Question

What is the: a) Overall objective of a financial statement audit? b) Opinion expressed by auditors in an external attest audit? c) Itemise and explain the types of opinion an external attest audit might express

Answer 1

Solution. a)When an organization decides to operate in competitive economic market, to sustain it needs to make decision of its activities. It needs to record,analyze and prepare financial statements for future decision activities in relation to costs and revenue generation. The objective of financial statement audit is to work actively under laid regulations and internal management people to publish evidences to prove their audit reports align with financial statements. It tests, records and analyzes financial statement reporting assurance and reliability to evaluate true picture of organization's financial position.

b)In external attest audit, evaluation and effectiveness of financial statements of an organization is done by outside or independent auditor. Opinions expressed by external auditor represents true information alignment with accounting standards and recommendations for same.

c)An external auditor can provide with following opinions:

1.Auditors can express on financial statements in accordance with organization's objectives of their effectiveness, efficiency and fairness. For instance, any fraud data included for over statement of financial statement should be reported by the auditors.

2.Auditors can express disclaimer of opinion. For instance, if auditors while auditing are not able to generate enough data/information aligning to business records, it can go with this opinion.