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• Appropriate title
An appropriate title such as the independent auditors report distinguishes the Auditors Report
from any other reports that may be annexed to the annual report and Financial Statements.
• The Auditor's report should be appropriately addressed
Usually the auditor's report is addressed to the members on whose behalf the audit is carried out.
For practical reasons, it also limits the users of the auditor's report.
• Introductory paragraph
This identifies the Financial Statements audited. Under the Companies Act, Financial Statements
or Accounts consist primarily of the Balance Sheet, Profit and Loss account and notes to the
account. International Accounting Standards on Cash Flow Statements requires auditors to
recognize the Cash Flows as part of the Financial Statements.
The auditor's report relates to the above statements only. However, the published Financial
Statements that are sent to the readers include other reports that may contain financial
information such as the Chairman's Statement. The Directors Report, the detailed Profit and Loss
account and other statistical information.
Although the auditor reviews these other statement or reports, he does not report on them. It must
therefore be clear in his report that he is not reporting on these other statements otherwise the
financial information contained therein could have an unmerited air of authenticity.
It is felt that most readers of auditor's reports and Financial Statements assume that the auditor
prepared the Financial Statements. It's necessary for the auditor to clarify that the preparation of
Financial Statements is the responsibility of directors.
• Paragraph on the scope of the audit
The reader requires assurance that the auditors procedures were authoritative and through. The
auditor therefore needs to state that they have audited in accordance with International Standards
of Auditing.
It is felt within the profession that readers expert auditors to detect and report on material errors
and frauds. It is not practicable within the constraints of auditing to detect all material
misstatements be they as a result of frauds or errors. And even though an audit shouldn't be
relied upon for the detection of errors and irregularities, the auditor must arrange his audit in
such a manner as to have reasonable assurance that the Financial Statements are free of material
misstatements. it is important to inform the reader that auditing is a limited exercise that cannot
guarantee 100% completeness and accuracy. That the auditor examines items a test basis not all
of them and that in valuing assets and liabilities there is subjectivity involved.
• Opinion paragraph
The report should clearly state the auditor's opinion as to whether the financial statements give a
true and fair view in accordance with the relevant financial reporting framework and whether
they comply with the companies Act requirements.
• Dating the audit report:
Clearly specifies the date the auditor committed himself to his opinion so that any subsequent
developments are considered in the light of that date.
• Auditor's address
• Signature in the name of the audit firm and location of the auditor i.e. office
Kavungya answered the question on May 15, 2019 at 08:52
- (a) Explain two types of qualifications made by the auditor when there is a disagreement.
(b) Briefly explain the matters that form part of the opening...(Solved)
(a) Explain two types of qualifications made by the auditor when there is a disagreement.
(b) Briefly explain the matters that form part of the opening paragraph in an audit report.
Date posted: May 15, 2019. Answers (1)
- Analyze four types of auditor's opinions(Solved)
Analyze four types of auditor's opinions
Date posted: May 15, 2019. Answers (1)
- Discuss three ways in which limitation of the scope of the auditors work could occur(Solved)
Discuss three ways in which limitation of the scope of the auditors work could occur
Date posted: May 15, 2019. Answers (1)
- Describe seven basic elements of an auditor's report.(Solved)
Describe seven basic elements of an auditor's report.
Date posted: May 15, 2019. Answers (1)
- a) Describe five statutory disclosures that an auditor is required to make in his audit report.
b) When there is a disagreement between the auditor and...(Solved)
a) Describe five statutory disclosures that an auditor is required to make in his audit report.
b) When there is a disagreement between the auditor and the management, the auditor is
able to conclude objectively that he has received all information and explanations
necessary for the purpose of the audit. However, his conclusion differs-with the position
taken by management or with the view given by the financial statements.
With reference to the above statement, explain five circumstances that might give rise to
disagreements between the management and the auditor.
Date posted: May 15, 2019. Answers (1)
- In the context of computer based accounting systems:
a) Identify and explain the program controls which are developed to minimise errors in the
processing of records.
b) Highlight...(Solved)
In the context of computer based accounting systems:
a) Identify and explain the program controls which are developed to minimise errors in the
processing of records.
b) Highlight two types of computer files which are used for the processing of data.
c) Summarise the ways in which an auditor could use a file interrogation software in the
course of his/her audit work.
Date posted: May 15, 2019. Answers (1)
- Analyze the distinguishing features of computer based systems which an auditor must
consider in an audit engagement.
i) Define the term "test data".
ii) Explain three ways of...(Solved)
Analyze the distinguishing features of computer based systems which an auditor must
consider in an audit engagement.
i) Define the term "test data".
ii) Explain three ways of using test data in an audit.
Date posted: May 15, 2019. Answers (1)
- a) Explain the two main types of computer assisted audit techniques.
b) Argue the case for and against a company outsourcing its electronic data processing to...(Solved)
a) Explain the two main types of computer assisted audit techniques.
b) Argue the case for and against a company outsourcing its electronic data processing to a
computer bureau.
Date posted: May 15, 2019. Answers (1)
- Outline six benefits that could be derived from using Computer Assisted Audit techniques
(CAATs)(Solved)
Outline six benefits that could be derived from using Computer Assisted Audit techniques.
(CAATs)
Date posted: May 15, 2019. Answers (1)
- Identify six controls that could be instituted in a new computer based accounting system to
prevent unauthorized changes to data files.(Solved)
Identify six controls that could be instituted in a new computer based accounting system to
prevent unauthorized changes to data files.
Date posted: May 15, 2019. Answers (1)
- Explain six ways in which audit software could be used in an audit.(Solved)
Explain six ways in which audit software could be used in an audit.
Date posted: May 15, 2019. Answers (1)
- Jikaze Limited operates a computerised purchases system. Invoices and credit notes are posted to
the purchases ledger by the purchases department. The computer subsequently raises a...(Solved)
Jikaze Limited operates a computerised purchases system. Invoices and credit notes are posted to
the purchases ledger by the purchases department. The computer subsequently raises a cheque
when the invoice is due for payment.
Required:
Describe five controls that should be in operation over the addition, amendment and deletion or
suppliers in the computer system.
Date posted: May 15, 2019. Answers (1)
- a) During an audit. the auditor uses a combination of compliance tests or control, analytical
procedures and detailed substantive procedures. When the information system is computer
based,...(Solved)
a) During an audit. the auditor uses a combination of compliance tests or control, analytical
procedures and detailed substantive procedures. When the information system is computer
based, the detailed tests involve the use of manual techniques and computer audit
programs.
Required:
Explain three manual techniques that an auditor could use in the audit of a computer based
information system.
(b) An audit trial can be described as a series of cross-references that enable the auditor to
Follow a transaction from cradle to grave and vice versa and to check the operations
performed at each stage of processing.
The transformation from manual accounting systems to fully computer based information
systems has led to the loss of audit trail such that audit trials are often now:
• Available in machine readable form only or
• Retained only as long as is necessary for the system to verify the transaction.
Required:
Explain the different ways auditors overcome these problems of loss of audit trail.
Date posted: May 15, 2019. Answers (1)
- Briefly explain the following types of audit software
i) Generalised audit software.
ii) Purpose written programs.
iii) Utility programs.(Solved)
Briefly explain the following types of audit software
i) Generalised audit software.
ii) Purpose written programs.
iii) Utility programs.
Date posted: May 15, 2019. Answers (1)
- Summarise ten benefits that could accrue to the auditor from automating audit procedures(Solved)
Summarise ten benefits that could accrue to the auditor from automating audit procedures
Date posted: May 15, 2019. Answers (1)
- Application controls in confirmation technology are designed to ensure the integrity of the
accounting records. They relate to procedures used to initiate, record, process and report
transactions...(Solved)
Application controls in confirmation technology are designed to ensure the integrity of the
accounting records. They relate to procedures used to initiate, record, process and report
transactions or other financial data.
Date posted: May 15, 2019. Answers (1)
- a) Define the term "live data" as used when auditing through the computer.
b) Describe three disadvantages of using live data testing(Solved)
a) Define the term "live data" as used when auditing through the computer.
b) Describe three disadvantages of using live data testing
Date posted: May 15, 2019. Answers (1)
- a) Discuss. four matters that an auditor should take into consideration in determining
whether or not to use Computer Aided Audit Techniques (CAATs).
b) Describe three practical...(Solved)
a) Discuss. four matters that an auditor should take into consideration in determining
whether or not to use Computer Aided Audit Techniques (CAATs).
b) Describe three practical ways in which auditors might use laptops in the audit work. .
c) Explain three controls that auditors should implement when using laptops during audits.
Date posted: May 15, 2019. Answers (1)
- a) Distinguish between "vouching" and "verification".
b) Outline the audit procedures you would carry out to verify the following items
appearing in the financial statements of a...(Solved)
a) Distinguish between "vouching" and "verification".
b) Outline the audit procedures you would carry out to verify the following items
appearing in the financial statements of a client:
i) Cash in Hand,
ii) Loan to an employee.
iii) Fire insurance premium on factory building,
iv) Sales commission paid to an agent.
Date posted: May 15, 2019. Answers (1)
- a) During the audit of cash in bank, an auditor should seek to obtain standard bank
confirmations from each-hank with which the client conducted business during...(Solved)
a) During the audit of cash in bank, an auditor should seek to obtain standard bank
confirmations from each-hank with which the client conducted business during the period
under audit.
Required;
i) Explain the importance of an auditor obtaining confirmations from the client's bank.
ii) Outline the steps followed by an auditor when obtaining confirmations from the
client's bank.
b) Describe the audit procedures an auditor would carry out when verifying a client's bank
reconciliation.
Date posted: May 14, 2019. Answers (1)