Aasb 110 Week 5 Audit Report

The purpose of this memo is to document the planning of the financial statement audit

* ASA 200.11 provides the objectives of the auditor in undertaking an audit of a financial report

In accordance with ASC 855-10-25-3, An entity shall not recognize subsequent events that provide evidence about conditions that did not exist at the date of the balance sheet but arose after the balance sheet date but before financial statements are issued or are available to be issued. See paragraph 855-10-55-2 for examples of non-recognized subsequent events.

SAS No. 122 defines subsequent events as: “Events occurring between the date of the financial statements and the date of the auditor's report” (AICPA, 2015). Types of subsequent events include, but are not limited to:

Financial statement are often prepared after a fiscal year specifically once in that trading period.

The financial statements need to meet two qualitative characteristics, namely, relevance and reliability. The statements must be relevant to the decision making process of the users and make an impact on the economic decisions by making comparison with the past, present or future occurrences. For the information to be useful, it must be reliable too. This means the statements should be free from material errors and also contain all the necessary explanations and

1.2 Explain the various business purposes for which the following financial information is required • Income statement ( profit and loss account) • Forecast of cash flow (cashflow statement) • Statement of financial position (balance sheet) (NB explain the statements relevant to your organisation) 1.3 Give an overview of the organisation’s business and its critical external relationships with stakeholders 1.4 Explain how the accounting systems are affected by the organisational structure, systems, procedures, and business transactions. 1.5 Explain the effect on users of changes to accounting systems caused by • External regulations • Organisational policies and procedures

it must determine the appropriate financial statement presentation and disclosure of the results. Sometimes financial statement preparers do not give the same level of attention

The objectives of a review in accordance with the statements on standards for accounting differ significantly with those of audit financial statements in compliance with the general accepted auditing standards. During a review the accountants will perform analytical procedures and will obtain their information from asking the management a variety of questions rather than obtaining an understanding of the internal control structures and obtaining evidential matter throughout inspection, observation or confirmation as an audit process requires. Upon completion of the process the accountants will issue an opinion providing limited assurances on the fair presentation of the financial statements. This limited assurance opinion is different from

Subsequent events are events or transactions that occur after the balance sheet date, but before the financial statements are issued or available to be issued(FASB, 2009). Auditors must evaluate subsequent events at the end of the accounting period and discuss material items with the auditing team. There are two types of subsequent events, recognized and non-recognized(FASB, 2008). Recognized subsequent events are those that provide additional evidence about the conditions that existed on the balance sheet date. This type includes events occurring up to the date of the auditor 's report. In it 's simplest form, recognized subsequent events are changes to assets or liabilities or an alteration to the estimates or summary of the financial information included in the auditors report. In other words, they require adjustments to the financial statements. An example of a recognized subsequent event is if a company resolves a legal case and the amount of liability differs from the expected amount recorded before the balance sheet date. Non-recognized subsequent events are those that provide evidence about conditions that didn 't exist on the balance sheet date, but arose after it. These events do not require adjustments to the financial statements. An example of a non-recognized subsequent event is if a company experiences a fire that destroys inventory. Although these types of events do not require adjusting of financial statements, significant non-recognized

The presentation of financial accounting information is governed by a combination of legal requirements and accounting regulations and conventions. Different types of business entities are governed by different requirements for the preparation of financial statements. Discuss the different elements of financial statement and support

The audit reports of 2014 and 2015 use the ISA 570 where the auditor responsibility has to audit the financial reports about how the management uses the going concern aspect when preparing the financial statements. Therefore, the going concern assumption allows one to view a company as a business that will continue with its operations in the future. Additionally, the management prepares their financial reports using this assumption unless the organization intends to cease its operations or liquidate their assets (Bhattacharyya, pg 20). Therefore, the auditors in both reports show that the organization is going to continue with their transactions shortly because the assets together with the

Many companies understand that in order to attract people fund in their entities and support them in their long- term operation, information of financial report are one of the most vital requirements for achieving this goal. By referring to the IASB Conceptual Framework of financial reporting in 2010,

The accountant’s report(s) should be dated on the same day that the directors authorise the issue of the prospectus \ pre-listing statement\circular\announcement, for formal submission to the ZSE.

are therefore placed in a position to render stewardship accounts are now given the power to hire and fire‘ external auditors who would audit the accounts of their own activities. This runs counter to the ideal principles of public accountability. Therefore it will put the auditor‘s investigative and reporting independence in danger and this may defeat the purpose of public audit and erode the independence and hence, the objectivity of report of the auditors. In this case, independence of the auditor will give impact on the accountability of the public enterprises in Nigeria.