THE ROLE OF INTERNATIONAL AUDITING STANDARD NO. (315) TO IDENTIFY THE RISKS OF MISSTATEMENT BY REVEALING EARNINGS MANAGEMENT PRACTICES
Keywords:
International Auditing Standard (315), risks of material misstatement, earnings managementAbstract
This research aims to identify the role of International Auditing Standard No. (315), identifying and estimating the risks of material misstatement through understanding the facility and its environment in detecting earnings management practices. The results showed that identifying and estimating the risks of material misstatement through understanding the facility and its environment helps the auditor detect earnings management practices that have a major role in misleading financial statement users about the true outcome of the activity. As well as the departments that practice earnings management usually possess high accounting expertise. The study recommended that the transparency of financial statements must be improved and the quality of financial reports must be raised through adequate and fair disclosure. In addition to reducing the level of information asymmetry between management and users of the financial statements to provide confidence in those lists. Auditors are interested in calculating total receivables and regular and extraordinary receivables on a regular basis to present profits fairly. Also to disclose the quality of profits in financial reports, which helps users of financial statements predict future profits fairly.
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