International Auditing and assurance.pptx lecture notes MBA.pptx - International Auditing and assurance MFA 557 AUDITING OVERVIEW OUTLINE The meaning of

International Auditing and assurance.pptx lecture notes MBA.pptx

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International Auditing and assurance MFA 557
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OUTLINE The meaning of audit The meaning of assurance Statutory audit International Standards on Auditing (ISAs) Advantages and Limitations of audit and assurance Current audit issues AUDITING OVERVIEW
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An audit is an official examination of the accounts ( or accounting systems of an entity ( by an auditor) The main objective of an audit is to enable the auditor to convey an opinion as to whether or not the financial statements of an entity are prepared according to an applicable financial framework The meaning of Audit
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Legislation within each individual country ( for example, in Ghana. Companies Act 1963 (Act 179) , replaced by Act 992) , 2019. Insurance Act 2006 (Act 724), National Pensions Act 2008 (Act 766) and Accounting standards ( for example IFRS) NB. The auditor seeks to express an opinion as a result of the audit work he does. ( Will discuss the type of work in subsequent topics) The applicable financial framework is decided by:
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The shareholders own the company The company is managed and controlled by its directors THEORETICAL BASIS Agency Stewardship Stakeholder Social Contract Resource dependency Political Legitimacy CONCEPTS OF ACCOUNTABILITY, STEWARDSHIP AND AGENCY
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They have a stewardship role- look after the assets of the company and manage them on behalf of the shareholders. Agency relationship exist between the shareholders and the directors of the company. The Directors- Stewards
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The concept applies whenever one person or group of individuals acts as an agent on behalf of someone else ( the principal) The agent has a legal duty to act in the best interests of the principal and should be accountable to the principal for everything that he does as agent Agency Relationship
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An auditor reports to the shareholders on the financial statements produced by a company’s management The auditors report: independence, materiality and true and fair view Directors Financial statements Shareholders Audit report on financial statements
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Independence True and fair view and present fairly In all material respects The key features of the audit report are as follows:
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“Assurance” means confidence: In an assurance engagement an assurance firm is engaged by one party to give an opinion on a piece of information that has been prepared by a another party. The opinion is an expression of assurance about the information the information that has been reviewed. It gives assurance to the party that hired the assurance firm that the information can be relied on. The meaning of assurance
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Audit: this may be external audit, internal audit or a combination of the two Review Assurance can be provided by:
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The degree of assurance will depend on: the amount work performed in carrying out the assurance process and the results of that work Levels of assurance
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Reasonable Assurance- A high ( but not absolute) level of assurance provided by the auditor in a positive form e.g “in our opinion the accounts
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  • Fall '19
  •  Legislation,  Accounting standards

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