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External auditors reporting

Forums › Ask ACCA Tutor Forums › Ask the Tutor ACCA BT – FIA FBT › External auditors reporting

  • This topic has 6 replies, 4 voices, and was last updated 2 years ago by Ken Garrett.
Viewing 7 posts - 1 through 7 (of 7 total)
  • Author
    Posts
  • January 23, 2023 at 7:23 am #677245
    arslan.ansari
    Participant
    • Topics: 8
    • Replies: 2
    • ☆

    In an organisation which operates a good system of corporate governance, to whom should the
    external audit department of an organisation report?
    A The Board of Directors
    B The Finance Director
    C The Audit Committee
    D The shareholders

    January 23, 2023 at 1:47 pm #677260
    Ritul
    Participant
    • Topics: 11
    • Replies: 7
    • ☆

    D is the correct answer.. External audit department of an organisation report to shareholders.

    January 23, 2023 at 2:55 pm #677263
    Ken Garrett
    Keymaster
    • Topics: 10
    • Replies: 10589
    • ☆☆☆☆☆

    What do you want from me? Don’t you have the answer to this question in your revision kit?

    January 24, 2023 at 12:22 pm #677292
    Flora.May
    Participant
    • Topics: 10
    • Replies: 13
    • ☆

    As written in Kaplan , external auditor should report to the audit committee which acts as an interface between Auditors and BOD
    So why is this D?

    January 24, 2023 at 1:51 pm #677301
    Ken Garrett
    Keymaster
    • Topics: 10
    • Replies: 10589
    • ☆☆☆☆☆

    The external auditors ultimately report to the shareholders (or members). The auditors might at some point liaise with the audit committee and, indeed, furnish the committee and the board with, for example, reports on internal control problems. However, the prime purpose of external auditors is to report to the members/shareholders on whether the financial statements show a true and fair view. This opinion is given in the Audit Report.

    January 26, 2023 at 8:38 am #677378
    Flora.May
    Participant
    • Topics: 10
    • Replies: 13
    • ☆

    So, if a question like this comes where it’s unclear if they are asking about the fraud reporting or internal control reporting, what should be the answer?

    thanks for your help! sir.

    January 26, 2023 at 3:27 pm #677400
    Ken Garrett
    Keymaster
    • Topics: 10
    • Replies: 10589
    • ☆☆☆☆☆

    If a question is unclear it is unclear for everyone, including me. Nobody knows what the examiner wants so you have to go for the option you think is correct or best.

    Real ACCA questions are thoroughly scrutinised so it is very unlikely that there will be an ambiguous question.

  • Author
    Posts
Viewing 7 posts - 1 through 7 (of 7 total)
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