The role of auditors and the audit report

Question 1

Who are auditors appointed by?

Answer 1

The directors

Question 2

What are the appointed to do?

Answer 2

To check the financial statements that have been produced.

Question 3

Who do auditors report to?

Answer 3

Shareholders

Question 4

What do they report about?

Answer 4

Whether the financial statements give a true and fair view of financial position of the company.

Question 5

When will the auditors report be unqualified?

Answer 5

If auditors believe that:
Financial statements provide a true and fair view of company’s performance and financial position.
They have been properly prepared.
Its consistent with the contents of financial statement.

Question 6

When will the auditors report be qualified?

Answer 6

If they believe that any part of financial statement has not been prepared properly and is significant enough to be brought to attention of the users of the accounts.

Question 7

How does integrity apply to the role of auditors?

Answer 7

Assessment of true and fair view must be honest opinion.

Question 8

How does objectivity apply to the role of auditors?

Answer 8

They must be independent of the company that they are auditing and not over-reliant on that company

Question 9

How does professional competence and due care apply to the role of auditors?

Answer 9

Must stay up-to-date with legal requirements and any changes within the profession

Question 10

How does confidentiality apply to the role of auditors?

Answer 10

Must not share sensitive information about performance or financial position

Question 11

How do professional behaviour apply to the role of auditors?

Answer 11

They must not do anything that damages the reputation of their profession.