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Fundamentals of Auditing - ACC311

ACC311 - Fundamentals of Auditing - Lecture 1

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What is an Audit?

Audit is an independent examination of financial statements of an entity that enables an auditor to express an opinion whether the financial statements are prepared (in all material respects) in  accordance with an identified and acceptable financial reporting framework (e.g. international or local accounting standards and national legislations.

This view of audit is presented by ISA 200 Objective and General Principles Governing an Audit of Financial Statements.

The phrases used; “to express the auditor’s opinion” means that the financial statements give a true and fair view or have been presented fairly in all material respects. True and fair presentation means that the financial statement are prepared and presented in accordance with the requirements of the applicable International Financial Reporting Standards (IFRS) and local pronouncements/legislations.

What we can understand as the essential features of an audit from the above definition and explanation are as under:

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