Acct 3708 Lecture Pdf

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University of New South Wales
School of Accounting
Auditing and Assurance Services
2013
LECTURE 1
Introduction to the Audit Function
Assurance Framework
Australian Corporate Audits
Auditing Standards

Lecture Overview
• Announcements
• Overview course requirements
• Introduction to the course
– Assurance
Auditing
– Legal requirements
– Auditing standards

Announcements
• 1. Tutorial Allocation
– Once classes are full no more will be admitted
– No new classes will be scheduled
– Staff-assisted changes
• Will be allowed for exceptional circumstances only; and only where the class is not already at maximum size

• 2. Student email address
• used for course announcements including offer of supplementary
final
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• (Framework for Assurance Engagements para 21)

Absolute Assurance
• Absolute assurance can never be provided because of:
– The nature of accounting:
• Valuation issues,
• Accounting policy choice and judgments,
• Contingent items,

– Time and cost of evidence collection and evaluation. Reasonable Assurance
• Reasonable assurance is a high but not absolute level of assurance
• The conclusion is expressed in a positive form
– The financial statements are true and fair.

• An audit engagement provides a reasonable level of assurance.
• The opinion is expressed in an audit report.

Limited Assurance
• Limited assurance is a lower level of assurance than reasonable assurance.
– The actual level of assurance depends upon the nature of the procedures that are carried out.

• The conclusion is expressed in a negative form
– Nothing has come to our attention to suggest that the financial statements are not true and fair.

• A review engagement provides a limited level of assurance. Auditing
• The American Accounting Association (AAA) has defined auditing as:
– A systematic process of objectively

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