S2 reporting and assurance Flashcards
what does the auditor report
consider if information given in the directors report is consistent with the accounts
Directors remuneration report
Corporate governance disclosures
what is the premise of an audit
audit conducted on the premise that management have acknowledged certain responsibilities that are fundamental to the conduct of an audit
what’s the objective of an audit in terms of AQ
audit quality - the probability that the auditor will both discover a breach in the clients accounting system and report it
Encompasses key elements that create an environment which maximises the likelihood of consistent quality audits
Underpinned by auditor competence and independence
TCWG oversee the reporting process and communicate with auditors
what’s involved in forming an audit opinion
ISA 700
Auditors have to communicate eked audit matters
Promote credibility and user understanding
Exercise professional judgement and scepticism
Consider material impacts
Evaluate policies, reasonableness of estimates, appropriateness of disclosures
Unmodified or unqualified = FS prepares in all material respect sin accordance with framework
what are key audit matters
enhance communicative value of report
Provide transparency about audit
Assist users in understanding
Provide intended users a basis to further engage with management
Areas of higher assessed risk of material misstatement
Areas in FS that involved significant management jduegemtn
Significant events or transactions
Separate section in audit report and explain why its a KAM and how it was addressed
what is a modified audit report
qualified opinion
Disclaimer of opinion
Limitation of scope
Adverse opinion
Disagreement with management
depends on material but not pervasive —> qualified
Pervasive and effects are throughout the FS not just one element —> disclaimer or adverse
Amend opinion heading and give reasons - quantify effect on the accounts
what is an emphasis of matter paragraph
a matter presented in FS that id of fundamental importance to the users understanding of the FS
Added where there is significant uncertainty - doesn’t effect audit opinion
Determine significance by considering risk, range of possible outcomes, potential consequences and if directors have adequately accounted for and disclosed
what is other matter paragraph
communicate a matter other than those presented in FS that is relevant to understanding
what is communication with TCWG
overall approach and scope of the audit including scope limitations
Accounting policies
Adjustments
Material events which could jeopardise GC
Disagreements with management
Expected modifications
Material weaknesses
what are assurance engagements
assessing and reporting on a company’s non financial reporting information
Reporting on compliance with laws
Independent assurance on sustainability engagements
Offers limited assurance due to scope
Negative assurance
