Scope of Audit

1

Cover adequately all aspects of the enterprise relevant to the financial statements being audited.

2

To form an opinion on the financial statements,

3

Decide whether the relevant information is properly disclosed in the financial statements

4

Assesses the reliability and sufciency of the information

5

Not expected to perform duties which fall outside the scope of his competence.

6

Constraints on the scope of the audit

1

Adequately all aspects

The audit should be organized to cover adequately all aspects of the enterprise relevant to the financial statements being audited.

2

Opinion formation

To form an opinion on the financial statements, the auditor should be reasonably satisfied as to whether the information contained in the underlying accounting records and other source data is reliable and sufficient as the basis for the preparation of the financial statements.

3

properly disclosed

In forming his opinion, the auditor should also decide whether the relevant information is properly disclosed in the financial statements subject to statutory requirements, where applicable.

4

Reliability

Assesses the reliability and sufficiency of the information.

The auditor assesses the reliability and sufficiency of the information contained in the underlying accounting records and other source data by:

(a)making a study and evaluation of accounting systems and internal controls

(b)carrying out such other tests, enquiries and other verification procedures of accounting transactions and account balances as he considers appropriate in the particular circumstances.

Determines whether the relevant information is properly disclosed in the financial statements

Now question comes how do we know information of finanacial statement is correct or not .

(a)comparing the financial statements with the underlying accounting records and other source data to see whether they properly summarize the transactions and events recorded therein; and

(b)considering the judgments that management has made in preparing the financial statements accordingly, the auditor assess the selection and consistent application of accounting policies, the manner in which the information has been classified, and the adequacy of disclosure.

5

Not expected to performduties out of scope

The auditor is not expected to perform duties which fall outside the scope of his competence. For example, the professional skill required of an auditor does not include that of a technical expert for determining physical condition of certain assets.

6

Constraints

Constraints on the scope of the audit of   that impair the auditor's ability to express an unqualified opinion on such financial statement should be set out in his report, and a qualified opinion or disclaimer of opinion should be expressed as appropriate.