Responsibilities Auditor-opinion Management - preparation Financial statements - representation Objectives of a financial statement audit Professional scepticism Risk & materiality Obtain reasonable assurance Limitations of testing Limitations of Control Evidence is persuasive not conclusive Subjecive judgement Financial statements are free of material misstatement Financial statements are prepared according to applicable reporting standards Provide an opinion 6.1 Explain the difference between reasonable assurance and absolute assurance in relation to an audit. (2 Marks) 6.2 The risk of material misstatement exists at two levels within the audit process. Explain the two levels and provide two examples for each level. (3 Marks) 6.3 Explain what is meant by "evidence is persuasive and not conclusive." (4 Marks) 6.4 Explain what you understand by audit risk and the relationship that exists (if any) between materiality and audit risk. (6 Marks) 6.5 Explain the difference between "engagement activities and planning" in the audit process. Be sure to provide details about each stage and make use of examples.

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