ACCA F8 Audit & Assurance (International)
F8 tests student's knowledge of auditing and assurance theory and the possibility to apply this knowledge to scenarios in their auditing careers. F8 focuses on assurance engagements and its application within the professional regulatory framework
F8 tests student's knowledge of auditing and assurance theory and the possibility to apply this knowledge to scenarios in their auditing careers. F8 focuses on assurance engagements and its application within the professional regulatory framework
Set of flashcards Details
| Flashcards | 16 |
|---|---|
| Language | English |
| Category | Finance |
| Level | Other |
| Created / Updated | 06.04.2014 / 03.07.2017 |
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What is an External Audit
This is a form of assurance engagement performed by an auditor in order to provide an independent opinion about a set of financial statements
What is the Objective of an External Audit
To enable the auditor to express an opinion on whether the financial statements are prepared;
- in all material respects
- in accordance with an applicable financial reporting framework.
What is the PURPOSE of an External Audit
To enable the auditors to give an opinion on financial statements
What is the Objective of an audit?
Solely to report to the shareholders
What is the function of an audit?
provides assurance to the shareholders and other stakeholders of a company on the financial statements because it is independent and impartial
What can an Auditor provide as an assurance in an independent audit review to its shareholders?
Who are the stakeholders of a company interested in the assurance from auditors that the accounts they are reading have been subkected to an independent report?
What is Accountability? Who is accountable to who?
Accountability is the quality or state of being accountable, that is, being required or expected to justify actions and decisions.
Its suggests an obligation or willingness to accept responsibiloty for one's actions.
Directors (Management) are accountable to shareholders.
What is Stewardship?
refers to the duties and obligations of a person who manages another person's property.
Who are Agents?
These are people (Directors: Management) employed or used to provide a particular service by managing the business. They also maximise their personal wealth in their own right.
WHAT ARE THE DIRECTORS ACCOUNTABLE FOR?
They are accountable for the shareholder's investment. The shareholders have bought shares in the company. They expect a return from their investment. As the directors manage the company, they are in a position to affect that return.
What is an Assurance Engagement
An assurance engagement is one in whcih a practitioner expresses a conclusion designed to enhance the dgree of confidence of the intended users other than the responsible party about the outcome of the evaluation or measurement of the subkect matter against criteria.
The outcome of the evaluation or measurement of a subject matter is the information that results from applying the criteria to the subject matter.
What are the objectives of an Assurance Engagement
Depends on the level of assurance given; There are two types;
- reasonable assurance engagement ( High but not absolute level of assurance given)
- Limited assurance ( low level of assurance
According to the ISAE 3000 Assurance engagements other than audits or reviews of historical financial information, what is the objective of a Reasonable Assurance Engagement?
It is a reduction in assurance engagement risk to an acceptably low level in the circumstances of the engagement as the basis for a positive form of expression of the practitioner's conclusion
In order to give a reasonable assurance, a significant amount of testing and evaluation is required to support the positive conclusion, such as the opinion given in the auditor's report on the financial statements.
What is a Limited assurance and its objective?
It is a lower level of assurance. It allows for a lesser amount of testing and evaluation and results in a negative conclusion
Objective is the reduction in assurance engagement risk to a level that is acceptable in the circumstances of the engagement, but where that risk is greater than for a reasonable assurance engagement, as the basis for a negative form of expression of the practitioner's conclusion
What the 5 elements of an assurance engagement?
