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Financial audit Essay Topics & Paper Examples

Anne Aylor. Inc

Different users for different purposes to use financial information. Not all parts of the financial statements are equally relevant to all users. For instance, stockholders are more concerned with profit growth and revenue than creditors. Materiality is a relative rather than an absolute concept. Based on different operation environment, the materiality threshold will vary to influence users of the financial statement. For example, the magnitude of a misstatement that will influence users of the financial statement will change based on how the entity is performing in the industry. Most misstatements affect both a balance sheet an income statement account due to the dual entry method. So, auditors must design a audit plan to detect the smallest misstatement that will influence…