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a) True and fair view as used in audit report
True and fair view means the accounts presented comply with the requirements of international
financial reporting standards, the company's Act and other relevant legislation.
Types of audit opinions which the auditor may express in his/her audit report.
- Unqualified opinion
When the auditor is satisfied in all material respects that enables him to express the required
opinion on the financial statements without any reservations. This is sometimes called a clean
opinion. This is expressed when the auditor concludes that the financial statements give a true
and fair view in accordance with the relevant financial reporting framework.
- Qualified audit opinion (except for opinion)
This is expressed when the auditor concludes that an unqualified opinion cannot be expressed but
that the effect of any disagreement with management or limitation on scope is not so material
and pervasive as to require an adverse opinion or disclaimer of opinion. A qualified report
implies that all other aspects of the financial statements are okay except for the effects of the
matter to which the qualification relates.
- Disclaimer of opinion
This is issued when the possible effect of a limitation on scope or uncertainty is so material and
pervasive that the auditor has not been able to obtain sufficient appropriate audit evidence and as
a result he is unable to express an opinion on the financial statements. A disclaimer of opinion
implies that the auditor is unable to form an opinion because sufficient audit evidence could not
be obtained.
- Adverse opinion
This is expressed when the effects of a disagreement is so material and pervasive to the financial
statements that the auditor concludes that a qualification of the report is not adequate to disclose
the misleading or incomplete nature of the financial statements. The auditor states that due to the
nature of the disagreement in his opinion the financial statements do not show a true and fair
view.
b) Matters an auditor should include in the scope paragraph of his/her report.
• Responsibilities of client to give/maintain proper record ()I' account and prepare financial
statements showing true and fair view.
• A description of the work to be carried out
• Accounting principles used in the preparation of financial statements
• A description of the audit work and the fact that the audit was carried out on a test basis
• Statement that the audit was planned and performed to obtain reasonable assurance about
the financial statements and are free from material misstatements.
• The statement that the audit was conducted in accordance with international standards on
auditing
• The statement that auditing is a limited exercise and cannot guarantee 100% accuracy and
completeness.
Kavungya answered the question on May 15, 2019 at 09:02
- An audit trainee in Able & Associates, a firm of certified public accountants, was requested by
his audit senior to draft file auditors' report for a...(Solved)
An audit trainee in Able & Associates, a firm of certified public accountants, was requested by
his audit senior to draft file auditors' report for a client after the completion of the field work
audit.
He has presented the following draft report to the audit senior:
Auditors' report
We have audited the accompanying financial statements of the client.
In our opinion, the financial statements correctly show the account balances and comply with
the Companies Act
Able & Associates
Certified Public Accountants
Required;-
Describe the omissions in the draft report presented by the audit trainee to the audit senior of
Able & Associates.
Date posted: May 15, 2019. Answers (1)
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Date posted: May 15, 2019. Answers (1)
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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)
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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
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Date posted: May 15, 2019. Answers (1)
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i) Define the term "test data".
ii) Explain three ways of...(Solved)
Analyze the distinguishing features of computer based systems which an auditor must
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i) Define the term "test data".
ii) Explain three ways of using test data in an audit.
Date posted: May 15, 2019. Answers (1)
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b) Argue the case for and against a company outsourcing its electronic data processing to...(Solved)
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b) Argue the case for and against a company outsourcing its electronic data processing to a
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Date posted: May 15, 2019. Answers (1)
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(CAATs)
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Date posted: May 15, 2019. Answers (1)
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Date posted: May 15, 2019. Answers (1)
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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)
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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
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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)
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Date posted: May 15, 2019. Answers (1)
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Date posted: May 15, 2019. Answers (1)
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transactions...(Solved)
Application controls in confirmation technology are designed to ensure the integrity of the
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Date posted: May 15, 2019. Answers (1)