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Connection between the Significance Threshold and the Risk of Audit in Entities in the Constructions Field

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  • Grigore Marian

    (The Bucharest University of Economic Studies Faculty of Accounting and Management Information Systems)

Abstract

The significance threshold estimated on the occasion of planning the financial audit is divided at account and individual transactions level on which the financial statements are based. The significance threshold is not an absolute amount. It represents a grey area between what is probably insignificant and what seems to be significant. In the beginning of the audit mission reasoning regarding the dimension and the nature of the erroneous presentations considered significant. [1] The significance threshold illustrates the effect that the errors contained by certain audit evidences has on the financial statements. For example, an erroneous information on the level of fiscal amortisation taken into account in determining the computation of the profit levy or the erroneous determination of certain provision expenses for an uncertain client, may turn loss into fiscal profit and the other way around.

Suggested Citation

  • Grigore Marian, 2015. "Connection between the Significance Threshold and the Risk of Audit in Entities in the Constructions Field," Ovidius University Annals, Economic Sciences Series, Ovidius University of Constantza, Faculty of Economic Sciences, vol. 0(1), pages 754-757, May.
    • Handle: RePEc:ovi:oviste:v:xv:y:2015:i:1:p:754-757
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    More about this item

    Keywords

    significance threshold; risk; audit; constructions; error.;
    All these keywords.

    JEL classification:

    • M40 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Accounting - - - General
    • M41 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Accounting - - - Accounting
    • M42 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Accounting - - - Auditing

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