What you need to know about IFRS as an auditor?
Here are some things that auditors need to know about IFRS:
- Familiarity with the Standards: Auditors need to have a good understanding of the IFRS standards and how they apply to the specific industry or business they are auditing. This includes knowledge of new and emerging IFRS standards, as well as updates to existing standards.
- Materiality: Auditors must assess materiality, or the significance of any misstatement or omission in the financial statements. This involves considering both quantitative and qualitative factors, and applying professional judgment to determine what is material.
- Internal Controls: Auditors need to evaluate the internal controls of the organization being audited, to ensure that the financial statements are accurate and reliable. This includes assessing the design and implementation of controls, as well as testing their effectiveness.
- Professional Skepticism: Auditors must maintain an attitude of professional skepticism, which involves questioning management's assumptions and challenging the information provided to them. This helps ensure that the financial statements are not materially misstated.
- Communication: Auditors must effectively communicate their findings to management, audit committees, and other stakeholders. This includes providing clear and concise reports that accurately reflect the auditor's conclusions.
For example, suppose an auditor is auditing the financial statements of a multinational company that uses IFRS. The auditor must be familiar with the relevant IFRS standards, such as IFRS 9 Financial Instruments and IFRS 16 Leases, and assess their application to the company's financial statements. The auditor must also evaluate the internal controls of the company and maintain a skeptical attitude throughout the audit process. Finally, the auditor must communicate any findings or concerns to the company's management and audit committee in a clear and effective manner.