Question

CAN ANYONE ANSWER THIS ??? ITS EMERGENCY ..................

Explain 4 inherent limitations of auditing

Answer 1

i) The nature of financial reporting -The preparation of financial statement involves judgement by management in applying the requirements of the entitys applicable financial reporting framework to the facts and circumstances of the entity.

ii)The nature of audit procedures -There are practical and legal limitations on the auditors ability to obtain audit evidence.

iii)Timeliness of financial reporting and balance between benefit and cost -The matters of difficulty,cost or time involved is not itself a valid basis for the auditor to omit an audit procedure which there is no alternative .

iv)Other matters -In certain subject matters ,limitations on the auditors ability to detect misstatements are are particularly signifiant.Such subject matters include Fraud,related party existence,non compliance with laws and regulations and future events that cause entity to cease to continue as going concern.