According to SA 200 Overall objective of Independent Auditor and the conduct of an audit in accordance with standards on auditing. Overall objective of Auditor, 1.To give opinion on financial statement. Opinion should be true and fair. 2. To check whether financial statements are prepared as per financial reporting frame work. 3. Obtain reasonable assurance about whether financial statements are fre from material misstatements arising due of fraud and error. 4.To report on the financial statements and communicate as required by the ISAs in accordance with the auditors findings.
**OVERALL OBJECTIVES OF AN AUDITOR** • identify and assess risks of material misstatement, whether due to fraud or error, based on an understanding of the entity and its environment, including the entity's internal control. • obtain sufficient appropriate audit evidence about whether material misstatements exist, through designing and implementing appropriate responses to the assessed risks. • form an opinion on the financial statements, or determine that an opinion cannot be formed, based on an evaluation of the audit evidence obtained Thanks
Hie **Overall Objectives of the Auditor** 1. In conducting an audit of financial statements, the overall objectives of the auditor are: (a) To obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, thereby enabling the auditor to express an opinion on whether the financial statements are prepared, in all material respects, in accordance with an applicable financial reporting framework; and (b) To report on the financial statements, and communicate as required by the ISAs, in accordance with the auditor’s findings. 2. In all cases when reasonable assurance cannot be obtained and a qualified opinion in the auditor’s report is insufficient in the circumstances for purposes of reporting to the intended users of the financial statements, the ISAs require that the auditor disclaim an opinion or withdraw (or resign) from the engagement, where withdrawal is possible under applicable law or regulation.
Auditing is an independent examination of financial statements in order to give opinion on such financial statements. Objective of auditor includes: 1. To give opinion on such financial statements. Opinion can be modified or unmodified opinion. 2. To see whether the financial statements are prepared as per financial reporting framework. Financial reporting framework means format of balance sheet and profit and loss account along with compliance of accounting standards and accounting policies. 3. To check whether the financial statements are free from material misstatements arising due to fraud or error.
SA 200 – Overall objective of the Independent Audit and the conduct of an audit in accordance with Standard on Auditing ------------------------------------------------------------------------ **Objective of the standard** --Overall objective of independent auditor --Establishes Independent auditors overall responsibilities **Overall objective of Auditor** --Obtain reasonable assurance about whether financial statements are free from material misstatement --Report on financial statements in accordance with auditors findings **Responsibilities of Management** --Preparation of the financial statements. --Maintenance of adequate accounting records --Maintenance of adequate internal controls --Selection and application of accounting policies --Safeguarding of assets of the enterprise --Provide Auditor with all information, unrestricted access --Audit of financial statement does not relieve management of its responsibilities. **Auditor** --Independent examination of records. --Expressing an opinion on financial statement **Requirement** Ethical Requirements Professional Skepticism Professional Judgment Sufficient Appropriate Audit Evidence and Audit Risk Conduct of an Audit in Accordance with SAs ---Complying with SAs relevant to the Audit ---Shall use the objectives stated in SA in planning and performing the audit ---Comply with relevant requirements of SA **Ethical Requirement** 1. Integrity 2. Objectivity 3. Due care 4. Confidentiality 5. Professional behavior **Professional Skepticism** Being alert to --For audit evidence that contradicts other --For reliability of documents and responses to inquiries --For possible fraud --For circumstances that need additional audit procedures Maintenance skepticism throughout the audit Not expected to disregard past experience of the honesty and integrity of entity’s management **Professional Judgment** 1. Materiality and Audit Risk 2. Nature timing and extent of audit procedure 3. Evaluating whether sufficient appropriate audit evidence has been obtained, or more needs to be done to achieve. 4. Drawing of conclusions based on the audit evidence obtained. 5. Need to be exercised throughout the audit. **Sufficient Appropriate Audit Evidence and Audit Risk** Audit is matter of professional judgment rather than a matter of capable of precise measurement Risk exist at two levels --The overall financial statement level – Material Misstatement --The assertion level for class of transaction, account balance and disclosure. -----Inherent Risk -----Control Risk -----Detection Risk Conduct of an Audit in Accordance with SAs Auditor Shall Comply with all SA relevant to the Audit Have understanding of the entire text of an SA – application guidance / explanatory material / more specific requirement / explain procedure Achieve overall objective as well as objectives stated in Individual SAs Comply with relevant requirements --Explicit Requirement – Modify the auditors opinion if scope limitation SA 705 --Implicit requirement Not represent compliance with SA in auditors report unless the auditor has complied with the requirements Failure to Achieve an objective The auditor shall evaluate whether this prevents the auditor from achieving the overall objectives of the auditor, if yes --modify the auditors opinion --or withdraw from the engagement