The primary purpose of financial statement audit engagements is to review financial reports and ensure they comply with generally accepted accounting principles (GAAP). This involves verifying the accuracy and fairness of the financial statements, ensuring they provide a true and fair view of the organization's financial position and performance. References: = IIA Practice Guide: "Auditing Financial Statements" and IIA Standard 2110.A1.

To determine the projected misstatement for the population using ratio estimation, the following calculation can be used:
Projected Misstatement=(Sample MisstatementSample Book Value)
×Population Book ValueProjected Misstatement=(Sample Book ValueSample Misstatement)
×Population Book Value
Given:
Sample Misstatement = $420,000
Sample Book Value = $12,000,000
Population Book Value = $20,000,000
Projected Misstatement=(420,00012,000,000)×20,000,000Projected Misstatement=(12,000,000420,000)×20,
000,000
Projected Misstatement=0.035×20,000,000=700,000Projected Misstatement=0.035×20,000,000=700,000 Therefore, the projected misstatement is $700,000.
IIA Standards: 2320 - Analysis and Evaluation
IIA Practice Guide: Statistical Sampling

The primary purposes of a walk-through during the initial stages of an assurance engagement are to help develop process maps (A), determine segregation of duties (B), and identify residual risks (C). Testing the adequacy of controls (D) is generally performed after these initial steps to ensure a thorough understanding of the process and risks involved. References: = IIA Standard 2201 - Planning Considerations and IIA Practice Guide: "Walkthroughs for Internal Auditors".

A control weakness occurs when there is a deficiency in internal controls that could allow errors or fraud to occur. While the act of buyers promptly updating the vendor listing might seem efficient, it could bypass necessary oversight and approval processes. This could lead to unauthorized or inappropriate vendors being added, increasing the risk of fraud or favoritism. Effective internal control requires that such updates be reviewed and approved by an independent party to ensure accuracy and appropriateness.
Best practices in internal control recommend segregation of duties and independent review processes to prevent unauthorized changes and ensure control integrity.