Chapter 1- Concept And Need For Assurance

Question 1

Objective of Audit

Answer 1

Is to enable an auditor to convey an opinion as to whether or not the financial statements of an entity are prepared according to an applicable financial reporting framework

Question 2

Financial Statements

Answer 2

A structured representation of historical financial information including disclosures, intended to communicate an entity’s economic resources or obligations at a point in time or the changes therein for a period of time in accordance with financial reporting framework

Question 3

Components of financial statements

Answer 3

1. Statement of financial position
2. Statement of profit or loss and other comprehensive income
3. Statement of changes in equity
4. Cash flow statement
5. Notes to the financial statements
6. Comparative information prescribed by the standard

Question 4

Applicable financial reporting framework

Answer 4

The financial reporting framework adopted by management and where appropriate those charged with governance in the preparation of the financial statements that is acceptable in view of the nature of the entity and the objective of the financial statements