The risk of material misstatement exists at two levels within the audit process. Explain the two levels and provide two examples for each level. Study the scenario and complete the questions that follow:

Responsibilities Auditor - opinion Management - preparation Financial statements-representation Objectives of a tinancial statement audit Limitations of testing Limitations of Control Evidence is persuasive not conciusive Subjective judgement Professional scepticism Risk & materiaity Obtain reasonable assurance Financial statements are free of materlal misstatement Financial statements are prepared according to applicable reporting standards Provide an opinion