Section 267 and 271 of the Companies Act 2016 respectively require for the private and public companies to appoint an auditor for each financial year. An auditor should ensure that the financial statements of the company are prepared in accordance with the relevant accounting standards. An auditor is guided by the auditing standards in order to obtain reasonable assurance that the financial statements are free from material misstatements. Required: Explain two (2) benefits of a financial statements audit performed by an approved company auditor. i. ii. Explain the tem 'reasonable assurance'. Explain two (2) importance of auditing standards to an auditor in performing the

Section 267 and 271 of the Companies Act 2016 respectively require for the private and public companies to appoint an auditor for each financial year. An auditor should ensure that the financial statements of the company are prepared in accordance with the relevant accounting standards. An auditor is guided by the auditing standards in order to obtain reasonable assurance that the financial statements are free from material misstatements. Required: Explain two (2) benefits of a financial statements audit performed by an approved company auditor. i. ii. Explain the tem 'reasonable assurance'. Explain two (2) importance of auditing standards to an auditor in performing the

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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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.
Which of the following are rights of the auditors? a) The right to all information and explanations (from management) necessary for the proper conduct of the audit. b) The right to receive notice of all meetings of the shareholders (such as the annual general meeting) and to attend those meetings. c) The right to speak at shareholders’ meetings on matters affecting the audit or the auditor. d) The right to visit the branches of the audit firm and right to access all accounting books and records. e) The right to examine and evaluate financial and information systems, recommending controls to ensure system reliability and data integrity f) The right to review data about material assets, net worth, liabilities, capital stock, surplus, income and expenditures Only e) and f) Only d) , e) and f) Only a) , b) and c) Only a) , b) ,c) and d)
Purnama Sdn Bhd involve in event management business and provide services to private and government agency. The company is required to have annual audit under the provision of the Companies Act, 1965. The owner of the company Mr. Hassan has some bookkeeping experience and has personally prepared the company’s financial statements. He does not understand why such statement should be examined by an external auditor. Explain five (5) ways in which an independent audit beneficial to Purnama Sdn Bhd.
14. The auditors' report may be addressed to the company whose financial statements are being examined or to that company's: Select one:a. President.b. Chief financial officerc. Chief operating officerd. Board of Directors.
Assume that you are an auditor of a company. Explain any THREEcategories of assertions that you will be testing when auditing the financialstatements of the company. You are required to:(i.) Mention the name of the company you will be auditing along with the industryto which it belongs to. (ii.) List the category of assertions (3 assertions) along with the element ofa financial statement that will be checked. (iii.) Explain in detail the procedure adopted for collecting the audit evidence thatyou have mentioned in relation to question no. (ii.) with proper justification andtwo sample transactions.
The standard unqualified opinion based on the audit of a public company's financial statements includes a. A discussion of Key Audit Matters if KAMs are discovered. b. A reference to Key Audit Matters if no KAMs are discovered. c. A statement that the CPA firm is registered with the AICPA. d. An indication of how long the firm has served as the company's auditors. e. A Basis for Opinion section preceding the Opinion of Financial Statements section.
Bright Star (Pty) Ltd is considering issuing corporate bonds and must have their financial statements audited as part of the process. You are required to: a) Describe the steps an auditor would take to give Bright Star (Pty) Ltds' prospective investors confidence that the financial statements are without significant inaccuracies. Focus on describing what processes will take place in the following steps: Initial Planning Risk Evaluation Collection of Audit Evidence Conducting Audit Procedures Evidence Assessment Audit Reporting b) Define 'reasonable assurance' in the context of an audit. c) In what ways does an auditor's assessment in Bright Star (Pty) Ltds' situation assist potential investors in reducing their investment risk?
Plz explain in detail
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
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