What is Source document?
In the business world buyers and sellers interact to exchange goods and services and other transactions like payment. A diligent accountant keeps the record of all such important transactions about which users must be...
What is the difference and relation between Business risk Inherent risk Control risk Detection...
In risk based audit engagements understanding different kinds of risk become extremely important. Proper understand will not only differentiate between different kinds of risks but also help you in recognizing the duties of management...
What is meant by sufficient appropriate audit evidence and how is it obtained?
It is the responsibility of the auditor to obtain reasonable assurance by conducting audit engagement and expressing his opinion in the audit report. This expression of opinion results in reasonable assurance which is conveyed...
What is meant by inherent limitations of audit and what are these?
Inherent limitations are such features of audit that constrains the auditor to obtain absolute assurance. It is because of these inherent limitations of audit the practitioner cannot assure the users of financial statements that...
What is meant by Significant Matters in auditing?
Significant matters are such matters that give risk to special audit consideration, treatment, conclusion or opinion.
What is significant matter is not clearly defined in International Standards on Auditing (ISAs) and therefore what amounts to...
Why auditor cannot provide Absolute level of assurance in audit engagement?
According to International Standards on Auditing ISAs, auditor is required to obtain reasonable assurance whether financial statements give true and fair view or in others words he must be reasonably sure that financial statements...
What is meant by Sale or Return?
Buying and selling arrangements between sellers and buyers may take different forms and sales contracts can have some unusual terms agreed between the parties.
However, one of the common arrangements between supplier and customer is 'sale or...
What is meant by Audit evidence?
Auditors objective or in simple words responsibility with respect to audit engagement is only to the extent of expression his opinion on financial statements whether they have been prepared in accordance with applicable financial...
Why impairment of goodwill is not reversed?
First of all we must be clear that goodwill is an intangible asset that entities can recognize in their financial statements but only such goodwill that is acquired in business combination. Internal goodwill or...
What is meant by ‘lowering detection risk’ in auditing?
A practitioner (or simply auditor) performing audit engagement is required to reduce audit risk to such level that is suitable to provide reasonable assurance to the intended users.
By audit risk we mean that probability...