Audit Reports Flashcards
(9 cards)
1
Q
A signed audit report
A
- Key deliverable- end result
- concludes if FS gives a ‘true and fair’ view
- Has developed over years especially following scandals
2
Q
The basis of an audit report (All companies)
A
- Title
- Addressee
- Identification of statements
- responsibilities of directors & auditors
- Generic scope of audit
- Opinion on FS
- Opinion on other matters in CA
- Date of report, address & signature of auditor
3
Q
Basis of an audit report- just quoted companies
A
- Explanations of audit work - 2013 extensions:
1. Assessed risks of material misstatement
2. Application of concept of materiality
3. Scope of audit – how issues of risk and materiality were addressed - Director’s remuneration
- Matters reported on by exception
- Corporate Governance
4
Q
Explicit meaning of unmodified opinion
A
FS give true & fair view
5
Q
Implicit meaning of unmodified opinion
A
- Proper accounting records have been maintained.
- All information and explanations have been received.
- Accounts and records are in agreement.
- Directors’ report is consistent with the accounts.
6
Q
ISA 706: EoM
A
- Relates to a matter ALREADY presented or disclosed in FS
- No disagreement with client
- Additional communication to draw users attention to matters (fundamental to users understanding)
7
Q
ISA 706: OM paragraph
A
- Relates to a matter NOT presented or disclosed in FS
- No disagreement with client
- Additional communication to draw users attention to matters (fundamental to users understanding)
8
Q
What is pervasive?
A
- Auditors judgement that item is not confined to one item
- Concerns about matter that’s a substantial portion of FS
- If disclosure than is fundamental to users understanding of FS
9
Q
ISA 705: Modifications to the opinion
A
This standard:
- States what grounds justify a modification
- States what wording should be used for a modification
- Provides guidance about what explanatory information should be included in the audit report
