Financial audit engagement - Scopes and responsibilities

Author:PhD. Florentin CALOIAN



Keywords:responsibility, errors, frauds, information flows, objectives, criteria

Scope of the accounting financial audit\r\n\r\nThe financial audit is directed mainly to auditing the financial statements this meaning expressing and opinion on how much they present a true and fair view in all the material respects of the financial position, performance and development of the financial position i accordance with the accounting framework for the accounting system of the audited entity. \r\n\r\nAuditor’s responsibility and management’s responsibility for the accounting financial audit\r\n\r\nAuditor’s responsibility for his/her engagement refers to planning and audit development so to obtain a reasonable assurance for the material misstatements in the financial statements no matter if this is about fraud or errors. From here results that the auditor does not bear the responsibility for some immaterial misstatements, no matter if they are the result of errors or frauds. In order to accomplish this task successfully the auditor must consider a series of issues that determine the conclusions and of evidences gathered in order to prepare the audit report. \r\n\r\nInformational flows presented in the financial statements \r\n\r\nFinancial statements are audited in an audit engagement realized by organizing this activity in smaller segments distributed to the engagement team members. The most used method for accomplishing this activity is the flows method delimiting the audit segments using the correlation criteria between different operations and the respective accounts balances. \r\n\r\nScope of the audit \r\n\r\nThe objectives of an audit engagement should offer the correct presentation of entity transactions in the financial statements for which the auditor presents his/her assurance by the opinion expressed in the audit report. For this, the auditor should set a series of objectives which, before establishing them, should know management assertions on the criteria used for financial information registering and their presentation in the financial statements. \r\n