For example, the independent auditor, in observing the taking of a physical inventory, does not purport to act as an appraiser, a valuer, or an expert in materials. They do not include those of a person trained for or qualified to engage in another profession or occupation. 04 The professional qualifications required of the independent auditor are those of a person with the education and experience to practice as such. However, the auditor's responsibility for the financial statements he or she has audited is confined to the expression of his or her opinion on them. The independent auditor may make suggestions about the form or content of the financial statements or draft them, in whole or in part, based on information from management during the performance of the audit. Thus, the fair presentation of financial statements in conformity with generally accepted accounting principles 3 is an implicit and integral part of management's responsibility. The auditor's knowledge of these matters and internal control is limited to that acquired through the audit. The entity's transactions and the related assets, liabilities, and equity are within the direct knowledge and control of management. Management is responsible for adopting sound accounting policies and for establishing and maintaining internal control that will, among other things, initiate, record, process, and report transactions (as well as events and conditions) consistent with management's assertions embodied in the financial statements. The auditor's responsibility is to express an opinion on the financial statements. 03 The financial statements are management's responsibility. 2 The auditor has no responsibility to plan and perform the audit to obtain reasonable assurance that misstatements, whether caused by errors or fraud, that are not material to the financial statements are detected. 1 Because of the nature of audit evidence and the characteristics of fraud, the auditor is able to obtain reasonable, but not absolute, assurance that material misstatements are detected. 02 The auditor has a responsibility to plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether caused by error or fraud. Distinction Between Responsibilities of Auditor and Management These standards require him to state whether, in his opinion, the financial statements are presented in conformity with generally accepted accounting principles and to identify those circumstances in which such principles have not been consistently observed in the preparation of the financial statements of the current period in relation to those of the preceding period. In either case, he states whether his audit has been made in accordance with the standards of the PCAOB. The auditor's report is the medium through which he expresses his opinion or, if circumstances require, disclaims an opinion. 01 The objective of the ordinary audit of financial statements by the independent auditor is the expression of an opinion on the fairness with which they present, in all material respects, financial position, results of operations, and its cash flows in conformity with generally accepted accounting principles. 02 Distinction Between Responsibilities of Auditor and Management Small Business and Broker-Dealer ForumsĪmendments: Amending releases and related SEC approval orders Summary Table of Contents.PCAOB International Institute on Audit Regulation.Conference on Auditing and Capital Markets.Information for Auditors of Broker-Dealers.The International Forum of Independent Audit Regulators and Other International Organizations​.Board Determinations Under the Holding Foreign Companies Accountable Act.PCAOB Cooperative Arrangements with Non-U.S.Updated PCAOB Staff Considerations on Recommending the Identification of Issuers and/or Broker-Dealers in Settled Enforcement Orders.Inspections-Related Board Reports and Statements.Implementation Resources for PCAOB Standards and Rules.Technology Innovation Alliance Working Group.Standards and Emerging Issues Advisory Group.
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