FAU syllabus

Audit - Miscellaneous Summary ^{5 / 9}

A positive opinion means that:

the accounts show a true and fair view.

A positive opinion means that:

the accounts show a true and fair view.

True means:

1) It is based on fact
2) Conforms with IFRS's or local GAAP
3) Represents underlying reports

True means:

1) It is based on fact
2) Conforms with IFRS's or local GAAP
3) Represents underlying reports

Fair means:

1) the FS are prepared impartially
2) No bias

Fair means:

1) the FS are prepared impartially
2) No bias

Auditors have to

1) Comply with ISAs (auditing standards)

2) Need to show some Professional scepticism

Auditors have to

1) Comply with ISAs (auditing standards)

2) Need to show some Professional scepticism

Professional scepticism means

1) You have an enquiry mind ( don't just rely on what mng tells you)
2) Look at what they tell you and ask yourself: "Is it consistent with the other evidence?"
3) Challenge assumptions - Let them explain why

Professional scepticism means

Positives an audit:

1) The information become more reliable
2) The information become more credible (believable)
3) It gets an Independent view
4) It deters mng fraud and bias

Positives an audit:

1) The information become more reliable
2) The information become more credible (believable)
3) It gets an Independent view
4) It deters mng fraud and bias

Negatives of an audit:

1) Audits are Subjective - auditing standards give you some room to manoeuvre

2) Limitations in what we can do - we can't see everything

3) Sample basis - we can't get 100% assurance. We do testing on sample basis only

4) Rely on mng - we are not there all the time, if someone wants to cover things up, they will do it.