Settlement of Audit Objections

Management override

Collusion among employees

Inefficiency of internal auditor

Abuse of authority

Auditor

Client

Company registrar

Company secretary

Materiality is a relative concept

Materiality judgments involve both quantitative and qualitative judgments

Auditor’s consideration of materiality is influenced by the auditor’s perception of the needs of an informed decision maker who will rely on the financial statements

At the planning state, the auditor considers materiality at the financial statement level only

Credit sales

Sales returns

Credit purchases

Cash purchases

Someone directly responsible to the shareholders

Someone directly responsible for goods delivery to the customers

Someone directly responsible to the board of directors

Someone directly responsible to deal with the suppliers

helps to determine the nature, timing and extent of other audit procedures

directs attention to potential risk areas

indicate important aspects of business

all of the above

assignment of audit assistants

system of determining audit fees

consultation with experts

confidentiality of client’s information

Overall financial statements level

Fraud risk factor level

Financial statement assertion level

Control environment level

Areas that may represent specific risks relevant to the audit

Material weaknesses in the internal control structure

The predictability of financial data form individual transactions

The various assertions that are embodied in the financial report

Document the conclusions

documents the reasons along with conclusions

perform tests of control

perform walk through tests