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The objective of the auditor is to whether the financial statements:
1. give true & fair view (or present fairly in all material respect)
2. are prepared, in all material respects, in accordance with an applicable financial reporting framework
as book of kaplan has mentioned meaning of “True” as factually correct information which conforms with accounting standards and relevant legislation, & agrees with the underlying record.
so my question is Does the line i.e. factually correct information which conforms with accounting standards and relevant legislation, fulfills the objective of the auditor that is to prepare financial statements as per financial reporting framework? Isn’t Accounting standards are the part of the financial reporting framework?
and lastly from objective of point no.1, give true & fair view (or present fairly in all material respect) fulfills even requirement of financial statement to be as per financial reporting framework?
I’m confused, please answer my query.
Please see page 32 of the notes for the distinction between “true” and “fair”.
Your 1. is correct but there is no “material respects” caveat in respect of 2 – it should be “are properly prepared in accordance with [applicable financial reporting framework]”
Applicable FR framework could be IFRS or it could be company legislation (e.g. Companies Act 2006). So if, for example, company legislation says the financial statements must disclose all loans to directors – they must all be disclosed – however small. “Properly prepared” means that preparation is correct in all respects – not just materially correct.