Drawing conclusions based on the audit evidence obtained 4 Sufficient

Drawing conclusions based on the audit evidence

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Drawing conclusions based on the audit evidence obtained 4. Sufficient Appropriate Audit Evidence and Audit Risk **exam trick: weak internal control adverse opinion (i.e. AMEX cc bill – you don’t manually add it up bc you think they have strong internal control or gas station guy ex.) 5. Compliance with GAAS Reports on Audited Financial Statements *See Becker update A1-12 to A1-44 Forming an Opinion on The Financial Statements The auditor should form an opinion on whether the financial statements are presented fairly, in all material respects, in accordance with applicable financial reporting framework. Fair Presentation in Accordance with Applicable Financial Reporting Framework 1. Adequate disclosure 2. Consistent application reporting 3. Acctg estimate made by mgt are reasonable 4. Information is relevant, reliable, comparable, and understandable 5. Understand the effect of material transaction and events 6. Appropriate terminology 7. Fairly presented 8. Represents the underlying transaction
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(previously known as Unqualified Opinion) = Clean Opinion Unmodified Audit Opinion The auditor should express an unmodified opinion when the auditor concludes that the financial statements are presented fairly, in all material respects, in accordance with applicable financial reporting framework. The auditor’s report should be in writing: Title States the auditor is independent in the report title Address GR: Not to mgt. Generally to the company, BOD, stockholders or other 3 rd party Introduction Paragraph 1. Identify the entity whose FS have been audited 2. State the FS have been audited 3. Identify the title of each FS 4. Specify the date(s) or period(s) covered by each FS Management’s Responsibility for the Financial Statement => MR DIM M R – the auditor’s report should include a section with the heading “ Management’s Responsibility for the Financial Statements” that includes: 1. An explanation the mgt is responsible for the preparation and fair presentation of the FS in accordance with the applicable Financial Reporting Framework; and D I M – 2. a statement that the responsibility includes the design , implementation , and maintenance of internal control relevant to the preparation and fair presentation of FS that are free from material misstatement, whether due to fraud or error. Auditor’s Responsibility => REPPORTS CRAME R – Auditor should include a section with the heading “Auditor’s Responsibility ” that’s includes: E – 1. a statement that the responsibility of the auditor is to express an opinion on the FS based on the audit. 2. a statement that the audit was conducted in accordance with auditing standards generally accepted in the United States of America P – 3. a statement that those standards require that the auditor plan and perform the audit to obtain reasonable assurance about whether the FS are free from material misstatement P – 4. a description of the audit that: O a. an audit involves performing procedures to obtain audit evidence about the
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  • ReginaldWhite
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