Category Archive for: Overall Objective of the Independent Auditor and the Conduct of an Audit in Accordance with International Standards on Auditing

QUESTIONS AND ANSWERS

Discuss role of IFAC (International Federation of Accountants) International Federation of Accountants (IFAC) was formed 1977. The mission of IFAC is the world wide development and enhancement of an accountancy profession with harmonize standards, able to provide services of consistently high quality in the public interest. It is a nonprofit, non-government,. non-political international organization of accountancy bodies. Membership in IFAC…

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Discuss qualitative characteristic of financial statement

Qualitative characteristics are: materiality and aggregation. Relevance. Reliability. Faithful presentation. Substance over form. Neutrality. Prudence. Completeness. Comparability. Consistency. Full disclosure. Understandability. Offsetting. Verifiability. Timeliness. Balance between benefit and costs. Balance between qualitative characteristic. True and fair. 1. MATERIALITY AND AGGREGATION There are two implications: Small amount of items may be aggregated. Violation of IAS may…

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Enumerate factors which may incline the auditor not to accept a nomination, for an audit previously carried out by another auditor?

Following factors may influence the auditor not to accept the nomination: Inability to serve the client. Conflict of interest with any existing client. Undue dependence on one client. Unusual pressures on management. Lack of cooperation from management. Excessive inherent risks. If the report of previous auditors was qualified, the possibility of repetition of such issues.. Inadequacy…

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Discuss expectation gap between auditor’s duties and public perception of such duties

A wide expectation gap appears in the following areas. The public assumes that the auditors’ opinion provides an assurance as to future viability of the enterprise. Professional standards require that when planning and performing audit procedures and evaluating the results thereof, the auditor considers the appropriateness of the going concern assumption. However, the audit report does not provide an assurance…

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TECHNICAL RELEASES ISSUED BY ICAP

Withdrawn – ( Capitalization of Interest on Loan ). Withdrawn – ( Financial Statement Presentation – Credit Cards). Withdrawn – ( Depreciation Treatment in Tax Holiday Companies). Withdrawn – ( Gratuity – Provision in the Accounts of Company _ ) IASB Standards-Council’s Statement en Applicability (Revised- 2005) —  Clarification Regarding Basis of Calculation of Workers Profit Participation…

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OBJECTIVE OF AN AUDIT

The objective of an audit is the expression of an opinion as to whether the financial statements give a true and fair view in accordance with the International Accounting Standards and in compliance with the local statutory requirements. The phrase “expression of an opinion” has following implications. Management is responsible for preparing financial statements. The auditor expresses his opinion…

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Nature of an audit of financial statements

Audit of financial statements is an assurance engagement. Assurance engagement means an assignment in which the auditor expresses an opinion in order to enhance credibility of a subject matter against a criteria. Following are the elements of an assurance engagement. A three party relationship involving a practitioner, a responsible party and intended users Responsible party is the person who…

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