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Fair presentation of the Financial statements in accordance with Financial reporting standards is the responsibility of the client's management. The auditors responsibility is to design the audit to provide reasonable assurance of detecting material misstatements in the Financial statement.
Material misstaments arising from Error, Fraud and noncompliance with Laws and Regulation are the primary concerned of the auditor.
The auditor should use professional judgement to asses audit risk and to design audit procedures. The auditor should consider :
1. the level of assurance the auditor wish to attain
2. How susceptible is the account to material misstatement
3.effectiveness of clients internal control
If the auditor asses the audit risk at a low level then he should design more effective substantive procedures.
