Chapter 6

Audit
Responsibilities
and Objectives

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 1
Distinguish managements responsibility for
the financial statements and internal control
from the auditors responsibility for verifying
the financial statements and effectiveness of
internal control.

6-2
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Financial statements and internal controls.

Sarbanes-Oxley increases managements

responsibility for the financial statements.

CEO and CFO must certify quarterly and annual

financial statements submitted to the SEC.

6-3
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 The Sarbanes-Oxley Act provides for criminal
penalties for anyone who knowingly falsely
certifies the statements.

6-4
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 2
Explain the auditors responsibility for
discovering material misstatements due to
fraud or error, and the need to maintain
professional skepticism when conducting the
audit.

6-5
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 Material Reasonable
misstatements Assurance

Professional
Errors vs. Fraud
Skepticism
Fraudulent
reporting
vs.
theft of assets
6-6
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 Type Responsibility
Same for
Direct-Effect errors and
fraud

Indirect-Effect No Assurance

6-7
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