Question

When scrutinizing a statement of cash flows in an attempt to gain a better understanding of the client, which would be of most auditor interest as evidence of risk of possible misstatement?\

Answer 1

Answers;

In scrutinizing a statement of cash flows in an attempt to gain a better understanding of the client, the auditor should evaluate to check if the client is meeting interest payments when they are due. The auditor may use information about the client's industry. This is done to evaluate whether significant changes is made in the company from prior periods, including changes in its internal control over financial reporting, affect the risks of material misstatement.