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Audit Lecture Notes

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Waseim khan Barik zai
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19 views7 pages

Audit Lecture Notes

Uploaded by

Waseim khan Barik zai
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Lecture 5 27th July 2023

In following cases different opinion can be given:

Different Frameworks

In same report unmodified & adverse opinion can be given under two different frame works

As A Whole

- Disclaimer/Qualified opinion relating to cashflows & operations.

- Unmodified opinion relating to financial position can be expressed.

- Example 2 of ISA 510.

Further discussion of the above topic in ISA 805

Para 15, 16A of ISA 705.

Types of Exams Question

- Drafting.

- Deficiencies in report containing modification.

- Impact on opinion.

- Course of action plus impact on opinion.

Practice Book

Q 18, Q 19, Q 20, Q 21.

Q 17, 22, 23 Homework

Do Not attempt 20

Lecture 6 July 31st, 2023

ISA 706:

In this ISA, objective is to draw user's attention.

When auditor has to draw users attention, the auditor uses two paras:
> Emphasis of Matter Para (For matters disclosed in financial statement)

> Other Matters Para (For matters not disclosed in FS)

Emphasis of Matter Para:


> For matters which are disclosed in FS.

> Fundamental for user's understanding.

> Do not require modification of opinion

> Not determined as Key Audit Matter.

Presentation of EOM Para in Report:

> As a separate section in report.

> Refer relevant disclosure.

> Indicate that opinion is not modified in respect of matter described in EOM.

EOM is not a substitute:

> for a disclosure for which management is responsible.

> Material Uncertainity

> Modified Opinion.

Circumstances of EOM Para:


Prescribed by ISA 706:

> Where AFRF is not acceptable but prescribed by law.

> FS are prepared under special purpose framework.

> Uncertain outcome of exceptional litigations.

> Early application of new reporting standards.

> Major Catastrophs.

These are some of the few circumstances however avoid wide spread use of EOM Para.

Furhter PDF is also given for all the circumstances.

Placement of EOM:

If due to AFRF, then after Basis for opinion para.


if KAM is also given, then before or after KAM para based on your judgement.

Other Matters Para:


About matters other than those disclosed in FS.

It is given for the understanding of matters such as:

Unable to withdraw in case of pervasive scope limitation due to law.

Explanation of planing & scope of audit.

further explanation of auditors responsibilities.

Reporting on more than one set of fS of single client under different frameworks.

Restriction on distribution of auditors report.

Prior year FS audited by another auditor.

Other ISA's which guide on it include ISA 560, 710

Other Considerations:

Separate section

Not prohibited by law

Not determined as KAM

No modification is required regarding this matter

Not required as disclosure

Placement of other matter para:

> If presented with KAM, add further context to other matter para in its heading.

> If it is related to other reporting responsibilities, may be included in other legal & regulato

> If it is related to auditor responsiblities, maybe included as part c of report (after the secti

Interaction between key audit matters & EOM/OM

KAM

Matter will be KAM only if criteria is appliable on the matter.

KAM can also be on external matters. It is not necessary that it will be on disclosed matte
EOM/OM:

It depends on the situation of matter.

Types of Exams Question:

> Scenario based

> Impact on Report

> With other ISAs (560, 710)

> Drafting or identify deficiencies


frame works
Prescribed by Other ISA's:

ISA 560, 710, 210, 800


frameworks.

its heading.

other legal & regulatory reuirement section.

report (after the section other legal & regulatory requirements.

be on disclosed matters.

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