Audit responsibilities & objectives

 The auditor role ( objective ) :-

Express an opinion about the fairness of F.St by obtaining a
reasonable assurance that F.St are free of material misstatement
according to standards.
 Note:-
Professional skepticism: I should think in what the
Mgt. give me.

 Reasonable assurance :-
 The auditor can't examine the whole population.
 So, he takes a sample.
 So, his opinion based on sample.
 So, there is some errors.

 Material misstatements :-
Material: significant misstatement that may affect
the F.St users decisions.

Misstatement :
Error: unintentional misstatement.
Fraud: intentional misstatement.
 Illegal act: violation of laws or governmental
regulations.

 To perform the previous responsibilities the auditor

should :-

1) Divide F.St into cycles .

2) Know the mgt. assertions about f.st.
3) Know the general audit objectives.
4) Know specific audit objectives.
 how dividing F.St into cycles ???
a) Financing from debt and equity.
b) Cash used to purchase raw materials , assets ….etc.
c) Goods are in warehouse as inventory.
d) Selling inventory ( sales)
e) Obtain cash after sale.
f) Use cash in :-
 Repay loans. Acquire new assets Pay salaries.