofjthejperiodj
andjthejtransactionsjpostedjtojthejaccountjduringjthejperiod,jrelatingjthesejconceptsjtojeachjotherjan
djtojthejideajofjriskjfromjanjauditjperspective.
UsejTablej1-2
Next,jwejtalkjaboutjwhatjelsejthejprospectivejinvestorjwouldjwantjtojknowjbesidesjthejqualityjof
jmanagement‘sjassertions.jFinally,jwejrelatejalljofjthisjbackjtojTablej1-
1.jProblemj24jcouldjbejcoveredjhere.
[LOj1-4]jFundamentaljConceptsjinjConductingjajFinancialjStatementjAudit
Injthisjsection,jwejdiscussjexamplesjofjthejfundamentaljconceptsjinjajfinancialjstatementjaudit:j
materiality,jauditjrisk,jandjevidence.jOurjphilosophyjisjthatjitjisjmuchjbetterjforjstudentsjtojgraspjthej
fundamentaljprinciplesjandjconceptsjofjauditingjearlyjon,jratherjthanjimmersejthemjinjthejdetailsjofj
reporting,jethics,jorjlegaljliabilityjtoojsoon.jWejusejFigurej1-
2jtojpresentjajsimplejoverviewjofjthejauditjprocessjandjthenjintroducejthejthreejfundamentaljconcept
sjandjthejconceptualjandjproceduraljdetailsjthatjajfinancialjstatementjauditjisjbuiltjon:jmateriality,jau
ditjrisk,jandjevidencejrelatingjtojmanagementjassertions.
UsejFigurej1-2
Thisjisjanjextremelyjimportantjsectionjasjmuchjofjthejrestjofjthejcoursejisjbuiltjaroundjthesejthre
ejconcepts.jItjisjimperativejforjthejstudentsjtojbeginjtojunderstandjthatjthejauditor‘sjjudgment
15-4
Copyrightj©j2022jMcGrawjHilljEducation.jAlljrightsjreserved.jNojreproductionjorjdistributionjwithoutjthejpriorjwrittenjconsentjofjMcGrawjHillj
Education.
Auditingj&jAssurancejServicesjAjSystematicjApproachj12ejMessier
Chapterj1
AnjIntroductionjtojAssurancejandjFinancialjStatementjAuditing
InternetjAssi
Multiple- gnments/jEar
Reviewj Discussionj
LearningjObjectives jChoicejQ Problems thWear
Questions Cases
uestions Mini-
Casesj(EWMC)
LOj1-
1:jUnderstandjwhyjstudyingjaudit
ingjcanjbejvaluablejtojyoujwhethe
1 29 30
rjorjnotjyoujplanjtojbecomejanjau
ditor,jandjwhyjitjisjdifferentjfromj
studying
accounting.
LOj1-
2:jUnderstandjthejdemandjforjaud
2,3,4 13,14,20 24,25 29
itingjandjbejablejtojexplainjthejdesi
redjcharacteristicsjof
auditorsjandjauditjservices.
LOj1-3:jKnowjthejbasic
definitionjofjajfinancialjstatementjau 5,6 13,14,15,16 25
dit.
LOj1-
4:jUnderstandjthreejfundamentalj
7 17,18 25
conceptsjthatjunderliejfinancialjst
atement
auditing.
LOj1-5:jUnderstandjwhy
samplingjisjimportantjinjanjaudit. 8
LOj1-
6:jBejablejtojdescribejthejbasicjfi EWMC
nancialjstatementjauditingjproces
9,j10 17,19,20 26
sjandjthejphasesjinjwhichjanjaudit
jisjcarriedjout.
LOj1-
7:jKnowjwhatjanjauditjreportjisja 11 21,22,23 27,28
ndjunderstandjthe
naturejofjanjunqualifiedjreport.
LOj1-
8:jUnderstandjhowjtechnologyjan
djauditjdatajanalyticsjarejchangin
gjauditsjinjexcitingjways.
LOj1-9:jUnderstandjwhyjauditing
demandsjlogic,jreasoning,jandjresou 12 30
rcefulness.
NOTE:jReferencesjtojauditingjstandardsjinjthejinstructorjmanualjfollowjajsimilarjconventionjtojthatjfollowedjinjth
ejtext:jAICPAjstandardsjwilljbejreferencedjbyjclarifiedjAUjsectionjandjPCAOBjstandardsjwilljbejreferencedjbyjAud
itingjStandardj(AS)jnumber.
15-1
Copyrightj©j2022jMcGrawjHilljEducation.jAlljrightsjreserved.jNojreproductionjorjdistributionjwithoutjthejpriorjwrittenjconsentjofjMcGrawjHillj
Education.
,ENDjOFjCHAPTERjMATERIALSjCOMPARISONjCHART
Number Number
Comparison
inj11thjedition inj12thjedition
1-1 Unchanged 1-1
1-2 Unchanged 1-2
1-3 Unchanged 1-3
1-4 Unchanged 1-4
1-5 Unchanged 1-5
1-6 Revised 1-6
1-7 Unchanged 1-7
1-8 Unchanged 1-8
1-9 Unchanged 1-9
1-10 Unchanged 1-10
1-11 Unchanged 1-11
1-12 Unchanged 1-12
1-13 Unchanged 1-13
1-14 Unchanged 1-14
1-15 Unchanged 1-15
1-16 Unchanged 1-16
1-17 Unchanged 1-17
1-18 Unchanged 1-18
1-19 Unchanged 1-19
1-20 Unchanged 1-20
1-21 Unchanged 1-21
1-22 Unchanged 1-22
1-23 Unchanged 1-23
1-24 Unchanged 1-24
1-25 Revised 1-25
1-26 Revised 1-26
1-27 Unchanged 1-27
1-28 Unchanged 1-28
1-29 Unchanged 1-29
1-30 Unchanged 1-30
Whenjstudentsjenterjthejfirstjintroductoryjclass,jtheyjseldomjunderstandjwhatjassurancejorjauditingj
entails.jGenerally,jtheyjwilljnotjhavejreadjChapterj1jbeforejclass,jsojit‘sjimportantjtojspendjthejtimej
necessaryjduringjthejfirstjclassjtojcapturejstudents‘jattentionjandjstimulatejtheirjinterestjinjauditing.
15-2
Copyrightj©j2022jMcGrawjHilljEducation.jAlljrightsjreserved.jNojreproductionjorjdistributionjwithoutjthejpriorjwrittenjconsentjofjMcGrawjHillj
Education.
,Introduction
Afterjgoingjoverjthejclassjexpectations,jwejspendjthejfirstjpartjofjclassjdiscussingjandjillustratin
gjthejdemandjforjauditingjandjthejrolejofjauditingjinjsociety.jIfjstudentsjarejtojbejinterestedjandjexcit
edjtojdigjinjandjlearnjthisjdauntingjnewjmaterial,jtheyjneedjtojbejconvincedjthatjitjisjimportantjandjus
eful.jThus,jwejalsojemphasizejthatjthejconceptsjunderlyingjauditingjarejusefuljinjmanyjcontextsjoth
erjthanjauditing,jincludingjconsultingjandjmanagement.
Laterjinjthejclass,jwejmightjaskjthejstudentsjhowjtheyjwouldjauditjthejautomobilejrevenuesj(sayj
$100jbillion)jofjajlargejautomobilejmanufacturer.jWejtelljthemjthatjeachjcarjandjtruckjhasjanjinvoice
jonjthejwindowjandjinjthejcompany'sjcomputerjsystem,jandjthatj8jmillionjcarsjandjtrucksjwerejsold.j
Wejthenjaskjthemjhowjmanyjinvoicesjoutjofj8jmillionjtheyjwantjtojexaminejinjorderjtojverifyjthej$1
00jbillionjofjrevenuesjinjthejfinancialjstatements.jOfjcourse,jyoujwilljgetjsomejoutlandishjanswersj(
e.g.,j400,000jinvoices).jWejeventuallyjtelljthemjthatjyoujmayjnotjlookjatjanyjinvoicesjandjthatjyouj
mayjrelyjsolelyjonjthejcompany‘sjinternaljcontrolsjinjconjunctionjwithjajcarefuljratiojanalysisjorjoth
erjtypejofjanalyticaljprocedure.jThisjtypejofjexamplejquicklyjgetsjthejstudents'jattentionjthatjauditin
gjinvolvesjajsubstantialjamountjofjjudgmentjandjcommonjsense.
[LOj1-1]jTipsjforjLearningjAuditing
Wejspendjajfewjminutesjonjthisjsectionjemphasizingjthejdifferencesjbetweenjthejstudyjofjaccou
ntingj(whichjtheyjarejveryjfamiliarjwith)jandjthejstudyjofjauditingj(whichjtheyjarejnot).j Wejtryjtojm
akejsurejtheyjunderstandjwhatjauditingjfocusesjonjandjhowjitjisjmuchjmorejconceptualjthanjtheirjoth
erjaccountingjcourses.jWejintroducejthejideajofjaj―tooljkit‖jandjhowjitjrelatesjtojwhatjwejwilljbejco
veringjduringjthejcourse.
[LOj1-2]jThejDemandjforjAuditingjandjAssurance
Wejspendjajreasonablejamountjofjtimejduringjthejfirstjlecturejdiscussingjwhyjtherejisjajdemandjf
orjauditingjandjassurancejservices.jManyjstudentsjthinkjthatjthejdemandjforjauditingjisjdrivenjbyjthe
jrequirementsjofjthejSecuritiesjlaws.jItjisjimportantjthatjthejstudentsjhavejsomejbasicjunderstandingj
ofjthejagencyjrelationshipjthatjleadsjtojthejdemandjforjauditing.jFigurej1-
1jprovidesjajgoodjframeworkjforjthisjdiscussion.jWejthenjbringjinjhowjthejCPAjfitsjthisjneedjwithjth
ejqualitiesjofjindependence,jintegrity,jandjobjectivity.jSometimesjwejdojrole-
plays,jaskingjstudentsjtojcomejtojthejfrontjofjthejroom.jOnejisjsellingjajcar,jwhilejthejotherjisjinterest
edjinjbuyingjit.jWejletjthemjdiscussjtheirjconcerns,jwhatjinformationjtheyjwant,jwhatjthejincentivesj
ofjthejtwojpartiesjare,jwhatjinformationjasymmetriesjmightjexist,jetc.jWejthenjtiejthisjscenario,jwhic
hjmostjstudentsjarejsomewhatjfamiliarjwithjorjatjleastjcanjrelatejto,jbackjtojthejideajofjthejdemandjfo
rjauditing.
UsejFigurej1-1
15-3
Copyrightj©j2022jMcGrawjHilljEducation.jAlljrightsjreserved.jNojreproductionjorjdistributionjwithoutjthejpriorjwrittenjconsentjofjMcGrawjHillj
Education.
, AnjAssurancejAnalogy:jThejCasejofjthejHousejInspector
Sometimesjitjisjdifficultjforjstudentsjtojgraspjthejtheoreticaljperspectivejofjthejrolejaccountingja
ndjauditingjplayjinjthejprincipal-
agentjrelationship,jsojwejusejajpracticaljanalogyjtojaidjtheirjunderstanding.jWejgojoverjhowjajhousej
inspectionjisjsimilarjtojajfinancialjstatementjauditjincludingjwhojthejplayersjarejandjhowjtheirjrolesjr
elatejtojwhatjwejjustjdiscussed.jWejaskjthejstudentsjwhatjisjsimilarjandjdifferentjbetweenjthejhouseji
nspectionjandjthejfinancialjstatementjauditjbeginningjwithjTablej1-
1.jLastly,jwejaskjthejstudentsjforjotherjexamplesjofjassurancejservicesjandjagainjtryjtojrelatejthejspe
cificsjofjeachjtojthejcharacteristicsjlistedjinj Tablej1-1.
UsejTablej1-1
Wejthenjintroducejthejconceptjofj―managementjassertions‖jbyjaskingjthejstudentsjwhatjspecifi
cjassertionsjthejcompanyjisjmakingjaboutjspecificjfinancialjstatementjitemsj(forjexample:jcashjorjin
ventory).jTheyjusuallyjcanjcomejupjwithjthejmostjobviousjones:jexistence,jfairlyjandjaccuratelyjrec
orded,jandjalljitemsjarejincluded.jTheyjmightjneedjtojbejpushedjforjsomejofjthejothers.jTheyjmayjals
ojfailjtojdistinguishjbetweenjassertionsjinj termsj ofj accountj balancesj andjassertionsjinjtermsjofjtran
sactions.jItjisjusefuljtojhelpjthemjunderstandjthejdifferencesjbetweenjassertionsjforjtransactionsjandj
balancesjbutjalsojhowjtheyjarejrelated.jThenjwejaskjthemjhow,jasjanjauditor,jyoujmightjgojaboutjcoll
ectingjevidencejonjthejcashjaccount,jbringingjinjwhatjassertionsjarejmostjimportantjandjwhy.jWejlik
ejtojemphasizejthejdifferencesjbetweenjassertionsjaboutjthejaccountjbalancejatjthejendjofjthejperiodj
andjthejtransactionsjpostedjtojthejaccountjduringjthejperiod,jrelatingjthesejconceptsjtojeachjotherjan
djtojthejideajofjriskjfromjanjauditjperspective.
UsejTablej1-2
Next,jwejtalkjaboutjwhatjelsejthejprospectivejinvestorjwouldjwantjtojknowjbesidesjthejqualityjof
jmanagement‘sjassertions.jFinally,jwejrelatejalljofjthisjbackjtojTablej1-
1.jProblemj24jcouldjbejcoveredjhere.
[LOj1-4]jFundamentaljConceptsjinjConductingjajFinancialjStatementjAudit
Injthisjsection,jwejdiscussjexamplesjofjthejfundamentaljconceptsjinjajfinancialjstatementjaudit:j
materiality,jauditjrisk,jandjevidence.jOurjphilosophyjisjthatjitjisjmuchjbetterjforjstudentsjtojgraspjthej
fundamentaljprinciplesjandjconceptsjofjauditingjearlyjon,jratherjthanjimmersejthemjinjthejdetailsjofj
reporting,jethics,jorjlegaljliabilityjtoojsoon.jWejusejFigurej1-
2jtojpresentjajsimplejoverviewjofjthejauditjprocessjandjthenjintroducejthejthreejfundamentaljconcept
sjandjthejconceptualjandjproceduraljdetailsjthatjajfinancialjstatementjauditjisjbuiltjon:jmateriality,jau
ditjrisk,jandjevidencejrelatingjtojmanagementjassertions.
UsejFigurej1-2
Thisjisjanjextremelyjimportantjsectionjasjmuchjofjthejrestjofjthejcoursejisjbuiltjaroundjthesejthre
ejconcepts.jItjisjimperativejforjthejstudentsjtojbeginjtojunderstandjthatjthejauditor‘sjjudgment
15-4
Copyrightj©j2022jMcGrawjHilljEducation.jAlljrightsjreserved.jNojreproductionjorjdistributionjwithoutjthejpriorjwrittenjconsentjofjMcGrawjHillj
Education.
