The financial report of the organization is prepared by its management, ensuring compliance with legal requirements and financial reporting standards. After preparation, the financial report is approved by the organization’s directors.
When auditors commence their examination, they first gain a comprehensive understanding of the organization’s activities, taking into account economic and industry factors that could have influenced the business during the reporting period. For each significant activity listed in the financial report, auditors identify and assess any risks that could have a considerable impact on the financial position or performance. They also evaluate the internal controls implemented by the organization to mitigate those risks.
Based on the identified risks and controls, auditors review management’s efforts to ensure the accuracy of the financial report and examine supporting evidence. Subsequently, they exercise their judgment to determine if the financial report, as a whole, presents a true and fair view of the organization’s financial results, position, cash flows, and compliance with financial reporting standards, as well as the Corporations Act if applicable. Finally, the auditors prepare an audit report that includes their opinion on the financial report’s accuracy and reliability. This report is presented to the organization’s shareholders or members
