COMMERCE 4AD3 Chapter Notes - Chapter 15-16: Internal Control, Accounts Receivable, Audit Evidence
18 Dec 2017
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Auditors must address some final matters to complete their work. All members of the audit team are involved in the final stage, especially the audit engagement partner (who makes the final decision on the audit opinion) concurrent. They must analyze the income statement to ensure it fairly represents the categories of revenues and expenses and is consistent with the evidence they obtained from auditing all major balance sheet accounts and transactions. If change in net assets are materially correct and changes in se are correct, the only misstatements that can exist in income statement will be due to misclassifying the income elements. Misclassifications affect the fairness of presentations because they can prevent financial statements readers from understanding the composition and trends in the main drivers of the company"s financial performance. Auditor must also look for evidence regarding unrecorded liabilities, additional contingencies, commitments, and subsequent events that should be reflected in the financial statements.
