Week 10 Tutorial Questions Solutions

Week 10 Tutorial Questions Solutions - ACCT1501 2011S1 Week...

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ACCT1501 2011S1 Week 10 Tutorial Questions Solutions Tutorial Questions : DQ 6.3, 6.11; Problems 6.5, 6.22, 6.24; Case 8B Discussion Question 6.3 The purpose served by the auditor’s report is to provide a competent and independent opinion on the fairness of the financial statements. It is not a guarantee but rather an opinion that the financial statements have been properly drawn up to give a true and fair view in accordance with the provisions of the Corporations Act 2001 and applicable accounting standards. The standard auditors’ report consists of scope, a statement on independence and opinion paragraphs. The scope paragraph describes the responsibilities of directors and the approach to the audit. Concerning independence, it is stated that the company follows applicable independence requirements of the Australian professional and ethical pronouncements and the Corporations Act 2001.The opinion paragraph explains the auditors’ view that the financial statements are fairly stated and in accordance with GAAP. The auditor adds credibility to the financial information by reducing bias (increasing fairness and objectivity), reducing error, promoting adherence to standards of presentation, classification and calculation, and being willing to stand up for the result (taking responsibility). The audit is important in verifying that management has acted appropriately or at least in verifying how management has acted as stewards of the investor’s share of the company. Since the audit adds credibility investors can have
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Week 10 Tutorial Questions Solutions - ACCT1501 2011S1 Week...

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