AUDITING AND ASSURANCE GUIDANCE STATEMENT [9]
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关键词:AUDITINGASSURANCE GUIDANCESTATEMENT
l entities the owner-manager’s assessment may be less formal and less frequent, or the owner-manager may not conduct an assessment at all. Also, as noted in paragraphs .12 to .18 of this AGS, limited or more informal accounting and internal control systems may exist. Nevertheless, the auditor still makes the inquiries, as they provide a basis for obtaining an understanding of the actions the owner-manager has taken to prevent and detect fraud and error, and are also important in obtaining an understanding of the owner-manager’s attitude towards fraud and error.
.37 Paragraph .51(a) of AUS 210 requires the auditor to obtain written representation from management that it acknowledges its responsibility for the implementation and operation of accounting and internal control systems that are designed to prevent and detect fraud and error. As noted in paragraph .12 to .18 of this AGS, limited or more informal accounting and internal control systems may exist. As a result, the owner-manager may be of the opinion that it is not possible to provide the required representation. The primary responsibility for the prevention and detection of fraud and error rests with management, irrespective of the size of the entity. It therefore is important to obtain the owner-manager’s acknowledgement of this responsibility. Such acknowledgement could be expanded to cover compensating controls (refer paragraph .16 of this AGS). If the owner-manager refuses to provide the required representation, this constitutes a scope limitation and the auditor expresses an “except for” or an inability to form an opinion.
.38 Paragraph .51(d) of AUS 210 requires the auditor to obtain written representations from management that it has disclosed to the auditor the results of its assessment of the risk that the financial report may be materially misstated as a result of fraud. As noted in paragraph .36 of this AGS, the owner-manager of a small entity may not have conducted such assessment and therefore may be of the opinion that it is not possible to provide the required representation. The auditor requests the owner-manager to reflect in a written representation that such assessment was not conducted, as well as any actions that the owner-manager has taken to prevent or detect fraud and error. If the owner-manager refuses to provide the required representation, this constitutes a scope limitation and the auditor expresses an “except for” or an inability to form an opinion.
AUS 218: Consideration of Laws and Regulations in an Audit of a Financial Report
.39 AUS 218 requires the auditor to obtain a general understanding of the legal and regulatory framework to which the entity is subject. Apart from those laws and regulations that relate directly to the preparation of the financial report, there may also be laws and regulations that provide a legal framework for the conduct of the entity and that are central to the entity’s ability to conduct its business. As most small entities have uncomplicated activities, the legal and regulatory environment to which they are subject is less complicated than the environment in which larger more diversified entities operate.
.40 Once the auditor of a small entity has identified any relevant industry-specific laws and regulations, this information is recorded as permanent information as part of the knowledge of the entity and is reviewed and updated as necessary in subsequent years.
AUS 710: Communicating with Management on
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