A. The fundamental purpose of financial statements audit is to provide independent assurance that management has presented a "true and fair" view of a company's financial performance and position. It underpins the trust and obligation of stewardship between those who manage a company and those who own it. To a publicly traded company, financial statements audit offers credibility; to its shareholders, it offers comfort; and to all stakeholders - including the market at large - financial statements audit offers confidence. (PricewaterhouseCoopers, 2019) Required: i. Explain the following tems in respect of financial statements audit: Independent assurance. True and fair view. а. b. ii. State your agreement or disagreement with the following statements. Justify your answer. The auditor is responsible to ensure that the client's financial statements are free from any misstatements. а. b. The auditor shall bear the liability should any of its clients being sued by a third party due to fraudulent financial statements.

A. The fundamental purpose of financial statements audit is to provide independent assurance that management has presented a "true and fair" view of a company's financial performance and position. It underpins the trust and obligation of stewardship between those who manage a company and those who own it. To a publicly traded company, financial statements audit offers credibility; to its shareholders, it offers comfort; and to all stakeholders - including the market at large - financial statements audit offers confidence. (PricewaterhouseCoopers, 2019) Required: i. Explain the following tems in respect of financial statements audit: Independent assurance. True and fair view. а. b. ii. State your agreement or disagreement with the following statements. Justify your answer. The auditor is responsible to ensure that the client's financial statements are free from any misstatements. а. b. The auditor shall bear the liability should any of its clients being sued by a third party due to fraudulent financial statements.

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

See similar textbooks

Similar questions

Auditors of both public companies and private entities _______. A. have a responsibility to report internal control weaknesses to the internal audit function, for immediate rectification B. have a responsibility to report internal control weaknesses directly to the SEC C. have a responsibility to report internal control weaknesses directly to the shareholders of an entity, who in turn should address their concerns to management D. have a responsibility to report internal control weaknesses to those charged with governance of the entity
Which of the following is true of the Audit Committee? O It is composed of a group of stockholders. O It includes both the internal auditors and the external auditors of a company. It is the group that conducts the audit of a company. Its main purpose is to report errors on the company's financial statements to the SEC. It is another term for the internal auditing department of a company.
Management's assertions in the financial statements are of relevance to the audit process because a. they are the procedures that will be performed by the audit team. b. they are utilized by auditors in developing proper tests and procedures c. they are direct evidence that management has prepared financial statements in accordance with GAAS. d. they relate more to the audit while the financial statenent belong to the author.
The CPA's role in performing audits is important to our society because: O an audit of financial statements helps investors and others know that they can rely on the information presented in the financial statements. O auditors have the primary responsibility for the information contained in the financial statements. auditors issue reports on the accuracy of each financial transaction. auditors provide direct financial advice to potential investors.
What is the purpose of an audit? A) To provide investment advice to shareholders B) To ensure that financial statements are accurate and comply with accounting standards C) To manage and control a company's financial resources D) To predict a company's future financial performance
Which of the following is NOT a major component of the Sarbanes-Oxley Act? Executive responsibility for accurate financial reporting. Accounting regulation. Mandating external financial audits for all companies. Formation of an audit committee.
The Board of Directors and Executive Management of Agility Company provide a written undertaking affirming the soundness of financial statements, which represent all the financial and operations aspects of the company, and that they have been prepared in line with International Standards approved by the Authority. Required. (a) Critically examine the link between the Audit Committee and the Corporate Governance in in incorporating the culture of accountability inside the company to ensure the soundness and integrity of financial reporting of the company. (b) What is/are the possible collaboration/s among the Audit Committee, accounting external auditors, and the internal auditing divisions?
3. Does a qualified opinion on management’s assessment of internal controls over the financial reporting system necessitate a qualified opinion on the financial statements? Please explain within 150 words. (To answer this question, please make sure you understand the terms “unqualified opinion” and “qualified opinion” in auditing.
Although audit reports should provide assurance to investors and creditors that financial information presented is free of material misstatements and in accordance with GAAP, should audit reports be used to solicit investments, credit, or sales in a manner similar to Jim Bakker’s? How can a CPA firm prevent such behavior?
Please respond promptly: When auditing a private company, the auditor should obtain an understanding of internal control sufficient to___________. Select one: a. Provide a method for safeguarding assets, checking the accuracy and reliability of accounting data, promoting operational efficiency, and encouraging adherence to prescribed managerial policies. b. Provide reasonable protection against client fraud and defalcations by client employees. c. Assess control risk. d. Provide a basis for suggestions to the client for improving the accounting system.
S1: After conducting an audit and release of the audit report, the primary responsibility on the fairness of the financial statements remains with the management and those charged with governance of the entity. S2: In recurring audits, the auditor may not send a new engagement letter unless warranted by the circumstances. S3: For financial reporting purposes, an entity's risk assessment process includes its identification, analysis, and management of risks relevant to the preparation of financial statements in accordance with applicable financial reporting framework. S4: The risk of material misstatement is broader in scope compared to business risks. S5: Analytical procedures used as substantive test focuses on detecting material misstatements. S6: The responsible party always prepare a representation that will be subjected to the validation of the practitioner. Identify which statements are correct
Which of the following statements are True? a) The financial statements are management's responsibility. b) Management is responsible for adopting sound accounting policies and establishing and maintaining internal control c) The fair presentation of financial statements in conformity with applicable financial reporting framework is an explicit and integral part of management's responsibility. Only b) and c) Only a) Only a) and b) All a) , b) and c)