Audit and Assurance

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What the roles of an auditor?
*Reviews the accounting information of a firm *Evaluating the accounting information
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What does an auditor not do?
*Check 100% of everything *Detect fraud *Have an opinion whether the financial statements are free from error *prepare the financial statements
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What is the ipact for the client of an assurance service?
1. Increase in confidence in the business 2. Reduces the risk for the business.
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What are the two types of assurance engagements does the framework allow?
1. Reasonable 2. Limited
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Within the Reasonable assurance service what does the practitioner do?
1. Gathers sufficent appropriate evidence 2. Does enough work to be able to draw reasonable conclusions 3. Concludes that the subject matter conforms in all material respects with identified criteria. 4. Report in the form of a postive opinion.
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What are the benefits of a statutory sudit service?
1. High qualty, reliable information circulates the market. 2. independent verification. 3. REduces the risk of managment bias, fraud and error. 4. Enhances creditability. 5. Deficiencies will be highlighted.
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What are the limitations of a statutory audit?
1/ Financial information includes subjective and judgemental matter. 2/Inherenet limitiations of control 3/Management represenations could be the only source of evidence. 4/ Evidence is persuasive not conclusive. 5. Not 100% of transactions
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What does the practioner do for a limited assurance engagement?
1/ Gathers sufficent and appropriate evidence. 2/ Gives a report in the form of a negative statement of opinion.
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What happens within a limited assurance engagement?
1/ Review the financial statement 2/ Risk assessment report 3/Performance management reports 4/Systems reliability reports 5/Reports on social and environment issues 6/ Reports on internal controls
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What does the Audit expectation gap consist of?
1/ Performance gap 2/ Reasonableness gap
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What is the Performance Gap?
1/ Deficient audit performance 2/Deficient audit standards. This is an issue because it means that the auditor isnt doing their job properly.
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What is the Reasonableness Gap?
Society expects auditors to examine every transactions, but i reality this is not what happens.
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Card 2

Front

What does an auditor not do?

Back

*Check 100% of everything *Detect fraud *Have an opinion whether the financial statements are free from error *prepare the financial statements

Card 3

Front

What is the ipact for the client of an assurance service?

Back

Preview of the front of card 3

Card 4

Front

What are the two types of assurance engagements does the framework allow?

Back

Preview of the front of card 4

Card 5

Front

Within the Reasonable assurance service what does the practitioner do?

Back

Preview of the front of card 5
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