The auditor’s understanding of the entity and its environment, and the applicable financial reporting framework, assists the auditor in understanding the events and conditions that are relevant to the entity, and in identifying how inherent risk factors …

ASA 402 [54]  deals with the auditor’s understanding of the services provided by a service organisation, including internal control, as well as the auditor’s responses to assessed risks of material misstatement. When the entity uses the services of a …

Management makes a number of judgements about the amounts and disclosures in the financial report.  …

ASA 260 contains a discussion of the qualitative aspects of accounting practices. [19]  In considering the qualitative aspects of the entity’s accounting practices, the auditor may become aware of possible bias in management’s judgements. The auditor may …

ASA 540 addresses possible management bias in making accounting estimates. [20]   Indicators of possible management bias do not constitute misstatements for purposes of drawing conclusions on the reasonableness of individual accounting estimates.  They …

In evaluating whether the financial report appropriately discloses the significant accounting policies selected and applied, the auditor’s consideration includes matters such as: Whether all disclosures related to the significant accounting policies that …

Evaluating the understandability of the financial report includes consideration of such matters as whether: The information in the financial report is presented in a clear and concise manner. The placement of significant disclosures gives appropriate …

It is common for a financial report prepared in accordance with a general purpose framework to present an entity’s financial position, financial performance and cash flows. Evaluating whether, in view of the applicable financial reporting framework, the …

Some financial reporting frameworks acknowledge explicitly or implicitly the concept of fair presentation. [21]   As noted in paragraph 7(b) of this Auditing Standard, a fair presentation [22]  financial reporting framework not only requires compliance …