Week 1

Question 1

what is an audit?

Answer 1

a systematic and independent examination of books, accounts, statutory records, documents and vouchers of an organisation to ascertain how far the financial statements as well as non-financial disclosures present a true and fair view of the concern

Question 2

five key syllabus areas

Answer 2

audit framework & regulation
planning & risk management
internal controls
audit evidence
review & reporting

Question 2

statutory = ?

Answer 2

required

Question 3

companies don’t have to have an audit unless they exceed which thresholds?

Answer 3

2/3 of the following
- Turnover does not exceed £10.2m
- Balance Sheet total does not exceed £5.2m
- Number of employees does not exceed 50

under the companies act 2006

Question 4

true and fair = ?

Answer 4

no bias, reasonable judgements have been made

Question 5

what are the statutory auditor responsibilities?

Answer 5

form an independent opinion on the truth & fairness of the financial statements

confirm they have been properly prepared in accordance with the companies act 2006

confirm the directors report is consistent with the financial statements

Question 6

why is an audit report important?

Answer 6

investors, employees, the government, suppliers, customer & the general public need to be able to use the financial statements

we need to be able to rely on the information contained within the financial statements