summarising basic element of audit, accounting homework help
Basic elements of audit report | Explanation |
Title | The auditor’s report must have a title that clearly indicates that it is the report of the independent auditor. This signifies that the auditor has met all the ethical requirements concerning independence and therefore distinguishes the auditor’s report from other reports. |
Addressee | The addressee will be determined by law or regulation, but is likely to be the shareholders or those charged with governance. |
Introductory paragraph | This shall identify the entity being audited, state that the financial statements have been audited, identify the title of each statement that comprises the financial statements being audited, refer to the summary of significant accounting policies and other explanatory notes, and specify the date or period covered by each statement comprising the financial statements. |
Management’s responsibility for the financial statements | This part of the report describes the responsibilities of those who are responsible for the preparation of the financial statements. The report shall include a section headed ‘Management’s responsibility for the financial statements’ and describe management’s responsibility including the following:
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Auditor’s responsibility | The report shall include a section entitled ‘Auditor’s responsibility’. The report must state that the auditor is responsible for expressing an opinion on the financial statements based on the audit. This section must also state that the audit was conducted in accordance with International Standards on Auditing and ethical requirements and that the auditor planned and performed the audit so as to obtain reasonable assurance that the financial statements are free from material misstatement. The report must describe an audit by stating that:
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Opinion paragraph | If the auditor expresses an unmodified opinion on financial statements prepared in accordance with a fair presentation framework, the opinion shall use one of the following equivalent phrases:
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Other reporting responsibilities |
If the auditor is required by law to report on any other matters, this must be done in an additional paragraph below the opinion paragraph which is titled ‘Report on other legal and regulatory requirements’ or otherwise as appropriate. |
Auditor’s signature | The report must contain the auditor’s signature, whether this is the auditor’s own name or the audit firm’s name or both. |
Date of the report | The report must be dated no earlier than the date on which the auditor has obtained sufficient appropriate audit evidence on which to base the auditor’s opinion on the financial statements. |
Auditor’s address | The location where the auditor practises must be included. |
Required :
my teacher asked me to summarise the explanation as your understand, because I can not study all of them for the exam.
so summarise to acceptable words .
However , not all of the basic elements of audit need summarising like Addressee, Auditor’s address and Auditor’s signature