Chapter 12

Question 1

What are some cost of getting the audit opinion wrong?

Answer 1

someone demonstrate auditor owed them a duty of xaee and they suffered loss by relying on FS - could sue auditor
as member of ICAEW auditor could face disciplinary proceedings, fines and penalties

Question 2

What to consider about FS in the completion stage?

Answer 2

Do the FS comply with provisions of companies act 2006
Do the FS make sense
Has auditors report been drafted properly

Question 3

What to consider about the work done to support opinion?

Answer 3

If work done in line with audit plan
Right work has been done
Whether enough work has been done
Issue arising

Question 4

What is ISA 450?

Answer 4

Evaluation of misstatements identified during the audit requires auditor to accumulate misstatements identified during audit unless those misstatements are trivial

Question 5

What is the liquidation basis

Answer 5

Clear that client cannot be considered going concern the financial statements will need to disclose this and basis for preparing them will change to liquidation or break up basis

Question 6

What is a written representation?

Answer 6

Auditor required to obtain certain written representations from management as part of its audit evidence, These will usually be collated and finalised in completion stage