- 5 Marks
Question
Auditors go through a checklist of procedures before expressing an opinion on the financial statements.
Required:
Explain the audit procedure in relation to the review of the overall financial statements.
Answer
The audit procedures for reviewing the overall financial statements include:
- Review of accounting policies: Ensure that the entity has used acceptable accounting policies that are consistently applied and correctly interpreted.
- Disclosure and classification review: Verify that items in the financial statements are adequately disclosed and correctly classified.
- Consistency with business understanding: Ensure that the financial statements provide a view consistent with the auditor’s knowledge of the business’s economic circumstances.
- Post-balance sheet events: Review events after the reporting date to determine whether any require adjustment or disclosure in the financial statements.
- Final analytical review: Perform a final analytical review to ensure that the financial statements as a whole make sense and are consistent with expectations.
- Tags: Analytical review, Audit Procedures, Compliance, Financial Statement Review
- Level: Level 2
- Topic: Completion Procedures and Reporting
- Series: MAY 2017
- Uploader: Theophilus