Skip to content

ACCA Strategic Professional · Advanced Audit and Assurance (International) · Auditor's reports

Auditor Tomas is drafting the report on Alder Ltd, an unlisted entity, with no modifications. Which of the following must be included in the auditor's responsibilities for the audit of the financial statements section under ISA 700 (Revised)?

The section must state that the auditor exercises professional judgement and maintains professional scepticism, and communicates with those charged with governance about scope, timing and significant findings. It gives reasonable, not absolute, assurance. Preparing the financial statements is management's responsibility, not the auditor's.

  1. AA statement that the auditor exercises professional judgement and maintains professional scepticism throughout the audit, and that the auditor communicates with those charged with governance regarding planned scope, timing and significant findingsCorrect
  2. BA guarantee that the financial statements are free from fraud and error
  3. CA statement that the auditor is responsible for preparing the financial statements and assessing going concern
  4. DAn assurance that all internal control deficiencies have been detected and corrected

Explanation

ISA 700 (Revised) requires the auditor's responsibilities section to state that reasonable assurance is not a guarantee, that professional judgement and scepticism are exercised, and that communication is made with those charged with governance. Preparing the financial statements and assessing going concern is management's responsibility. No assurance on detecting all control deficiencies is given.

Did you get it right without looking?

One question tells you little. A timed set on Auditor's reports shows your real accuracy, how long you take and where you lose marks.

Practise Auditor's reportsFree diagnostic mock

More Auditor's reports questions