Audit Basics Flashcards
Purpose Corporate governance true and fair
1
Q
What is the purpose of audit
A
- express an opinion on whether f.s. are proper and adequate.
- free from material misstatement
- true and fair view
2
Q
what is corporate governance
A
means by which a company is operated and controlled
3
Q
Code of corporate governance (5)
L.E.A.R.R
A
- leadership : effective board,chairman, clear division
- effectiveness : appropriate skills, knowledge, timely
- accountability. : risk assessment, responsible
- remuneration : designed to promote long term success
- relations with shareholders : mutual understanding of objectives
4
Q
Membership of Audit Committee
A
-independent non executive directors
at least 3 members
-one member must have recent and relevant financial experience ( QUALIFIED)
-appointments up to 3 yr period
5
Q
Functions Of Audit Committee
A
- monitoring integrity of F.S
- Reviewing internal financial controls
- recommendations into external auditor
- engaging with external auditor to supply non audit services
6
Q
Benefits of Audit Committee
A
- Stronger control environment helps to create culture of compliance
- improved credibility of F.S. due to impartial reviews
- increased public confidence
- easier and cheaper to arrange finance
7
Q
What is True and Fair
A
- fundamental accounting concept
- free from bias and manipulation
- financial values should be accurate
