evaluation of misstatement

Question 1

objectives

Answer 1

evaluate the effect of misstatements on the audit and

uncorrected misstatements on the financial statements

Question 2

accumulation of identified misstatements

Answer 2

auditor must accumulate misstatements (except those that are clearly trivial).

auditor should communicate to appropriate level of management regarding accumulated misstatements on a timely basis for correction.

Question 3

if management has examined a population based on auditor’s request, it is up to the auditor to determine if there is still a _____
if management refuses to make a correction then the auditor should find out why and determine the effects on the _____

Answer 3

misstatement

financial statements

Question 4

determine whether uncorrected misstatements are material (collectively or individually) based on their

Answer 4

size and nature

considering the effects of misstatements in prior periods

qualitative and quantitative

Question 5

documentation standards

Answer 5

document what is or isn’t trivial (inconsequential)

misstatements and if they have been corrected

conclusion and basis for it (whether uncorrected misstatement are material individually or in the aggregate)