Professional Documents
Culture Documents
and Objectives
Chapter 6
Distinguish managements
responsibility for the financial
statements and internal control
from the auditors responsibility
for verifying the financial
statements and effectiveness
of internal control.
2008 Prentice Hall Business Publishing, Auditing 12/e, Arens/Beasley/Elder 6-6
Managements
Responsibilities
Management is responsible for the financial
statements and for internal control.
Reasonable assurance
Professional skepticism
Capital acquisition
and repayment cycle
Inventory and
warehousing
cycle
2008 Prentice Hall Business Publishing, Auditing 12/e, Arens/Beasley/Elder 6 - 17
Learning Objective 5
Sales returns
$ 1,242 and allowances
Charge-off of
$ 3,323 uncollectible
accounts
Recorded transactions
Occurrence
exist
Existing transactions
Completeness
are recorded
Recorded transactions
Accuracy are stated at the
correct amounts
2008 Prentice Hall Business Publishing, Auditing 12/e, Arens/Beasley/Elder 6 - 24
General Transactions-related
Audit Objectives
Rights and
Assets must be owned
obligations
Perform tests of
Complete the
controls and
Phase II substantive tests Phase IV audit and issue
an audit report
of transactions