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The document outlines various International Standards on Auditing (ISAs) and International Accounting Standards (IAS) relevant to audit engagements, including the auditor's responsibilities and reporting requirements. It discusses the implications of going concern assessments, management overrides, and the types of audit opinions that may be issued based on the presence of material misstatements. Additionally, it defines Public Interest Entities and highlights the importance of adequate disclosures and the auditor's duty to assess risks during the audit process.

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3 views

Document (1)

The document outlines various International Standards on Auditing (ISAs) and International Accounting Standards (IAS) relevant to audit engagements, including the auditor's responsibilities and reporting requirements. It discusses the implications of going concern assessments, management overrides, and the types of audit opinions that may be issued based on the presence of material misstatements. Additionally, it defines Public Interest Entities and highlights the importance of adequate disclosures and the auditor's duty to assess risks during the audit process.

Uploaded by

cheemistry2148
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as ODT, PDF, TXT or read online on Scribd
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engagement letter under ISA 210

ISA 560: Subsequent Events

IAS 2 Inventories

ISA-701 : For Key Audit Matters ISA-705: For modifications to auditor’s opinions ISA-570: Enhanced
reporting for going concern ISA-720: for other information.

The auditor’s report as per ISA-700 (revised)

Opinion • Basis for opinion • Material uncertainty related to going concern (if any) • Emphasis of matter
(if applicable) • Key Audit Matters • Other matters (if any) • Other information (if applicable) •
Responsibilities of management and those charged with governance for the financial statements •
Auditor’s responsibilities for the audit of financial statements

Report on other legal and regulatory requirements

The name of the engagement partner

sign adress date

The decrease in value of inventory took place after the end of the reporting period but before the
financial statements and the audit report were signed. The auditor has an active duty to design and
perform audit procedures to obtain sufficient and appropriate evidence of all events up to date of the
auditor’s report that require adjustment or disclosure in the financial statements are: • Identified • Are
suitably reported in the financial statements s

Going concern basis of accounting is appropriate but material uncertainty exists: • An unmodified
opinion is issued when adequate disclosure is made in the financial statements. The auditors’ report
includes a separate section-‘ “Material Uncertainty Related to Going Concern” when adequate disclosure
is made. No emphasis of matter, unless required by law or national regulation/standards. • Qualified or
Adverse opinion if adequate disclosure is not made in the financial statements or in cases when
management is unwilling t extend its assessment when requested to do so by thes auditor. • Disclaimer
of opinion is considered in rare situations involving multiple uncertainties that are significant to the
financial statements as a whole
Adverse opinion if management’s use of the going concern basis of accounting in the preparation of the
financial statements is inappropriate. In these circumstances, another basis (liquidation /break up basis)
is deemed appropriate and it us irrelevant if appropriate disclosures are made regarding the
inappropriateness of management’s use of the going concern basis of accounting ss
Sales Revenues IFRS 15

ISA 10 agreeing the terms of audit engagements states that auditor should only accept a new audit
engagement when it has been confirmed that the preconditions for an audit are present s

Auditors need to assess the risk of management override during the planning stage of the audit, and to
design appropriate audit procedures in response. The procedures should include: • Testing journal
entries to ensure they are appropriate • Review of accounting estimates to judge whether management
bias has been applied • Scrutinizing significant and unusual transactions While testing journal entries
underlying above indicators, we may pay special attention to the journals • processed for round
amounts, • made close to the year-end • processed by persons who usually do not deal with journal
entries • posted at unusual hours • posted to unusual accounts etc

Substantive procedure

Governance

material mistatements

supervision

business risk

financial statement risk

management override

adequate disclosures

financial reporting framework

The circular so indicated in the question defines the Public Interest Entity (PIE) as under:

(i) The entity that had last annual revenue to the extent of Tk.5 crore

To fulfill few other sub-sections, the same circular also covers other determinants as under:

(i) The total asset of the entity is amounting to Tk.3 crore

(ii) The total liabilities less owners’ equity amount to Tk.1 crore.
Adverse opinion- material and pervasive[p

The auditor shall modify the opinion when: 1. The auditor concludes that the financial statements as a
whole are not free from material misstatement

The resulting misstatements are material, but not pervasive, to the financial statements- this will result
in a qualified opinion typically using the wording (‘except for’). (ii) The resulting misstatements are both
material and pervasive to the financial statements such that the auditor concludes that the accounts do
not give true and fair view- would result in an ‘adverse opinion’.

The auditor is unable to obtain sufficient appropriate audit evidence to conclude that the financial
statements as a whole are free from material misstatement eg limitation on the scope of the audit

___serious that the auditor is unable to form an opinion on the financial statements- would result in a
‘disclaimer opinion’ s

The auditor should add an ‘emphasis of matter’ to the auditor’s report where the auditor considers it
necessary to draw users’ attention to a matter or matters presented or disclosed in the financial
statements that are of such importance that they are fundamental to users’ understanding of the
financial statements. While preferring such an option the audit report, it would be important on the part
of the auditor to indicate in his report that this paragraph does not carry any sense of squalification. In
essence a report carrying an emphasis of paragraph should not be read as qualified opinion.

Inherent risk is increased by exposure to exchange fluctuations.

Inherent risk may be increased by the inexperience of the software company.

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