ISA 701 Communicating Key Assignment

Added on - 19 Nov 2019

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ASA701
Executive SummaryIn the below case, we have highlighted the importance of ASA 701 Communicating Key AuditMatters in the Independent Auditor’s Report. We have tried to provide the core reasons whichwere behind the development of ASA 701 in Australia. Further, we have tried through the helpof an example collapse of ABC learning limited, the impact of the new auditing standards thatcould have been in case, it would have been developed in the early 2000. Auditors powers in thekey audit matters definition has been clearly highlighted and explained in the below study.
ContentsExecutive Summary.........................................................................................................................2Introduction......................................................................................................................................4Application of ASA 701..................................................................................................................4ABC Learning..................................................................................................................................6Application of ASA 701 on ABS Learning.....................................................................................8Conclusion & Recommendations..................................................................................................10References......................................................................................................................................11
IntroductionASA 701 “Communicating Key Audit Matters in the Independent Auditor’s Report” was set upin line with the international auditing standard ISA 701 Communicating Key Audit Matters inthe Independent Auditor’s Report. To bring ASA 701 in line with the Australian legislation therewere certain differences which were kept in ASA 701 with international auditing standard ISA701. These difference the captain the auditing standard, to keep the same in line with theprevailing Australian legislation. The ASA 701 has been introduced in the country with anintention to meet out the requirement of the shareholders and stakeholders of the company. Thestakeholders and shareholders of the company are not only interested in knowing about thefinancial health of the company but also about the internal strength and future prospects of thecompany as well. In earlier years, the auditor of the companies lack sufficient powers that wererequired to highlight key audit issues to the users of the financial statement. The ASA 701provides these powers to the auditor along with proper guidelines which they can refer to attimes of determining the key audit issues. Auditing standard has been launched by thegovernment with an intention to provide sufficient information to the users about the companyand to make them aware about the audit matters which may impact their decision making inrelation to investment in the company.[ CITATION AUA15 \l 1033 ]
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