Risk assessment in auditing of financial statements Research Paper

Risk assessment in auditing of financial statements - Research Paper Example SAS No. 109 was issued in 2006 along with seven other auditing standards. What’s important about these eight (8) auditing standards was their common theme – adherence to risk assessment and the audit response to such an assessment. These eight auditing standards were expected to bring about major changes and to give guidelines and guidance when auditing nonpublic entities (McConnell and Schweiger, 2007). The primary objective of these eight standards was to improve the conduct of audit by the external auditor through requiring the auditors to acquire a deeper understanding of a company’s internal controls so that the auditor is in a better position to â€Å"identify risks of material misstatement of financial statements† (McConnell and Schweiger, 2007). With this primary objective, the issuers hope that there will be better â€Å"linkages between assessed risks and the nature, timing and extent of audit procedures performed in response to those risks† (McConnell and Schweiger, 2007). The first paragraph of SAS No. 109 established the provisions and guidelines for obtaining â€Å"an understanding of the entity and its environment†¦to assess the risk of material misstatement of the financial statements† (AICPA, AU Section 314, 2006). The second paragraph provides brief summaries of the specific sections of the standard. The subsequent paragraphs expound on the summaries provided in the second paragraph. Paragraph 3 lists â€Å"examples of considerations for establishing a sufficient understanding† of the entity (AICPA, AU Section 314, 2006). Paragraph 4 calls on external auditors to â€Å"use professional judgment to determine the extent of the understanding required of the entity and its environment† (AICPA, AU Section 314, 2006). Certain paragraphs of SAS No. 109 outline and explain the risk assessment procedures (i.e, inquiries, analytical procedures and observation) an auditor needs to perform to obtain such an understanding. The

How useful is a sociological approach to understanding the importance Essay

How useful is a sociological approach to understanding the importance of consumption in modern society - Essay Example In neither of its point could modern societies do exclusive of its members create things to be obsessive, and members of both societies do, obviously, consume. The consumer of a modern society is a significantly different from the consumer of any other society thus far. The diversity is one of precedence, a shift of accent that makes a massive difference to almost every aspect of society, culture, and person life. The divergence are so profound and that they validate words of our society as a society of detach and different kind - a consumer society. To increase their capacity for consumption, consumers are never left to rest. They are constantly exposed to new temptations to keep them in the state of suspicion and steady dissatisfaction. Advertising commanding them to shift attention needs to confirm the suspicion while offering a way of satisfaction. It is often said that the consumer market seduces its customers. But in order to do so, it needs customers who want to be seduced. In a properly working consumer society, consumers seek actively to be seduced. They live from attraction to attraction, from temptation to temptation--each attraction and each temptation being somewhat different and perhaps stronger than the previous. When we call todays society a consumer society, we have in mind something more than the trivial meaning that all members of that society are consumers. What we have in mind is that ours is a "consumer society" in the similarly fundamental sense in which the society of our predecessors used to be a "producer society." (Murphy , 2000, 636) That older type of modern society once engaged its members primarily as producers and soldiers; society shaped its members by dictating the need to play those two roles, and the norm that society held up to its members was the ability and the willingness to play them. In todays society there is little need for numerous industrial labourers or conscripted armies, but rather, as a whole we are seen as