This document compares and contrasts different types of financial statement audit engagements:
- Audits of complete general purpose and special purpose financial statements. These involve auditing all financial statements prepared under the applicable financial reporting framework.
- Audits of single financial statements and specific elements. These involve auditing individual statements or elements rather than a full set of statements.
- Engagements to report on summary financial statements. These involve reporting on the consistency of summary statements with audited statements but do not include auditing the underlying statements.
The document also discusses how an auditor should express an opinion if not permitted to withdraw from an engagement when independence is impaired, referencing guidance to disclaim an opinion and disclose
This document compares and contrasts different types of financial statement audit engagements:
- Audits of complete general purpose and special purpose financial statements. These involve auditing all financial statements prepared under the applicable financial reporting framework.
- Audits of single financial statements and specific elements. These involve auditing individual statements or elements rather than a full set of statements.
- Engagements to report on summary financial statements. These involve reporting on the consistency of summary statements with audited statements but do not include auditing the underlying statements.
The document also discusses how an auditor should express an opinion if not permitted to withdraw from an engagement when independence is impaired, referencing guidance to disclaim an opinion and disclose
This document compares and contrasts different types of financial statement audit engagements:
- Audits of complete general purpose and special purpose financial statements. These involve auditing all financial statements prepared under the applicable financial reporting framework.
- Audits of single financial statements and specific elements. These involve auditing individual statements or elements rather than a full set of statements.
- Engagements to report on summary financial statements. These involve reporting on the consistency of summary statements with audited statements but do not include auditing the underlying statements.
The document also discusses how an auditor should express an opinion if not permitted to withdraw from an engagement when independence is impaired, referencing guidance to disclaim an opinion and disclose
This document compares and contrasts different types of financial statement audit engagements:
- Audits of complete general purpose and special purpose financial statements. These involve auditing all financial statements prepared under the applicable financial reporting framework.
- Audits of single financial statements and specific elements. These involve auditing individual statements or elements rather than a full set of statements.
- Engagements to report on summary financial statements. These involve reporting on the consistency of summary statements with audited statements but do not include auditing the underlying statements.
The document also discusses how an auditor should express an opinion if not permitted to withdraw from an engagement when independence is impaired, referencing guidance to disclaim an opinion and disclose
References: 1. PSA 800, Special Considerations—Audits of Financial Statements Prepared in Accordance with Special Purpose Frameworks 2. PSA 805, Special Considerations—Audits of Single Financial Statements and Specific Elements, Accounts or Items of a Financial Statement 3. PSA 810, Engagements to Report on Summary Financial Statements
LECTURE NOTES Comparison of Financial Statements-Related Audit Engagements
Audits of A Audits of A Audits of Single Engagements to
Complete Set of Complete Set of Financial Report (Not to General Purpose Special Purpose Statement and Audit) on Financial Financial Specific Summary Statements Statements Elements, Financial Accounts, or Statements Items of a Financial Statement Subject Matter A complete set of A complete set of A single financial Summary of general-purpose special purpose statements or general financial financial specific item of a purpose or statements statements financial special statements that purpose financial may be of general statements purpose or special purpose financial statements Financial General purpose Special purpose General purpose Certain applied Reporting (e.g., PFRSs, (e.g., cash basis, or criteria Framework PFRS for regulatory special purpose used by SMEs) financial reporting management to frameworks, prepare summary contracts) financial statements Auditor’s Whether financial Whether financial Whether financial Whether Opinion statements statements are statements (or the summary present fairly… prepared… specific financial financial information) statements are present consistent with (or fairly… a fair summary of) the audited financial statements …
Emphasis of Only when Required in order (1) General (1) General
Matter in the necessary to alert users of purpose— only purpose— auditor’s specialized nature when necessary only when report of the financial or (2) Special necessary or statements purpose— (2) Special required purpose— required Report Not restricted May be restricted (1) General (1) General Restriction purpose— purpose—not not restricted or restricted or (2) (2) Special Special purpose—may be purpose—may be restricted restricted
Engagement Consider Accept an
Acceptance practicality of engagement to Special accepting the report on Considerations engagement summary when the financial auditor is not also statements only engaged to audit when engaged to the conduct entity’s complete an audit of the set of financial financial statements from statements which the summary financial statements are derived.
Auditor’s Report: Lack of Independence
Under PSA 220, the auditor shall conclude compliance with independence requirements. In doing so, the auditor shall: a. Evaluate circumstances and relationships that create threats to independence; and b. Take appropriate action to eliminate such threats or reduce them to an acceptable level by applying safeguards, or, if considered appropriate, to withdraw from the audit engagement, where withdrawal is permitted by law or regulation.
However, it is not clear under the Philippine and International Standards as to what opinion to express in case the auditor is not permitted to withdraw from the engagement as required by law or regulation. At this point, we refer to AICPA AU-C Section 705, par. 19, which states “when the auditor is not independent but is required by law or regulation to report on the financial statements, the auditor should disclaim an opinion and should specifically state that the auditor is not independent. The auditor is neither required to provide, nor precluded from providing, the reasons for the lack of independence; however, if the auditor chooses to provide the reasons for the lack of independence, the auditor should include all the reasons therefor.” Examples of reasons may include: 1. A member of the engagement team had a direct financial interest in XYZ company. 2. An individual of my immediate family was employed by XYZ company. 3. The auditor performed certain accounting services that impaired the auditor’s independence.
