6.4 Explain what you understand by audit risk and the relationship that exists (if any) between materiality and audit risk. (6 Marks)

Question 6 Study the scenario and complete the questions that follow: Responsibilities Auditor-opinion Management - preparation Financial statements - representation Objectives of a financial statement audit Professional scepticism Risk & materially Obtain reasonable assurance Limitations of testing Limitations of Control Evidence is persuasive not conclusive Subjective judgement Financial statements are free of material misstatement Financial statements are prepared according to applicable reporting standards Provide an opinion