SAS 109 Requires Auditors to Obtain Sufficient Knowledge of the Organization's

question 112

Essay

SAS 109 requires auditors to obtain sufficient knowledge of the organization's risk assessment procedures to understand how management identifies,prioritizes,and manages financial reporting risk.List five circumstances that can cause risks to arise or change.

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Definitions:

National Debt

The total outstanding borrowing of a government, consisting of internal and external loans, accumulated over years of budget deficits.

Excise Taxes

Taxes imposed on specific goods or services, such as tobacco, alcohol, and gasoline, usually intended to discourage their use or generate revenue.

Federal Tax Revenue

The income collected by the federal government from taxes, including income taxes, payroll taxes, and corporate taxes, used to fund public services and obligations.

Tax Rates

The rate at which a person or business is required to pay taxes to the authorities.