Some Necessary Information That Auditors Must Grasp When Reviewing Units

Tuyet Hoan

14:18, 11/07/2024

Auditors must understand the entity being reviewed, the entity's environment, and the framework for the preparation and presentation of financial statements applied to identify areas in the financial statements that typically generate material misstatements. This understanding provides the basis for designing procedures for those areas.

Auditors must understand the following information:

- Related business sectors, legal regulations, and other external factors of the entity, including the applicable financial reporting and presentation framework;- Characteristics of the entity, including:- Field of operation;- Type of ownership and management structure;- Forms of investment that the entity is currently and will be involved in;- Organizational structure of production and capital structure of the entity;- Objectives and strategies of the entity;- Accounting system of the entity;- Accounting policies selected and applied by the entity.

When performing review contracts, the auditor must determine the materiality level for the entire financial report, and apply this materiality level to design procedures and evaluate the results obtained from implementing these procedures.

For more details, see Circular 65/2015/TT-BTC effective from January 1, 2016.

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