What factors should an auditor consider in determining whether financial statements are presented fairly in conformity with applicable financial reporting standards?

What factors should an auditor consider in determining whether financial statements are presented fairly in conformity with applicable financial reporting standards?

The auditor’s opinion that financial statements present fairly an entity’s financial position, results of operations, and cash flows in conformity with generally accepted accounting principles should be based on his or her judgment as to whether (a) the accounting principles selected and applied have general acceptance …

What must an auditor consider when undertaking an audit?

The auditor must consider whether the accounting policies applied are consistent with the applicable financial reporting framework. 3. Objectives and strategies and related business risks The management of the company should define the objectives of the business, which are the overall plans for the company.

Why might an auditor issue a disclaimer of opinion after an audit?

When an auditor issues a disclaimer of opinion report, it means that they are distancing themselves from providing any opinion at all related to the financial statements. They may not have been able to decipher the correct nature of some transactions or to secure enough evidence to support good financial reporting.

How is the auditors responsibility for expressing the opinion on financial statements disclosed in the standard unmodified report?

How is the auditors’ responsibility for expressing the opinion on financial statements disclosed in the standard (unmodified) report for a nonpublic company? Stated explicitly in the opinion paragraph.

Can auditor prepare financial statements?

For many audit engagements, the auditors prepare financial statements. Management must understand that preparation of financial statements by the auditor does not change the fact that management is responsible for those financial statements. …

Why should auditors independent?

An independent auditor is typically used to avoid conflicts of interest and to ensure the integrity of performing an audit. Independent auditors are often used—or even mandated—to protect shareholders and potential investors from the occasional fraudulent or unrepresentative financial claims made by public companies.

How is auditor independence achieved?

The SEC rules on audit independence are often organized into five key areas: (A) Prohibited Non-Audit Services; (B) Audit Committee Pre-Approval of Services; (C) Partner Rotation; (D) Conflict of Interest; and (E) Increased Communication and Disclosure.

What is the role of auditing in accounting?

An auditor, for the purpose of accounting, is a person whose job it is to make sure that information reported on financial statements is true and accurate and that the financial statements are prepared according to GAAP principles.

Who must perform an audit?

An audit must be performed by persons who can make sound judgments relating to complex accounting issues. a. True b. False misstatement. a. True b. False

What is the role of an auditor?

Auditors are responsible for having the appropriate competence and capabilities to perform the audit, complying with ethical requirements, and maintaining professional skepticism throughout the audit. a. True b. False An audit must be performed by persons who can make sound judgments relating to complex accounting issues. a. True b. False

What is an additional audit review?

A review of audit documentation by an additional person (normally, a partner or equivalent with the firm) who has not been involved with the audit to ensure that the quality of the audit work and reporting is consistent with the quality standards of the public accounting firm.

What are the responsibilities of a false auditor?

False Auditors are responsible for having the appropriate competence and capabilities to perform the audit, complying with ethical requirements, and maintaining professional skepticism throughout the audit. a. True b. False An audit must be performed by persons who can make sound judgments relating to complex accounting issues.