Cuesta Lealyn C.

ACC325 (7878)

Prof. Faith Turno, CPA

Let’s Analyze ULOa

1. Why do you think is there a need for the company to establish their criteria of
when the risk is rated high, medium, or low?
There is a need for the company to establish their criteria of when the risk is
rated high, medium, or low to ensure that top management will be guided in
making decisions of whether to augment the existing audit resources or to accept
the risk that there are areas that will not be audited specially if the risk is high
which takes longer time to recover and may result to greater loss. Also, by
establishing criteria can help in planning the audit to give more attention and
emphasis those risks that are high and minimize their impact.
2. Information is considered as an asset of the company. Explain.
An information is considered as an asset of the company for in this information
they base their decisions on the operations of the business and how they will
improve their business. Also, these information form part of the organization as a
whole and may include their competitive advantage among other competitors that
is why it needs to be always secured by the organization.
3. Elaborate in your own words, the reason for using another auditor or experts’
work.
The reason for using another auditor or experts work is that to ensure that
sufficient and appropriate audit evidence is obtained. Also, to ensure that quality
of audit is met because there are some works that only experts can do such as
valuation of complex financial instruments, actuarial calculations, etc. Through
this, there is a great possibility that some material misstatements will be detected
though not all because of the inherent risk accompanied in auditing the financial
statements.