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8 Cards in this Set
- Front
- Back
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Risk of material misstatement (2 levels) |
1. Overall financial statement level 2. Account level |
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Techniques to gather evidence of RMM |
- inquire with management, internal auditor, director - analytical procedures - observing controls |
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RMM at the OFSL |
- assess pervasive risk - general, inherent, control, fraud risk are all OFSL |
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3 risk types |
1. Inherent 2. Control risk 3. Fraud risk |
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Factors that reduces risk |
- private company - fewer users of financial statements - inherent risk is low (Important to consider both) |
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Control risk factors (4) |
- performance reviews ( budget ) - information processing controls - physical controls - segregation of duties |
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Risk formula |
AR = IR * CR * DR Inherent, control, detection |
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Fraud Triangle |
1. Incentive 2. Opportunity 3. Rationalization and attitude |
