Why Is the Appropriateness of Audit Evidence Obtained by the Auditor

question 35

Essay

Why is the appropriateness of audit evidence obtained by the auditor important in forming an audit opinion?
Describe the qualities information should have to be considered appropriate by the auditor.

---

Definitions:

Long-Run Industry Supply

The relation between the price of a good and the total output produced by an industry once all adjustments have been made.

Economic Profit

The difference between total revenues and total costs, including both explicit and implicit costs.

Economic Profits

Profits that exceed the costs of all inputs, including both explicit costs (like wages and materials) and implicit costs (like the opportunity cost of capital).

Industry Equilibrium

A state where supply and demand in an industry are balanced, leading to stable prices and quantities.