Due Diligence: Purpose, Purpose, Scope Benefit and More

What is Due diligence? Due diligence (DD) is research (comprehensive survey) or fact-finding of the Acquiring company for a targeted company. When the Acquiring company plans to buy the target company, the acquiring company will do DD to the target company. DD can be...

Risk of Material Misstatement for Cash

Risk of Material Misstatement for Cash Cash includes cash equivalents. Cash is shown under the “current assets” of the balance sheet. These are the liquid assets of the company. The most important component for any audit is checking cash. The inherent risk and control...

What is the risk of material misstatement?

Meaning of Risk of Material Misstatement The risk of material misstatement is the susceptibility of the financial statements, accounts, and assertions to material misstatement, and the risk that the client’s current internal controls would be ineffective in...

What is a deviation from internal control?

Meaning of internal control Internal control refers to all of the policies and procedures management uses to achieve the objectives of the organization. Internal controls ensure to provide timely, accurate, and complete information with respect to books of accounting...

How to assess materiality in an audit?

Meaning of materiality There is no specific definition of materiality under U.S. Generally Accepted Accounting Principles (GAAP). However, the gist as per the Conceptual Framework for Financial Reporting under International Financial Reporting Standards states that...