WHAT ASSURANCE CAN I GET FROM AN AUDIT?
What are auditors responsible for, and what don’t they do?
The responsibilities of the auditor are clearly set out the in the audit report (please provide link) which states the following:
Our objectives are to obtain reasonable assurance about whether the financial report as a whole is free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with the Australian Auditing Standards will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of this financial report.
While it is clear what we are responsible for, it is worth noting the things we don’t do as auditors. Here’s a summary table to help you understand what assurance you can get from your auditor’s work:
What auditors DO
Obtain reasonable assurance about whether the financial report is as a whole Free from material misstatement, due to fraud or error.
What auditors DON’T DO
We don’t check every figure in the financial report – an audit is based on selective testing.
We don’t provide advice around the activities or strategic decisions of an organisation.
We don’t audit every transaction – this is neither necessary nor economically viable.
We only audit the financial statements; we don’t audit the other information provided in the annual report.