Describe objective of independent financial statement audit

Assignment Help Auditing

Reference no: EM132368721

Topic - Introduction and overview of audit and assurance

On completing the activities associated with this topic you should be able to:

1. Define an assurance engagement.

2. Differentiate between different levels of assurance.

3. Differentiate between the different role of the preparer and the auditor.

4. Discuss the different regulators and regulations surrounding the assurance process.

5. Justify the demand for audit and assurance services.

6. Verify the audit expectation gap.

Reading guide - References: Moroney, Campbell and Hamilton - Chapter 1.

Standards: ASA 200: Overall Objectives of the Independent Auditor and the conduct of an Audit in Accordance with Australian Auditing Standards.

ASRE 2410: Review of a Financial Report Performed by the Independent Auditor of the Entity.

ASAE 3000: Assurance Engagements Other than Audits or Reviews of Historical Financial Information.

Review questions:

1. What does 'assurance' mean in the financial reporting context? Who are the three parties relevant to an assurance engagement?

2. What qualities must an 'assurer' have in order for you to feel that their statement has high credibility?

3. Explain the 'audit expectation gap'. Why do you think auditors do not give users what they want?

4. What is the difference between reasonable assurance and limited assurance?

5. Describe the objective of an independent financial statement audit.

6. Explain the system of reviewing the quality of audits performed by registered company auditors.

7. Explain the difference between IAASB and the AUASB.

8. An assurance engagement involves evaluation or measurement of subject matter against criteria. What criteria are used in a financial report audit?

9. What are key audit matters? How do these affect the format of the audit report?

Annual report: Download the 2017 Wesfarmers Limited annual report and review the answers to the various questions below.

10. Explain the difference between the (1) auditor's responsibility and (2) director's responsibility for the financial report being audited.

11. Explain the meaning of 'true and fair' presented in the audit report.

12. Refer to the auditor's opinion in the audit report. Explain whether it is a positive or negative statement.

13. Find the disclosures explaining the amounts paid to auditors. How much was the auditor paid for the audit and non-audit, or other, services?

Reference no: EM132368721

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