Module 21: Reporting

Question 1

Examples to cover DIFFERENT CIRCUMSTANCES and the audit report will require to be tailored accordingly for:

Answer 1

• listed companies
• whether the accounts are prepared under UK accounting standards, IFRs adopted by the EU or another framework
• Whether the company prepares group accounts and if parent company accounts are included within the same document
• inclusion of a duty of care disclaimer
• small companies

These different circumstances will result in DIFF WORDINGS of the audit report
e.g. diff accounting framework may need to be referred to

Question 2

Audit opinion: unqualified/unmodified

Answer 2

issued where the auditor is satisfied that the financial statements give a TRUE and FAIR VIEW and PREPARED in accordance with legislation, regulations and the identified financial reporting framework

Question 3

Emphasis of matter

Answer 3

Page 1138

If a matter is NOT APPROPRIATELY PRESENTED OR DISCLOSED this is a MATERIAL MISSTATEMENT => issue a MODIFIED OPINION

Question 4

What would warrant an emphasis of matter?

Answer 4

Page 1141

to have a sig effect on an entity’s financial position => in order to warrant an EoM paragraph in the audit report, the circumstances should have a PERVASIVE EFFECT on the FS

Question 5

Other Matters paragraph

Answer 5

• OUTLINE OF CIRCUMSTANCES WHY THE AUDITOR IS UNABLE TO WITHDAW from the engagement, despite mgmt imposing a limitation on their work
• an ELABORATION OF AUDITOR’S RESPONSIBILITIES

Question 6

Other reporting responsibilities: matters reported by exception under the CA 2006

Answer 6

Report by exception, the following failings (RAPID)

• Returns have not been received from BRANCHES NOT VISITED by auditor
• Accounts DO NOT AGREE with underlying records
• Proper accounting records have NOT BEEN KEPT
• Information and EXPLANATIONS necessary for the purposes of audit have NOT BEEN RECEIVED
• Directors’ emoluments (salary, bonuses, pension contributes) and other benefits disclosures specified by law are NOT COMPLETE

Question 7

GC conclusions in audit report

Answer 7

See page 10 in Mod 20 for table

Question 8

‘Comply or explain’ corp governance statements

Answer 8

auditor is not required to review the directors’ statement of HOW they have applied the provision of the code.
Auditor is ONLY REQUIRED to review the directors’ compliance statement in relation to SOME SPECIFIC PROV’Ns and some D’s statements required by the code

However, everything else constitutes part of ‘other information => auditor must READ for inconsistencies that will be material misstatement