The auditor’s overall objectives are to:
- Obtain reasonable assurance that the financial statements as a whole are free from material misstatement, whether caused by fraud or error.
- Express an opinion on whether the financial statements are prepared, in all material respects, according to the applicable financial reporting framework.
- Report and communicate as required by the auditing standards. mia.org.my
| Key term | Simple explanation | Example |
|---|---|---|
| Reasonable assurance | A high level of assurance, but not a complete guarantee. | The auditor obtains persuasive evidence but cannot promise that every mistake has been identified. |
| Material misstatement | An error or omission significant enough to influence users’ decisions, considering its size or nature. | Omitting a major loan could mislead a bank assessing the company’s financial position. |
| Audit opinion | The auditor’s conclusion on the financial statements based on the evidence obtained. | The auditor concludes whether the statements give a true and fair view under the applicable framework. |
Example: A company reports a profit of RM200,000 but omits expenses of RM300,000. Correcting the omission would change the reported profit into a loss of RM100,000. This could substantially affect investors’ or lenders’ decisions.
An audit opinion does not guarantee the company’s future survival or the effectiveness of management’s business decisions.
Tiada ulasan:
Catat Ulasan