Example of Key Audit Matters in an audit report


 

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Why do auditors use assertions?

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  Assertions are representations by management that are embodied in the financial statements and used by the auditor to consider the different types of potential misstatements that may occur. Assertions may fall into the following categories: Assertions about classes of transactions and events, and related disclosures, for the period under audit : ·         Occurrence —transactions and events that have been recorded or disclosed have occurred, and such transactions and events are related to the company. ·         Completeness —all transactions and events that should have been recorded have been recorded, and all related disclosures that should have been included in the financial statements have been included.   ·         Accuracy —amounts and other data relating to recorded transactions and events have been recorded appropriately, and related disclosures have been appropriately measured and described. ·         Cutoff— transactions and events have been recorded in the correct a
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Audit report

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  Audit report is a document  obtained as a result of  an audit of financial statements and attached to the financial statements. This report is needed to convey the opinion expressed by the auditors to the shareholders (or other parties as required by the engagement) on whether the financial statements are prepared, in all material respects, in accordance with an applicable financial reporting framework.  Matters to be considered when forming the audit opinion on the financial statements To form an opinion on whether the financial statements are prepared, in all material respects, in accordance with the applicable financial reporting fram ework the auditor shall consider the following matters: ·        Whether sufficient appropriate audit evidence has been obtained. ·        Whether uncorrected misstatements are material, individually or in aggregate. ·       The qualitative aspects of the entity’s accounting practice, including indicators of possible bias in management’s judgments.
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