W18 Reporting Flashcards

1
Q

What are the contents of an audit report

A

Title

Addressee

Auditors opinion

Basis of Opinion

Going concern (where applicable)

Key audit matters

Responsibilities of management

Auditors responsibilities

Other reporting responsibilities

Signature, auditors address and date

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2
Q

What are key audit matters

A

are those that in the auditor’s professional judgement were of most significance in the audit and are selected from matters communicated to those charged with governance

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3
Q

What types of opinion can an auditor give

A

Unmodified opinion
- f.s give a true and fair view

unmodified opinion but report contains additional communication
- f.s give a true and fair view but there is additional communication required to bring something to the attention of users

modified opinion
-f.s dont give a true and fair view or the auditor has been unble to obtain sufficient appropriate audit evidence to determine whether they do or don’t

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4
Q

Why are modified opinions given

A

The auditor concludes based on the evidence obtained that the f.s as a whole are not free from material misstatement

or

the auditor is unable to obtain sufficient appropriate audit evidence to conclude that the financial statements as a whole are free from material misstatement

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5
Q

Wwhat is pervasive

A

Pervaise effects on the f.s are those that in the auditors judgement

  • are not confined to specific elements, accounts or items of the finaancial statements
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6
Q

What is pervasive

A

Pervasive effects on the f.s are those that in the auditors judgement

  • are not confined to specific elements, accounts or items of the financial statements

or

  • if so confined, represent or could represent a substantial proportion of the financial statements

or

  • in relation to disclosures are fundamental to user’s understanding of the financial statements
  • the auditor comes to a conclusion as to whether the errors/omissions they found are

-material or material and pervasive

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7
Q

How can modified opinions be categorised

A

Qualified - on the basis of misstatement

Qualified - on the basis of an inability to obtain sufficient appropriate audit evidence

Adverse

Disclaimer

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8
Q

Modified opinion - on the basis of misstatement

How would the opinion be presented as

A

Given when the auditor concludes that the financial statements are materially misstated

◈ Opinion would be presented as

‘Except for the effects of the matter(s) described in the Basis for Qualified Opinion paragraph, the financial statements give a true and fair view’

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9
Q

Modified opinion on the basis of an inability to obtain sufficient appropriate audit evidence

How would the opinion be presented as

A

given when auditor cant obtain sufficient appropriate audit evidence to base their opinion but conclude, the possible effects on the f.s of undetected misstatements could be material but not pervasive

Opinion would be presented as

‘Except for the effects of the matter(s) described in the Basis for Qualified Opinion paragraph, the financial statements give a true and fair view’

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10
Q

Modified opinion - aadverse

How would the opinion be presented as

A

Given when the auditor concludes that misstatements, individually or in the aggregate are both material and pervasive

The financial statements do not give a true and fair view

Opinion would be presented as

‘Because of the significance of the matter(s) discussed in the Basis for Adverse Opinion paragraph, the financial statements do not give a true and fair view’

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11
Q

Modified Opinion - Disclaimer

How would the opinion be presented as

A

Given when the auditor is unable to obtain sufficient appropriate audit evidence on which to base the opinion, concluding that the possible effects on the financial statements of undetected misstatements, if any, could be both material and pervasive

Would be presented as
‘Because of the significance of the matter(s) described in the Basis for Disclaimer of Opinion paragraph, we have not been able to obtain sufficient appropriate audit evidence to provide a basis for an audit opinion. Accordingly, we do not express an opinion on the financial statements

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12
Q

What additional communication may the auditor be required to make in the auditors report

A

Auditor may be required to make additional communication even if the statements give a true and fair view

Material uncertainty related to goingconcern

  1. Emphasis of matter paragraph
  2. Other matter paragraph
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13
Q

Additional communication - material uncertainty related to going concern

A

This section is included where there is material uncertainty regarding the going concern status which has been adequately disclosed in the financial statements

◈ The auditor uses this section to draw the attention of the user to the clients disclosure note

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14
Q

Additional communication - emphasis of matter paragraph

A

refer to a matter that has been adequately presented or disclosed in the financial statements but in the auditor’judgement these matters are of such fundamental importance to the users’understanding of the financial statements that the users should have their attention drawn to it

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15
Q

Additional communication - other matter paragraph

A

included in the auditor’s report if the auditor considers it necessary to communicate to the users matters other than those presented and disclosed in the financial statements that, in their judgement, are relevant to understanding the audit, the auditor’s responsibilities, or the auditors report

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