Audit and Accounting Guide - Depository and Lending Institutions

Chapter 5 Audit Considerations and Certain Financial Reporting Matters¹

Overview

5.01 AU-C section 200, Overall Objectives of the Independent Auditor and the Conduct of an Audit in Accordance With Generally Accepted Auditing Standards,² addresses the independent auditor’s overall responsibilities when conducting an audit of financial statements in accordance with generally accepted auditing standards (GAAS). Specifically, it sets out the overall objectives of the independent auditor (the auditor) and explains the nature and scope of an audit designed to enable the auditor to meet those objectives. It also explains the scope, authority, and structure of GAAS and includes requirements establishing the general responsibilities of the auditor applicable in all audits, including the obligation to comply with GAAS.

5.02 Paragraph .12 of AU-C section 200 states that the overall objectives of the auditor, in conducting an audit of financial statements, are to

a.     obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, thereby enabling the auditor to express an opinion on whether the financial statements are presented fairly, in all material respects, in accordance with an applicable financial reporting framework; and

b.     report on the financial statements, and communicate as required by GAAS, in accordance with the auditor’s findings.

5.03 Depository and lending institutions are subject to ...