Reports on Audited Financial Statements

Question 1

What are the overall objects of the auditor and the conduct of the audit?

Answer 1

To obtain reasonable assurance and to report on the financial statements.

Question 2

Define reasonable assurance.

Answer 2

A high, but not absolute, level of assurance to allow an auditor to detect a material misstatement.

Question 3

If a component’s financial statements are prepared using a different financial reporting framework from the group financial statements, when should the component auditor be referenced in the auditor’s report for the group financials statements?

Answer 3

Only if, the frameworks are similar to the criteria under the financial reporting framework for the group, and, if the group engagement team has obtained sufficient appropriate audit evidence to evaluate the appropriateness of the adjustments needed.