2: Statutory Audit and Regulation Flashcards
What does IFAC stand for?
International Federation of Accounting
What does the IFAC do?
FAC guides efforts to achieve
- international…
- technical
- ethical
- educational
statements for the accountancy profession.
What does IAASB stand for?
International Auditing and Assurance Board
What is the goal of the IAASB?
The development of a set of international standards that are accepted worldwide
What are ISA’s?
International standards on auditing
Who issues ISA’s
The IAASB
What do ISA’s do?
Provide guidance on the performance of an audit
What kind of financial information do ISA’s apply to?
Historical financial information
What context are ISA’s written in?
They are written in the context of an audit of financial statements by an independent auditor
If an auditor deems it necessary to depart from the guidance of an ISA what must they do?
Justify the reason
What do ISA’s not overide?
Local regulation/Law
What happens if the local regulation does not apply with the ISA?
The IFAC encourage the local regulations to change their regulation so it does comply with the IAS’s
What are four rights of the auditors?
✓ access to accounting records;
✓ require information and explanations as necessary;
✓ receive notice of, attend and speak at general meetings of shareholders;
✓ rights relating to their removal, resignation and retirement.
What are the duties of an auditor?
To report to the shareholders of the entity on whether or not the financial statements show a true and fair view and have been prepared in accordance with the applicable reporting framework.
When can the directors appoint an auditor?
When it is the companies first accounting period
or
To fill a vacancy
When can members/shareholders appoint an auditor?
By an ordinary resolution during a period of appointing auditors if the directors fail to do so
Who else can appoint an auditor other than members and directors?
The secretary of state.
When can the secretary of state appoint an auditor?
If no auditors have been appointed and need to be appointed.
What must an auditor do when they resign?
- Submit a written notice with a statement of circumstances
- Even if there are no circumstances this should need to be communicated to shareholders
What can auditors do when they resign?
Call and extraordinary general meeting to discuss the situation
The auditor can speak at the meetings on any matters which concerns them as the auditors
Who must be notified when an auditor resigns?
The regulatory body
What do auditors need when they are being removed?
Notice of removal of the auditor
What happens with the meeting when an auditor is removed?
- Meeting organised within a timely manner
- Auditors can make representations to why they should stay in office
- The auditor can speak at the meetings on any matters which concerns them as the auditors
Who must be notified when an auditor is removed?
The regulatory body
