Topic 9 - Part 2 The Audit Report Flashcards
What is The Objective of an Audit?
To obtain reasonable assurance that: ■ the financial report is free from material misstatement; and ■ is prepared in accordance with the applicable financial reporting framework.
To Whom Does the Auditor Report? 5
■ The Members Shareholders) ■ Governing Body ■ Management ■ ASIC ■ Debtors
what influences the auditors reporting responsibility?
■ Corporations
Act/ Other legislation
■ Professional Requirements
■ Auditing Standards
what are the two Forms of audit Opinion?
Unmodified or Modified
What is an unmodified opinion?
■ FR is prepared in all material respects
with the applicable financial reporting
framework
What is a modified opinion?
■ FR not so prepared, or
■ Unable to obtain sufficient appropriate
evidence
Who are the addressees usually for the audit report?
To the Members
What is the Criteria against which the opinion is determined? 3
■ Compliance with the Corporations Act 2001
■ Compliance with Australian Accounting
Standards and the Corporations
Regulations 2001.
■ Compliance with International Financial
Reporting Standards (IFRS).
If there is Material Uncertainty Going Concern, can the auditor agree with FR?
Yes if the uncertainty has been adequately
disclosed in the financial report.
list three examples of things included in Key Audit Matters for the audit report
■ Areas of higher risk of material misstatement
■ Matters where significant judgement
■ The effects of significant events and/ or transactions.
If an item is a key audit matter, how must it be represented in the audit report? 3 things must be included
-must be described
separately
■ Reference to its disclosure in the FR
■ The reason for determining the matter to be a
Key Audit Matter.
■ How the matter was addressed during the audit.
what are the 3 sub categories under modified opinion?
Qualified,
Adverse, or
Disclaimer of Opinion
What are the Additional matters to which the
auditor draws the attention of users called? 2
■ Emphasis of Matter
■ Other Matter
what assumptions can be made if the auditors issue Unmodified Audit Report? 5
- compliance with Corp Act
- compliance with IFRS
- suff appr evidence obtained
- misstatements immaterial
- FR prepared in accordance with framework
what does Modified Audit Report mean?
The auditor’s opinion is modified and there are no other issues to be brought to the attention of the user. (unable to obtain evidence/disagree with mgmt.)
