GUIDE 1Page 1 of 2

(A100 V12cn)

WHAT IS A FINANCIAL STATEMENT AUDIT?

Before you are introduced to the Deloitte audit approach, it is important to understand what an audit is, and the principles and objectives of an audit. This understanding will help you to comprehend the Deloitte audit approach, so that you can perform the tasks assigned to you during the audit more effectively and efficiently.

Requirements

1. Read the questions included in the table below and identify the true/false answers during the discussion.

2. After the discussion, you will be given some time to complete the activity in pairs.

Statement True False

1. An audit is an assurance engagement where we intend to provide a reasonable, but not absolute, level of assurance.

2. The purpose of the audit is to ensure that the financial statements are 100% correct.

3. A financial statement audit is an expression of an opinion on the financial statements of an entity.

4. In order to audit effectively, the integrity of the entity’s staff does not have to be assessed; it is the numbers that are important.

5. We can accept whatever the entity’s staff tells us, if we think they are honest.

6. To effectively audit an entity, the auditor does not require knowledge of its business environment; it’s the numbers that count.

7. An auditor should be independent of the entity’s management staff.

8. The audit Engagement Partner should be satisfied that the audit engagement team collectively has the appropriate capabilities, competence, and time to perform the audit engagement.

©2012 Deloitte Touche Tohmatsu. All rights reserved.

GUIDE 1Page 2 of 2(A100 V12cn)

9. An audit report is addressed to a specific party and not to the public at large.

10. When there is an inappropriate accounting policy in use, an audit opinion considers whether the difference is material to the financial statements.

©2012 Deloitte Touche Tohmatsu. All rights reserved.