Lecture No 1.ppt
- 1. Course Code: Fundamentals of Auditing Course Title: ACC 311
- 2. Auditing An Introduction What is an Audit? Audit is an independent examination of financial statements of an entity that enables an auditor to express an opinion whether the financial statements are prepared (in all material respects) in accordance with an identified and acceptable financial reporting framework.
- 3. True and fair presentation means that the financial statement are prepared and presented in accordance with the requirements of the applicable International Financial Reporting Standards (IFRS) and local pronouncements/legislations.
- 4. Essential Features of an Audit: An auditor involves in examination of financial statements, the auditor is not responsible for the preparation of the financial statements. The end result of an audit is an opinion to assist the user of the financial statements. Auditing therefore relies heavily on professional judgment, not merely on the facts. The auditor’s opinion makes reference to “true and fair” or “fair presentations” but “true and fair” is again a matter of judgment. It is not precisely defined for the auditor.
- 5. Why is there a need for an audit? Contain errors Not disclose fraud Be inadvertently misleading Be deliberately misleading Fail to disclose relevant information Fail to conform to regulations
- 6. What is the distinction between Auditing and Accounting? Accounting Solely responsibility of management Auditing Independent examiner
- 7. Who can be an auditor? For appointment as auditor of: a) a Public Company or b) a Private Company which is a subsidiary of a Public Company. c) a Private Company having paid up capital of three million rupees or more. The person must be a Chartered Accountant within the meaning of the Chartered Accountants Ordinance, 1961. For listed companies an auditor must have a satisfactory QCR (quality control review) rating issued by ICAP.