- This topic has 3 replies, 2 voices, and was last updated 7 years ago by
.
-
Posts
-
Hello sir,
hope you are well. If there is one or more material or immaterial misstatements in the FS, and the auditor detects them, then:
1) should the auditor inform the management about them before the audit opinion or after?
2) can the management correct the misstatements recognising they are wrong, if they want to present more accurate Financial Statements?
Thank you in advance.Absolutely – the auditor would discuss misstatements with management/TCWG and seek amendments so that the sum of uncorrected misstatements is not material (and hence the audit opinion would be unmodified).
Thank you, sir. If the misstatement or misstatements are not material should the auditor seek from the management to amend them in order to the FS be more accurate or there is no reason to do that and should leave these immaterial misstatements as they are? Thank you for your precious help.
In accordance with ISA 450 Evaluation of Misstatements Identified during the Audit, “ALL misstatement accumulated during the audit” should be communicated to “the appropriate level of management”. In order to given an unmodified opinion, the overall effect of uncorrected misstatements, after management has made final amendments, must be immaterial. One of the reasons why management may not correct all misstatements is that some will be immaterial and the financial statements do not need to be any more accurate than is necessary to give a true a fair view.
Also, if any misstatements are the result of control deficiencies they will be included in the report to management.
- You must be logged in to reply to this topic.