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Completion of the Audit summary
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- Stellenbosch University (SUN)
a summary on Completion of the audit chapter
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COMPLETION OF THE AUDITASSESSING AUDIT DIFFERENCES
The understating of 68 000 regarding the provision - is smaller than the
materiality figure and is thus quantitatively not material on its own.
If difference is regarded with the invoice error (over-valuation of
inventory) - the total overstating of current assets is R73 000.
Differences on current assets - are thus almost equal to materiality.
Auditor must assess if he wants the final materiality figure - for the
assessment of audit differences has to be equal to the planning materiality
of R75 000 (i.e. does he still feel that R75 000 is the best cut-off point?).
Also have to take into account - the nature of the difference (that it is an
estimate and largely left to professional judgement).
According to those decisions - he will have to finally judge whether he will
be able to accept the differences or modify his report.
If concluded that the joint audit differences are not material - there will be
no impact on the audit report.
If concluded that the audit differences accepted as material - the audit
report will have to be modified (‘except for’) and
Details of the matter - discussed in an explanatory paragraph in the audit
report.
, EFFECT OF SCHEME ON AUDIT REPORT
The difference of R40 000 - smaller than materiality and thus quantitatively
not material.
The difference however - is the result of an effort to make a deduction
contrary to tax legislation and GAAP.
The difference results in - a change from a net profit position to a net loss.
The latter two points - cause the difference to be qualitatively material.
The difference impact on the auditor’s opinion – a modified report will
have to be issued.
AUDIT OPINIONS
Unqualified Report with an Emphasis of Matter Paragraph
- Issued when - our opinion is not influenced by the errors
- But there is a significant item - that should be noted in the audit report
Qualified Opinion
- Issued if - the auditor is of the opinion that the financial statements as a
whole is still a fair presentation
- “except for” - certain material misrepresentations that is not pervasive or
fundamental
Disclaimer of Opinion
- Issued if not able to gather sufficient evidence - to give an opinion about
the fairness of the financial statements.
- Reason - there was a limitation on the scope of the work of our audit
procedures.
Adverse Opinion
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