Management responsibilities in an audit
Management is responsible for preparing the financial statements in accordance with the applicable framework, maintaining internal control necessary for that preparation and providing the auditor with relevant information and access. These responsibilities are acknowledged when audit preconditions and engagement terms are agreed.
Worked example
Management prepares the statements, provides contracts and records, and identifies persons from whom the auditor needs evidence.
Common mistake
The external auditor’s opinion does not transfer responsibility for preparing the statements or preventing fraud from management to the auditor.
Where it appears in your exams
| Qualification | Exam | Relationship | Period |
|---|---|---|---|
| ACCA | AAA (INT) | Supporting | September 2026–June 2027 |