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Chapter 4

External audit engagement

The objective of an external audit engagement is to enable the auditor to express an
opinion on whether the financial statements:

 Give a true and fair view (or present fairly in all material respects).

 Are prepared, in all material respects, in accordance with an applicable financial
reporting framework.

 The financial reporting framework to be applied will vary from country to
country.

The objectives of an auditor are to:

 Obtain reasonable assurance about whether the financial statements as a
whole are free from material misstatement, whether due to fraud or error.

 Express an opinion on whether the financial statements are prepared, in all
material respects, in accordance with an applicable financial reporting
framework.

 Report on the financial statements, and communicate in accordance with the
auditor's findings.

The purpose of an audit is to enhance the degree of confidence of the intended users
in the financial statement. This is not 100% guarantee, but reasonable assurance.

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