Step 1 Flashcards
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Understanding Ownership Structure and Users of Financial Statements
Step 1: Identify Users of Financial Statements
- Consider who the users of the financial statements are, as materiality is determined based on their needs.
- ISA 315 (Revised 2019) requires auditors to understand the entity, its environment, and ownership structure to determine the users of the financial statements.
Primary Users of Financial Statements:
- Shareholders
- Debt holders
- Other stakeholders who receive or use the financial statements
