Chapter 13 - The Reporting Function

Question 1

Reports to management

Answer 1

Purpose is for the auditor to communicate deficiencies spotted in the clients internal controls and systems so the management can decide whether to improve for next year.

Deficiencies, implications, recommendation, management responses

Auditor will look at these when planning the next year order to see what changed have been made.

Question 2

Unmodified audit opinions

Answer 2

Sufficient to and appropriate evidence gathered with no material misstatements or omission exist in the FS

Question 3

Express opinions for unmodified audit opinions

Answer 3

FS show a true and fair view on companies performance
FS properly prepared in accordance to reporting framework
Directors report is consistent with all info from FS.

Question 4

Implied opinions for unmodified

Answer 4

RAPID!
Returns received from branches not visited.
Accounts are in accordance with documents
Proper accounting records
Information and explanations from auditor
Directors transactions disclosed in FS

Question 5

Modifications to the audit opinion

Answer 5

If the auditor in not satisfied FS are not free from material misstated -> material but not persuasive = show t+f v except..
-> material and persuasive = adverse (do not show)
S&a evidence -> = qualified opinion, show t f v expect from..
-> = disclaimer option, I do not know whether..