ISA 315 Identifying and assessing the risks of material misstatement requires the auditor to carry out risk assessment procedures to identify the possibility of material misstatement in the financial statements. Required: List three activities that the auditor can perform to help gain an understanding of the entity being audited and so identify the possibility of material misstatements.
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Read the overview below and complete the activities that follow. Auditors must gather a combination of many types of audit evidence to best reduce their audit risk. There are seven major types of audit evidence: 1) accounting information system, 2) documentary evidence, 3) third-party representation, 4) physical evidence, 5) computations, 6) data interrelationships, and 7) client representations. Concept Review: Audit evidence is any information that corroborates or refutes the auditors' premise that the financial statements present fairly the client's financial position and operating results.
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