What is the difference between Emphasis of Matter paragraph and Other Matter paragraph?
Auditor is required to express his opinion in the form of a written report called auditor’s report. Although auditor’s responsibility and also the purpose of auditor’s report is to convey primarily the auditor’s opinion on financial statements but if auditor believes that there is a matter that must be brought to attention of user of […]
What is Expectation gap in auditing?
Auditing expectation gap or simply expectation gap is the term used to signify the difference in expectations of users of financial statements and auditor’s expectation concerning audited financial statements. Although its about expectations but still its scope and meanings have been defined in number of ways. Difference in expectation can arise on the performance i.e. […]
Why auditor may be unable to obtain sufficient appropriate audit evidence?
Auditor is required to obtain sufficient appropriate audit evidence as it helps auditor reduce audit risk to appropriate level which leads to positive expression of auditor’s opinion in auditor’s report. Although auditor puts every effort in obtaining sufficient appropriate audit evidence, however, this is not always the case and under specific circumstances he may not […]
When Auditor expresses a Qualified opinion?
A qualified opinion is one of the three types of modified opinion that auditor expresses in circumstances where unmodified opinion is not appropriate in auditor’s judgment. Qualified opinion is also known as “except for” opinion. As the name suggests it is a conditional opinion on the financial statements being audited and implies that except for […]
What is Audit around the computer?
Audit around the computer means that processing done by the computer system needs not to be audited as auditor expects that sufficient appropriate audit evidence can be obtained by reconciling inputs with outputs. In simple words evidence is drawn and conclusions are reached without considering how inputs are being processed to provide outputs. Sometimes it […]
What is meant by CAATs?
CAATs short for Computer Assisted Auditing Techniques simply means that assistance of computers is taken by the auditor while carrying out audit engagement. Some students misinterpret the term as if computers will carry out audit engagement as a virtual assistant to the auditor which is not the case as yet. Explanation As we have witnessed […]
What is age, aged, ageing or aging analysis?
Age analysis is simply a time-based analysis with reference to due date to determine either how much time is left until due date or how much time has passed since due date. Most of the time age or aged or ageing analysis refers to the second type of analysis i.e. how much time has passed […]
What is the difference between Audit engagement and Assurance engagement?
In few words, all audit engagements are assurance engagements but not all assurance engagements are audit engagements. Audit engagement is one type of assurance engagement that provides reasonable assurance. Assurance engagements can be reasonable assurance engagements, limited assurance engagements or other assurance engagements. Other assurance engagements are such assurance engagements that are other than audit […]
What is the difference between a Fair presentation framework and a Compliance framework?
Financial statements are prepared to fulfill information needs of its users. In order to cater the needs at best a certain financial reporting framework is used considering the jurisdiction in which the entity and/or its users exist. For example two of the popular financial reporting framework are IFRSs and US GAAPs. However, talking about the […]
What is meant by deviation from controls?
Simply put; an instance or activity that did not occur as per expectations is considered as deviation. For an activity it is not necessary that it must occur as per expectations but also non-occurrence can be considered as deviation. In short, any thing that given rise to conflict between expectation and what actually happened is […]
