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Assessing Audit Risk and Materiality (Course Id 1880)

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Author : Colten Christensen, Author
Status : Production
CPE Credits : 2.0
IRS Credits : 0
Price : $17.95
Passing Score : 70%
Course Type: NASBA QAS - Text - Technical - NASBA Registry
Primary Subject-Field Of Study:

Auditing - Auditing for Course Id 1880

Description :

Every audit requires planning. Audit planning requires evaluating materiality and risk. Both materiality and risk evaluation require judgement from the auditor because both concepts directly impact the auditor's planned audit evidence. Materiality is important because the auditor provides assurance to financial statement users that the financial statements are free of material misstatements. This requires the auditor to develop a preliminary judgment about materiality when planning the audit, which will provide the basis for that important assurance. In addition, the auditor must consider risk to effectively address the most appropriate risks for each engagement. The auditor's understanding of the entity and its environment, including its internal control, provide a basis for the auditor's assessment of the risk of material misstatement. Using the audit risk model and tolerable misstatement for each account, the auditor determines the audit evidence needed to achieve an acceptable level of audit risk for the engagement.

Usage Rank : 0
Release : 2021
Version : 1.0
Prerequisites : None.
Experience Level : Overview
Additional Contents : Complete, no additional material needed.
Additional Links :
Advance Preparation : None.
Delivery Method : QAS Self Study
Intended Participants : Anyone needing Continuing Professional Education (CPE).
Revision Date : 07-Sep-2021
NASBA Course Declaration : Participants must complete the final examination within one year of purchase and with a minimum passing grade of 70% or better to receive CPE credit unless otherwise noted on the Course History page (i.e. California Ethics must score 90% or better). After logging in click on the Course History links on your My Courses page for the Begin date and Expire date for the Final Exam.
Approved Audience :

NASBA QAS - Text - Technical - NASBA Registry - 1880

Keywords : Auditing, Assessing, Audit, Risk, Materiality, cpe, cpa, online course
Learning Objectives :

Course Learning Objectives

At the end of this course, students will be able to:
  • Identify why materiality is important for an audit of financial statements.
  • Make a preliminary judgment about what amounts to consider material.
  • Identify the audit risk model and its components.
  • Recognize the impact of engagement risk on acceptable audit risk.
  • Recognize the relationship of risks to audit evidence.
Course Contents :

Chapter 1 - Assessing Audit Risk and Materiality

Course Learning Objectives

Audit Risk and Materiality Introduction

Requirements with the Reporting Title

Requirements with the Audit Report Address

Requirements for the Introductory Paragraph

Requirements for the Scope Paragraph

Requirements for the Opinion Paragraph

Requirements for the Name of the CPA Firm

Requirements for the Audit Report Date

The Definition of Materiality

How to Apply Materiality

Preliminary Assessment

Factors Affecting the Preliminary Judgement

Materiality Evaluation

The Importance of Certain Misstatements

Materiality Example

Estimating Misstatements

Assessing the Risk of Material Misstatements

What is the Audit Risk Model?

What is Planned Detection Risk?

What is Inherent Risk?

What is Control Risk?

Audit Risk that is Acceptable

Risk Factors in the Audit Risk Model

Deciding Acceptable Risk

What is Engagement Risk?

Controlling Acceptable Audit Risk

Users that Rely on Financial Statements

Size of the Client

Ownership Distribution

Liabilities

Problems After the Report

Liquidity

Profits or Losses

Growth Methods

The Client’s Operations

Assessing Management

Management Integrity

Audit Risk Decision

The Inclusion of Inherent Risk

Factors of Inherent Risk

The Client’s Business

Previous Audit Results

Initial Engagements

Transactions Between Related Parties

Atypical Transactions

Recording Transactions

Population Makeup

Fraudulent Reporting

Evaluating Information

Inherent Risk Assessment

Responding to Risk

Assessing for Each Cycle

Associating Risk with Different Objectives

Measuring Model Components

Worksheet Example

From Materiality and Risk to Evidence

A Brief Summary

Additional Information

Glossary

CPE Auditing Course: https://www.cpethink.com/auditing-cpa-courses
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