12-08-2010, 12:05 AM
1)Provisions and reserves and
2)vulnerablities of framework.
Provisions and reserves are those where judgement of management is involved, they can increase certain provisions and deccrease certain reserves to achieve incresed net profit for the period and vice versa.
Auditor should check the reasonableness of these estimates based on circumstances in which it was applied such as similar estimates in industry, historical data, pressure's on company.
2) vulnerablities of framework- find opportunities to gain undue advantage of any flexibility or flaw in the framework used (e.g the IAS)
2)vulnerablities of framework.
Provisions and reserves are those where judgement of management is involved, they can increase certain provisions and deccrease certain reserves to achieve incresed net profit for the period and vice versa.
Auditor should check the reasonableness of these estimates based on circumstances in which it was applied such as similar estimates in industry, historical data, pressure's on company.
2) vulnerablities of framework- find opportunities to gain undue advantage of any flexibility or flaw in the framework used (e.g the IAS)
