REPORTING
An important point to emphasise at the outset is that candidates are strongly advised not to use the ‘scattergun’ approach when it comes to deciding on the audit opinion to be expressed within the auditor’s report. The scattergun approach is when a candidate will say that the auditor may express more than one opinion depending on a varying degree of situations. For example, where candidates write ‘a(chǎn)n unmodified opinion should be expressed, but the auditor may include an emphasis of matter paragraph if X is disclosed, or the opinion could be qualified “except for” if Y has happened or maybe an adverse or disclaimer should be expressed if Z occurs’. This is not going to earn many (if any) marks because Paper F8 candidates are expected to be able to come to a conclusion as to the auditor’s opinion, depending on the circumstances presented in the question.
There are three situations that ISA 570 identifies in terms of the going concern assumption:
? use of the going concern assumption is appropriate but a material uncertainty exists
? use of the going concern assumption is inappropriate
? management unwilling to make or extend its assessment.
RELEVANT TO ACCA QUALIFICATION PAPERS F8 AND P7
? 2011 ACCA
Clarity auditing standards
To enhance the application of auditing standards in exam questions,
candidates must familiarise themselves with the clarity auditing standards.
The International Auditing and Assurance Standards Board (IAASB) has
completed its comprehensive project to enhance the clarity of all of its
International Standards on Auditing (ISAs) in 2009 for improving
understandability of auditing standards, and all the new clarity auditing
standards are now examinable. This also affects the Hong Kong Standards on
Auditing (HKSAs).
The full set of clarity auditing standards features 39 documents, which include:
? a new International/Hong Kong Standard on Auditing on communicating
deficiencies in internal control – ISA/HKSA 265 (Clarified), Communicating
Deficiencies in Internal Control to those Charged with Governance and
Management
? 35 clarity ISAs/HKSAs
? a clarified international/Hong Kong standard on quality control – ISQC 1/
HKSQC 1, Quality Controls for Firms that Perform Audits and Reviews of
Financial Statements, and Other Assurance and Related Services Engagements
? a revised glossary of terms
? a revised preface to the International/Hong Kong Standards on Quality
Control, Auditing, Review, Other Assurance and Related Services.
ISA/HKSA 265 (Clarified), Communicating Deficiencies in Internal
Control to those Charged with Governance and Management
Among the clarified auditing standards, ISA/HKSA 265 (Clarified) is a
completely new standard.
It deals with the auditor’s responsibility to communicate appropriately to those
charged with governance and management deficiencies in internal control that
the auditor has identified in an audit of financial statements.
When auditors plan for an audit, they are required to perform risk assessment
through understanding internal controls, and also test for the appropriateness
of design of internal controls and whether they are implemented. When control
reliance strategy is adopted, auditors are required to perform tests of controls
to gather audit evidence on the operating effectiveness of controls.
During both processes, auditors might identify deficiencies in internal controls.
In accordance with ISA/HKSA 265 (Clarified), ‘deficiency’ exists when ‘a(chǎn)
control is designed, implemented or operated in such a way that it is unable to
prevent, or detect and correct, misstatements in financial statements on a
timely basis; or a control necessary to prevent, or detect and correct
misstatements in the financial statements on a timely basis is missing’. It is
，我們將會(huì)及時(shí)處理。