Task1. The primary intention of external audit is to examine the financial statements of the organization and to give an opinion as to whether the financial statements are free from material misstatements. Auditors will have to regard to both the quantitative and qualitative facets of materiality.
problem1. Name all three aspects by which auditors might consider materiality. Illustrate each aspect with practical instance
problem2. describe the three categories of assertions implied in the financial statements which external auditors must use as a basis for their work. For each category, describe two detailed objectives that auditors might use to design and perform their evidence gathering procedures.
problem3. The auditor must obtain relevant and reliable audit evidence sufficient to enable him to draw reasonable conclusions there from.
i) What is meant by the term “audit evidence” and state what it consists of
ii) What factors would affect the auditor’s judgment of whether or not the evidence so collected was sufficient
iii) State the factors which would enable an auditor to assess the reliability of evidence that he has gathered.