RSM323H1 Chapter Notes - Chapter 4: Financial Statement, Audit Evidence, Cash Flow Statement
Document Summary
Management"s and governance reponsbility: give notice of management"s (or other preparer"s) responsibility to prepare the financial statements in conformity with a fair presentation reporting framework. Independence is the foundation of the audit function: when independence is lacking, an audit in accordance with gaas is impossible, and the auditors should resign or not accept an audit engagement. Gaap: departure reports: a type of qualified report, a company"s management can decide to present financial statements containing an accounting treatment or disclosure that is not in conformity with gaap. Audit standards are quite clear that if an auditor has a basis for an adverse opinion, the uncomfortable position cannot be relieved by giving a disclaimer of opinion. Only the opinion paragraph is affected: the auditor must have sufficient appropriate evidence to support the conclusion. Gaap requirements: both auditor and client work to avoid a report reservation. Significant matter paragraph: motifications that don"t affect the audit.
