Pervasive (in the context of ASA 705) a term used, in the context of misstatements, to describe the effects on the financial report of misstatements or the possible effects on the financial report of misstatements, if any, that are undetected due to an inability to obtain sufficient appropriate audit evidence .
What is the meaning of pervasive risk?
Pervasive means found everywhere or spread everywhere . A pervasive misstatement would be so serious that, to all intents and purposes the FS are useless. Similarly with a pervasive lack of sufficient appropriate audit evidence.
What is difference between materiality and pervasive?
The bottom line is that if the auditor believes that the financial statements may be relied upon in some part for decision making then the matter is material and not pervasive. If, however, they believe the financial statements should not be relied upon at all for making decisions then the matter is pervasive.
What does pervasive control mean?
Pervasive IS controls are a subset of general controls ; they are those general controls that focus on the management and monitoring of IS. 2.2.2 The effect of pervasive IS controls on the IS auditor’s work is not limited to the reliability of.
How do you know if a misstatement is pervasive?
Misstatements to the financial statements are considered pervasive if the misstatements affect a substantial portion of the financial statements .
What makes something pervasive?
When something is pervasive, you can say it is widespread or felt throughout a thing or place . In Auditing, the term pervasive refers to any misstatements that can affect a financial statement or the effect of misstatements on financial statements.
What is a pervasive opinion?
(a) Pervasive – A term used, in the context of misstatements, to describe the effects on the . financial statements of misstatements or the possible effects on the financial statements of. misstatements, if any, that are undetected due to an inability to obtain sufficient appropriate. audit evidence.
What does material but not pervasive misstatement mean?
The words “material but not pervasive on financial statements” mean that the maters, either material misstatements or lack of evidence with material effects on financial statements, can be isolated .
What is meant by material but not pervasive?
The auditor, having obtained sufficient appropriate audit evidence, concludes that misstatements , individually or in the aggregate, are material but not pervasive to the financial statements, or the auditor is unable to obtain sufficient appropriate audit evidence on which to base the opinion, but concludes that the ...
What is a unqualified opinion?
An unqualified opinion is the most common type given in an auditor’s report . ... It simply indicates that the independent auditor has seen enough information to conclude that the company’s financial statements conform to GAAP and fairly present the company’s financial position for the stated time frame.
What are the four major categories of pervasive controls?
- Organizational design.
- Corporate policies,
- Monitoring controls and.
- IT general controls.
WHY IT general controls are considered pervasive?
IT General Controls – similar to Entity Controls, these are also considered to be “pervasive” controls that relate to the overall management of the information systems and processing environments that internal controls depend upon .
What is an antonym for pervasive?
Antonyms & Near Antonyms for pervasive. rare, strange, unknown, unusual .
Is going concern pervasive?
If there is insufficient evidence to establish if there is a material uncertainty and the issue is pervasive, as going concern impacts most of the financial statements, the auditor may then need to issue a disclaimer of opinion.
How do you know when an exception is highly material?
When determining whether an exception is “highly material,” the extent to which the exception affects different elements of the financial statements must be considered .
Is a qualified opinion bad?
A qualified opinion means that your financial statements are auditable but have financial or compliance issues that materially affect one or more funds within the overall financial statement. A disclaimed opinion is very bad .
