Which of the following are causes of misstatements? (Select all that apply.)

1.Inaccurate substantive procedure used

2. Inappropriate selection of accounting policies

3. Omission of an amount or disclosure

4. Incorrect accounting estimate caused by a misinterpretation of facts

Which of the following initial procedures do auditors perform before applying substantive procedures when auditing an account balance? (Select all that apply.)

1. Check if appropriate and understandable terminology is used, as prescribed by the applicable financial reporting framework.

2. Trace the beginning balance of the prepaid insurance account to the auditors working papers from the prior years audit.

3. Obtain a trial balance or other detailed report for the account.

4. Scan the transactions in the account for unusual items.