Search results
Results from the WOW.Com Content Network
SAS 99 defines fraud as an intentional act that results in a material misstatement in financial statements. There are two types of fraud considered: misstatements arising from fraudulent financial reporting (e.g. falsification of accounting records) and misstatements arising from misappropriation of assets (e.g. theft of assets or fraudulent expenditures).
SAS No. 51, Reporting on Financial Statements Prepared for Use in Other Countries; SAS No. 59, The Auditor's Consideration of an Entity's Ability to Continue as a Going Concern , as amended; SAS No. 65, The Auditor's Consideration of the Internal Audit Function in an Audit of Financial Statements ;
Investors, lending institutions, and governments very rarely accept an auditee's financial statements if the auditor issued an adverse opinion, and usually request the auditee to correct the financial statements and obtain another audit report. Generally, an adverse opinion is only given if the financial statements pervasively differ from GAAP. [6]
The auditor must state in the auditor's report whether the financial statements are presented in accordance with generally accepted accounting principles. The auditor must identify in the auditor's report those circumstances in which such principles have not been consistently observed in the current period in relation to the preceding period.
An IT audit is different from a financial statement audit.While a financial audit's purpose is to evaluate whether the financial statements present fairly, in all material respects, an entity's financial position, results of operations, and cash flows in conformity to standard accounting practices, the purposes of an IT audit is to evaluate the system's internal control design and effectiveness.
SAS 70: In April 1992, the AICPA published Reports on the processing of transactions by service organizations; Statement on auditing standards, 070, which provides guidance when auditing the financial statements of an entity that uses a service organization to process transactions that affect financial reporting.
This approach states that the auditor has liability under ordinary negligence if the third party is known to be using the financial statements and there has been some sort of direct communication between the two parties. [12] An example could be the auditor directly giving a report to the bank that will be providing the loan for an actual client.
Financial statements (or financial reports) are formal records of the financial activities and position of a business, person, or other entity. Relevant financial information is presented in a structured manner and in a form which is easy to understand. They typically include four basic financial statements [1] [2] accompanied by a management ...