Explain the objective of conducting an audit of financial statements and an audit of internal controls. Distinguish management’s responsibility for the financial statements from the auditor’s responsibility for verifying those statements.

AUDIT RESPONSIBILITIES AND OBJECTIVES

Explain the objective of conducting an audit of financial statements and an audit of internal controls.

Distinguish management’s responsibility for the financial statements from the auditor’s responsibility for verifying those statements.

Explain the auditor’s responsibility for discovering material misstatements due to fraud or error.

Describe the need to maintain professional skepticism when conducting an audit.

Describe the key elements of an effective professional judgment process.

Identify the benefits of a cycle approach to segmenting the audit.

Describe why the auditor obtains assurance by auditing transactions and ending balances, including presentation and disclosure.

Distinguish among the management assertions about financial information.

Link transaction-related audit objectives to management assertions for classes of transactions.

Link balance-related audit objectives to management assertions.

Explain the relationship between audit objectives and the accumulation of audit evidence.