2008年审计英语讲义（绪论）INTRODUCTION

1.An external audit is a type of assurance engagement that is carried out by an auditor to give an independent opinion on a set of financial statements.
　　Assurance engagement 鉴证业务
　　External audit 外部审计
　　Carry out 执行
　　Independent 独立的 　　

　　Letter of Engagement 审计业务约定书 （审计准则2006－1111号）
　　2.Objective of external audit 　　

　　The objective of an audit of financial statements is to enable the auditor to express an opinion on whether the financial statements are prepared, in all material respects, in accordance with an applicable financial reporting framework. The phrases used to express the auditor’s opinion are give a true and fair view or present fairly, in all material respects, which are equivalent terms. A similar objective applies to the audit of financial or other information prepared in accordance with appropriate criteria. 　　

　　Material 重要的;实质的
　　In accordance with 和……一致
　　Applicable 适用的
　　Give a true and fair view 如实和公允的反映实际情况
　　In all material respects, present fairly 在所有重大方面,公允反映 　　

　　Criteria 规定,规则
　　[中文教材P105 第二段]
　　3.ISA200 Objective and general principles governing an audit of financial statements
　　[中文教材P105第二段]
　　财务报表审计的目标和一般原则 　　

　　4.Management’s responsibility for the financial statements
　　Management is responsible for the preparation and fair presentation of these financial statements in accordance with International Financial Reporting Standards. This responsibility includes: designing, implementing and maintaining internal control relevant to the preparation and fair presentation of financial statements that are free from material misstatement, whether due to fraud for error; selecting and applying appropriate accounting policies; and making accounting estimates that are reasonable in the circumstances. 　　

　　[中文教材P106]
　　IFRS vs. CAS &IAS
　　Internal control 内部控制 　　

　　Free from 远离；没有
　　Material misstatement 重大错报 　　

　　Fraud 欺诈;舞弊
　　Accounting policy 会计政策
　　Accounting estimate 会计估计
　　5. The audit report refers to the fact an auditor obtains evidence on a test basis. He does not check everything and is therefore giving reasonable not absolute assurance. 　　

　　Test basis 在测试的基础上 　　

　　An audit gives the reader reasonable assurance on the truth and fairness of the financial statements. The audit report does not guarantee that the financial statements are correct, but that they are true and fair within a reasonable margin of error.
　　Assurance 保证;确信;
　　Guarantee 保证
　　Margin of error 误差幅度
　　One of the reasons that an auditor does not give absolute assurance is the inherent limitations of audit.
　　Inherent limitation 固有限制
　　The assurance given by auditors is governed by the fact that auditors use judgment in deciding what audit procedures to use and what conclusions to draw, and also by the limitations of every audit.
　　Draw a conclusion 得出结论 　　

　　Judgment 判断
　　Audit procedure 审计程序
　　Misstatements which are significant to readers may exist in financial statements and auditors will plan their work on this basis, that is, with professional skepticism. The concept of significant to readers is the concept of materiality.
　　Professional skepticism 专业的怀疑态度
　　Skepticism怀疑态度：怀疑或疑问的态度或思想状态
　　Concept of materiality 重要性概念
　　[中文教材P105&108]
　　6.Cycle approach 循环法
　　Transaction cycle 交易循环
　　[中文教材 P110]
　　7.Assertions used by the auditor

　　Completeness: 完整性
　　Accuracy: 准确性
　　Cut-off: 截止
　　Classification: 分类 　　

　　Assertions about classes of transactions and events for the period under audit: 与各类交易和事项相关的认定 　　

　　Existence:存在;
　　Rights and obligation:权利和义务
　　Valuation and allocation:计价和分摊 　　

　　Assertions about account balances at the period-end: 期末账户余额的认定
　　Occurrence and rights and obligations: 发生以及权利和义务
　　Classification and understandability: 分类和可理解性:
　　Assertions about presentation and disclosure: 与列报相关的认定
　　8.Stages of Auditing
　　
　　
　　[中文教材P115]
　　Planning of the audit
　　Audit risk
　　Test of control = compliance test 　　

　　Substantive procedure 实质性程序 [中文教材p298]
　　Analytical review 分析程序
　　You are the audit manager of Hood Enterprises a limited liability company. The company’s annual turnover is over $10 million.
　　Required:
　　（a）Compare the responsibilities of the directors and auditors regarding the published financial statements of Hood Enterprises.　　　　　　　　　　　　　　　　　　　　　　（6 marks）
　　Preparation of financial statements
　　The directors are normally required to prepare the financial statements of the company using the appropriate law of their country and in accordance with the Intermational Accounting Standards（IASs）. The auditors are normally required to check or audit those finalcial statements, again in accordance with the legislation of their country and the Intermational Statements on Auditing.
　　Fraud and error
　　The directors are responsible for preventing and detecting fraud and error in the financial statements, no matter how immaterial this may be. Auditors are responsible for ensuring that the financial statements show a true and fair view; in other words that the financial statements are materially correct. Auditors are not required to detect immaterial fraud or error.
　　Disclosure
　　The directors must ensure that there is adequate disclosure of all matters required by statute or IASs in the financial statements. The auditor will check that disclosure provisions have been complied with ,and where certain disclosures have not been made（e.g. ISA 550 regarding related party transactions）provide this information in the audit report.
　　Going concern
　　The directors are responsible for ensuring that the company will contiune in operational existence for the foreseeable future,and report to the members in the published financial statements if this is unlikely to be the case. The auditor will check the accuracy of the directors’ working and assumptions and if these are considered incorrect or inappropriate, then the audit report may be modified or qualified to bring the situation to the attention of the members of the company.　　
　　ISA 500 Audit Evidence （Revised） states the management implicitly or explicitly makes assertions relationg to the various elements or financial statements including related disclosures. Auditors may use three categories of assertions to form a basis for risk assessments and the design and performance of further audit procedures. The three categories suggested by ISA 500 relate to （i） classes of transactions,（ii）account balances ,and （iii）presentation and disclosure,One assertion applicable to all three categories is completeness:that all transactions, events, assets ,liabilities, equity interests and disclosures that should be included, are included in the financial statements.
　　Required:
　　（a） List and describe SIX financial statement assertions, other than completeness, used by auditors in the audit of financial statements.　　　　　　　　　　　　　　　　　　　　　（6 marks）
　　（a）Six financial statement assertions
　　（i） Existence: an asset, liability or equity interest exists;
　　（ii）Cut of:transactions and events have been recorded in the correct accounting period;
　　（iii）Occurrence:a transaction or event that has been recorded took place and pertains to the entity during the period;
　　（iv）Accuracy and valuation:financial and other information is disclosed fairly and at appropriate amounts;
　　（v）Rights and obligations: the entity holds or controls the rights to assets, and liabilities or obligations of the entity;
　　（vi）Classification:transactions and events have been recorded in the proper accounts.