[toc-this] Show
DefinitionsReliabilityReliability requires that the accounts be free from [link title="material" link="%2Faware%2FGAP%2FPages%2FCA-FA%2FPlanning%2FMateriality.aspx" /] misstatement and bias, and that they can be depended upon by users to represent faithfully that which they claim to represent or could reasonably be expected to represent. Faithful representation requires that transactions and other events are:
The financial statements for a given year must completely and accurately report the cash flows and financial results for that particular year; the assets and liabilities at year-end must be properly recorded in order faithfully to reflect the financial position; and the notes to the accounts must disclose all relevant information. AssertionsAssertions are representations made by auditee management that are embodied in financial statements and transactions. They may be explicit (e.g. where auditee management states that the accounts are prepared based on [link new-window title="International%20Public%20Sector%20Accounting%20Standards%20(IPSASs)" link="https%3A%2F%2Fwww.ipsasb.org%2F" icon="external-link" /] or implicit (e.g. where auditee management implies that transactions for which payments have been made are eligible according to the relevant rules). The auditor uses assertions to consider the different types of potential misstatements that may occur. These assertions are the specific audit objectives about which the auditor wishes to reach a conclusion.InstructionsObjectives of reliability auditsThe overall audit objective for reliability is to establish whether the consolidated annual accounts present fairly, in all material respects, the financial position and the results of operations and cash flows in accordance with the [link title="applicable%20financial%20reporting%20framework" link="%2Faware%2FFA%2FPages%2FConcepts%2FFinancial-reporting-framework.aspx" /] .Audit assertions for reliabilityAssertions about classes of transactions and events for the period under audit
Assertions about account balances at period end
Assertions about presentation and disclosure
Audit of consolidated annual accountsThe following specific elements of the consolidated annual accounts should be audited: Balance sheetThe audit procedures for the Balance Sheet should allow for the verification of the following financial statement items and assertions (examples):
Statement of financial performanceThe audit procedures for the Statement of financial performance are designed to check that the income and expenses occurred, are accurate, complete and correctly recorded in the proper year, and are properly presented and disclosed. Cashflow statementThe audit procedures for the Statement of Cash Flows are designed to determine whether the Statement correctly discloses the cash movements (contributions, income, expenses disbursed and cash position) for the year. Notes to the accountsAudit procedures for the Notes to the financial statements are designed to verify the presentation and disclosure assertions, i.e. that each significant section of the financial statements is duly commented on in the Notes, including off-balance sheet items such as guarantees. Statement of changes in net assetsThe audit procedures regarding the Statement of Changes in Net Assets aim to ensure that changes in net assets are correctly recorded and reported. Reports on budgetary implementationAudit procedures for the reports on budgetary implementation should address the following:
[/toc-this] Which of the following accounts should be reviewed by the auditors to gain reasonable assurance that additions to property, plant, and equipment are not understated?Which of the following accounts should be reviewed by the auditor to gain reasonable assurance that additions to property, plant, and equipment are not understated? Repairs and maintenance. Equipment considered idle on a permanent basis should not be classified as plant and equipment.
Which of the following audit procedures would be least likely to lead the auditor to find an unrecorded fixed asset disposal?excessive recurring losses on assets retired. Which of the following audit procedures would be least likely to lead the auditor to find unrecorded fixed asset disposals? Review of repairs and maintenance expense.
Which of the following is most likely to be an audit objective in the audit of owners equity?Which of the following is most likely to be an audit objective in the audit of owners' equity? Establish that recorded owners' equity includes all long-term debt and equity balances.
Which of the following procedures would least likely lead the auditor to detect unrecorded?Which of the following audit procedures would be least likely to lead the auditors to find unrecorded fixed asset disposals? Review of repairs and maintenance expense.
|