External audit
In most developed countries, all publicly quoted companies and all large companies are required by law to produce annual financial statements and have them audited by an external auditor. The majority of the things is designed around this process. Other small organisations may choose to be audited even if there is no legal requirement.
In most developed countries, all publicly quoted companies and all large companies are required by law to produce annual financial statements and have them audited by an external auditor. The majority of the things is designed around this process. Other small organisations may choose to be audited even if there is no legal requirement.
Objective of an external audit
The objective of an external audit engagement is to enable the auditor to express an opinion on whether the financial statements.The financial reporting framework to be applied will vary from country to
country.
• give a true and fair view (or present fairly in all material respects)
• are prepared, in all material respects, in accordance with an applicable financial reporting framework.
The auditor should follow certain general principles in the conduct of an external audit.
• Compliance with applicable ethical principles
• Compliance with applicable auditing standards
• Planning and performing the audit with an attitude of professional skepticism that recognises that the financial statements being audited may be materially misstated. For example, the auditor should not simply accept an explanation about a matter given by management. The auditor should seek further evidence about the matter that confirms or contradicts management’s explanation.