Question

1. The objective of financial statement audit
2. The three major categories of assertions
3. The difference between reasonable and absolute assurance
4. The management responsibility and the auditor responsibility
5. The various management assertions such as completeness assertion, existence assertion, cutoff assertion, classification and understandability assertion, etc.
6. The relation between management assertions and audit objectives

Answer 1

Object of Financial Statement Audit:
1)	Expressing opinion about "True and fair view" of income, financial position and cashflow
2)	Disclosure of financial fact in best interest of stakeholders
3)	Reporting of financial descripancies if any
4)	Compliance of statutory requirement
Three major categories of assertions:
1)	Existence: Existence assetion means whether existence of assets, liability and shareholders fund
	is verified and accurate at the end of accounting period as stated in financial statement.
2)	Completeness: Which means all the information transacted during the accounting period has included
	in the financial statement.
3)	Presentation and disclosure: All the financial information has presented as per reporting requirement
	and appropriately disclosed in best interest of stateholders.
Difference between reasonable and absolute assurance: Absolute assurance is ensuring that there is absolute
assurance of no misstatement in financial statements and all information disclosed are accurate, while absolute
assurance give reasonable assurance by expressing opinion by auditor using the various audit techniques and
analytical skills instead investigation as done in absolute assurance.
Management responsibility and the auditor responsibility: Management is responsible to prepare financial
statement and providing all financial and relevant information, while Auditor is responsible to express
opinition and disclosing the fact in best interest manner to the stakeholders as per the reporting requirement.