Chapter 3 Auditing Objectives and Audit Process,3.1 Overall Audit Objective and Responsibilities 3.2 Management Assertions 3.3 Specific Audit Objectives 3.4 Audit Process,Learning Objectives,After studying this chapter, you should be able to 1. Comprehend the objective of an audit of financial statements and the definition of management assertions. 2. Distinguish managements responsibilities for preparing financial statements from the auditors responsibilities for verifying those financial statements. 3. Explain why the auditor is responsible for reasonable but not absolute assurance. 4. Remember the transaction-related and balance-related audit objectives. 5. Learn the audit process.,Before beginning the study of how to conduct an audit, it is necessary to understand the overall objectives of the audit, the auditors responsibilities in conducting the audit, and the specific objectives the auditor tries to accomplish. Without an understanding of these topics, planning and accumulating audit evidence during the audit can not be done effectively.,3.1 Overall Audit Objective and Responsibilities,3.1.1 Overall Audit Objective 3.1.2 Managements Responsibilities 3.1.3 Auditors Responsibilities,Glossary,overall audit objective 总体审计目标 managements responsibilities管理层责任 auditors responsibilities 审计师的责任,3.1.1 Overall Audit Objective,The overall objective of the audit of financial statements by the independent auditor is the expression of an opinion on the fairness with which they present fairly, in all material respects, financial position, results of operations, and its cash flows in conformity with generally accepted accounting principles.,The overall objective of the audit of financial statements emphasizes issuing an opinion on financial statements. The only reason auditors accumulate evidence is to enable them to reach conclusions about whether financial statements are fairly stated in all material respects and issue an appropriate audit report.,The objective of an audit of financial statements,The objective of an audit of financial statements is to enable the auditor, by conducting an audit, to express an opinion on the following aspects of the financial statements: (a) Whether the financial statements are prepared in accordance with the requirements of the applicable accounting standards; and (b) Whether the financial statements are presented fairly, in all material respects, the financial position, operating results and cash flows of the entity.,在执行财务报表审计工作时，注册会计师的总体目标是： （一）对财务报表整体是否不存在由于舞弊或错误导致的重大错报获取合理保证，使得注册会计师能够对财务报表是否在所有重大方面按照适用的财务报告编制基础编制发表审计意见； （二）按照审计准则的规定，根据审计结果对财务报表出具审计报告，并与管理层和治理层沟通。,3.1.2 Managements Responsibilities,The responsibility for adopting sound accounting policies, maintaining adequate internal control, and making fair representations in the financial statements rests with management rather than with the auditor. Because they operate the business daily, a companys management knows more about the companys transactions and related assets, liabilities, and equity than the auditor does. In contrast, the auditors knowledge of these matters and internal control is limited to those acquired during the audit.,Although the management has the responsibility for the preparation of the financial statements and the accompanying footnotes, it is acceptable for an auditor to draft the financial statements for the client or to offer suggestions for clarification. In the event that management insists on financial statement disclosure that the auditor finds unacceptable, the auditor can either issue an adverse or qualified opinion or withdraw from the engagement.,3.1.3 Auditors Responsibilities,An auditor has a responsibility to plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, which caused by error or fraud. Due to the nature of the audit evidence and the characteristics of fraud, the auditor is able to obtain reasonable, but not absolute, assurance that material misstatements are detected. The auditor has no responsibility to plan and perform the audit to obtain reasonable assurance those misstatements, which caused by errors or fraud, that are not material to the financial statements are detected.,与管理层和治理层责任相关的执行审计工作的前提（以下简称执行审计工作的前提），是指管理层和治理层（如适用）认可并理解其应当承担下列责任，这些责任构成注册会计师按照审计准则的规定执行审计工作的基础： （一）按照适用的财务报告编制基础编制财务报表，并使其实现公允反映（如适用）； （二）设计、执行和维护必要的内部控制，以使财务报表不存在由于舞弊或错误导致的重大错报； （三）向注册会计师提供必要的工作条件，包括允许注册会计师接触与编制财务报表相关的所有信息（如记录、文件 和其他事项），向注册会计师提供审计所需的其他信息，允许注册会计师在获取审计证据时不受限制地接触其认为必要的内部人员和其他相关人员。,While the auditor is responsible for expressing an audit opinion on the financial statements in accordance with China Standards on Auditing, the responsibility for the preparation of the financial statements in accordance with the requirements of the applicable accounting standards is that of management of the entity, with oversight from those charged with governance.,The audit of the financial statements does not rel