How Professional judgement and Professional skepticism are different in application?
Professional Skepticism and Professional Judgment both are required to conduct the assurance engagements properly. But both are two separate requirements and are not one and the same and are different in their meaning and also in their application. But surely both complement each other in auditor’s work. Professional Skepticism The auditor is required to maintain […]
What is Audit risk?
In IAASB auditing standards the term Audit risk has been defined as: The risk that auditor expresses an inappropriate audit opinion when the financial statements are materially misstated. Audit risk is a function of risk of material misstatement and detection risk. In simple words a risk that auditor expresses an opinion that financial statements are […]
What is Performance materiality?
Since the the concept of materiality at application level has been defined in the standards, it has been posing problems for students. Many think that this is a new concept, but it is fairly old and was there but it was certainly not defined before. Main reason to my mind why students find it hard […]
What is the difference between Inherent Risk and Business Risk and implications of these two in auditing?
Understanding the difference between these two terms and other risk related terminologies is vital if students want to acquire the conceptual understanding of the Risk-based Audit approach. According to the glossary accompanying the IAASB pronouncements on assurance engagement and related Services business risk has been defined as follows: A risk resulting from significant conditions, events, […]
