Professional Documents
Culture Documents
The primary difference between errors and frauds is that errors are unintentional misstatements of the
financial statements, whereas frauds are intentional misstatements. Illegal acts are violations of laws or
government regulations, other than frauds.
Example of an error: An error is a mathematical mistake when footing the columns in the sales journal.
Example of an illegal: An illegal act is the dumping of toxic waste in violation of the federal
environmental protection laws.
Question 2
2. Report address- The report should generally be addressed to the board of directors or stockholders,
not to the audit committee.
3. The introductory paragraph-The introductory paragraph should state, "we have audited," not "we
have examined."
5. In Scope paragraph, they didn't describe that how they conduct their audit procedure. Whether it is
test basis or not.
6. In scope paragraph, they did not mention that why they do audit. They have to write down that to
obtain a reasonable assurance we will do audit.
7. There is no inclusion of the phrase, "in all material respects" in the opinion paragraph.