Week 4 - DQ 2

How does the auditor evaluate the results of audit procedures? What types of qualitative factors might the auditor consider when encountering an error? How might the results affect the audit conclusion?

Response #1

The auditor must perform risk assessment procedures to evaluate the type, magnitude and likelihood of potential misstatements. Once the type is established by recognizing risk factors and then assessing their potential for risk statements, the auditor determines which misstatements are the most significant. After the risks and significance of certain misstatements are identified, the auditor determines the likelihood of a material misstatement occurring to establish the level of substantive tests to conduct. The auditor then performs further risk assessment...