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Lecture

ISA:CAS 700 report summary.docx

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Department
Accounting
Course
ACC 521
Professor
Ken Caplan
Semester
Fall

Description
Auditor’s Report Summary & ITC Main Points An audit report provides external users useful information for decision-making. The current audit report under CAS/ISA 700 gives the auditors opinion after an audit is conducted on a company’s financial statements and accounting policies. The management of the company is responsible for the preparation of these statements in accordance with International Financial Reporting Standards (IFRS). When the audit is conducted, it must be in accordance with the International Standards on Auditing (ISA). This means that it’s the auditor’s responsibility to comply with ethical requirements when planning and performing the audit to make sure the financial position of the company, based on its financial statements, is free from material misstatement (weather error or fraud). When performing the audit, the auditor must make risk assessments in judging information on the financial statement. This includes taking internal control into consideration in the preparation of the financial statements, as well as evaluating the appropriateness of the accounting policies used when making management estimates of accounts. The auditor usually issues a statement like, “We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.” when the audit is concluded. The auditors report then concludes with an opinion towards the reliability and usefulness of the company’s statements. The ITC (Invitation to Comment) will attempt to improve the way audit reports are conducted. Clearly, the call for change initially came from investors and financial analysts who look to auditor’s to help them navigate through increasingly complex financial statements and point out where the auditor’s work was focused on. The IAASB (International Auditing and Assurance Standards Board) has identified a number of improvements to auditor reporting, and is now consulting to better understand what users think about these changes. Some of the issues the ITC hopes to address are:  User understanding of increasingly complex financial reports.  Transparency about key matters related to the audited financial statements and the nature of, work performed in, an ISA audit  Maintenance of the current scope of the ISA  The nee
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