STANDARDS REGULATING THE RESPONSIBILITY OF AUDITORS
After studying the chapter, you will:
• a system of international audit standards that govern the responsibility of auditors;
• the order of generalization and use of audit results;
• techniques and ways to identify violations and illegal activities in the conduct of business and accounting;
• The rights, duties and responsibilities of economic entities and audit firms in the implementation of external audit;
be able to
• compare international and national approaches to audit and justify the expediency of their application;
• plan, organize and conduct audits based on international audit standards;
• Develop audit programs based on international audit standards;
• summarize the results of audits and draw up an audit report based on international audit standards;
• the conceptual apparatus MCA 200-265;
• methodology, methodology and fundamentals of the audit organization;
• methods for planning, programming, and conducting audit procedures based on International Standards on Auditing;
• the basics of developing and using audit programs based on international audit standards;
• ways of summarizing the results of audits and drawing up an audit report;
• skills in the practical implementation of internal control tasks;
• methods of using the results of the audit in managing the effectiveness of entrepreneurial activity of the economic entity
• the skills of conducting audits based on international audit standards in the context of computerized accounting.
Basic concepts: The principles of audit, MCA 200, "The purpose and general principles of auditing financial statements", letter of engagement, MCA 210 " auditor's working papers, MCA 230 Documentation & quot ;, management responsibility, MCA 240 Fraud and errors & quot ;, MCA 250 Accounting for laws and regulations in auditing financial statements & quot ;, MCA 260 "MCA 265" Information on shortcomings in the internal control system " persons with managerial authority. "
MCA 200 "Purpose and General Principles for Audit of Financial Statements"
International Standard on Auditing 200 establishes the general duties of an independent auditor when conducting an audit of financial statements in accordance with the MCA. In particular, it establishes the general objectives of the independent auditor and explains the nature and scope of the audit that are necessary to ensure that the independent auditor meets these objectives. The standard also explains the scope, responsibility and structure of the MCA; it includes requirements that establish the overall responsibility of the independent auditor, including the obligation to comply with the requirements of the MCA.
Under General audit objectives established common for all types of audit objectives.
The purpose of the audit is to increase the degree of user confidence in the financial statements. This is achieved by expressing the opinion of the auditor whether the financial statements have been prepared in all material respects in accordance with the applicable principles for its preparation. In the case of most general reporting guidelines, this is the opinion whether the financial statements are reliable in all material respects, or in other words, whether it provides a true and fair presentation in accordance with the principles of preparing financial statements. Conducted in accordance with the MCA and ethical requirements audit allows the auditor to form such an opinion.
The financial statements to be audited are the statements of the organization prepared and presented by its management under the supervision of the representatives of the owner.
Audit of financial statements does not relieve management and representatives of the owner from their responsibility. MCA require the auditor to form an audit opinion to obtain reasonable assurance that the financial statements as a whole do not contain material misstatements caused by an error or dishonest behavior. Reasonable confidence is a high level of confidence. It can be obtained if the auditor receives sufficient appropriate audit evidence to reduce the audit risk (that is, the risk that the auditor expresses an inadequate opinion when the financial statements are significantly distorted) to an acceptable low level. However, reasonable certainty does not constitute absolute certainty, since there are inherent limitations to the audit; such restrictions lead to the fact that the audit evidence, on the basis of which the auditor draws conclusions and bases his opinion, is rather convincing than exhaustive.
The auditor is obliged to apply the concept of materiality in the planning and conduct of the audit, as well as in assessing the impact of identified distortions on the audit and uncorrected distortions, if any, on the financial statements. In general, distortions, including omissions, are considered significant if, taken individually or in combination, they are reasonably expected to affect the economic decisions of users that they make based on financial statements.
The audit opinion is expressed in the financial statements as a whole, and therefore the auditor is not responsible for identifying distortions that are not material for the financial statements as a whole.
When auditing financial statements, the auditor's general objectives are as follows:
• obtain reasonable assurance that the financial statements as a whole do not contain material misstatements caused by error or fraud, which will enable the auditor to express an opinion as to whether the financial statements have been prepared in all material respects in accordance with the applicable principles for the preparation of financial statements ;
• prepare an audit report on the financial statements and provide information on the results obtained by the auditor in accordance with the requirements of the MCA.
In all cases where reasonable assurance can not be obtained, the MCA requires that the auditor refuse to express an opinion or refuse to perform the assignment (contract).
In all cases where reasonable assurance can not be obtained and the modified audit report is not appropriate in the circumstances to provide an opinion to users of financial statements, the MCA requires that the auditor refuse to express an opinion or refuse to perform the assignment (contract), in cases , when the refusal to perform the assignment is allowed by law.
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