Statement of responsibilities and basis of opinion
Auditors should distinguish between their responsibilities and those of the directors by including the following in their report:
(i) a statement that the financial statements are a responsibility of the directors.
(ii) a reference to a description of those responsibilities when set out in the financial
statements.
(iii) a statement that the auditor‟s responsibility is to express an opinion on the
financial statements.
Where the financial statements or accompanying information do not include an adequate description of directors‟ responsibilities, the auditor‟s report should include a description of those responsibilities.
The directors are required to prepare financial statements for each financial year which give a true and fair view of the state of affairs of the company and of the profit or loss of the company for that period.
In preparing financial statements, the directors are required to :
(a) Select suitable accounting policies and then apply them consistently.
(b) Make judgements and estimates that are reasonable and prudent.
(c) State whether applicable accounting standards have been followed subject to any
material departures disclosed and explained in the financial statements.
(d) Prepare the financial statements on the going concern basis unless it is
inappropriate to presume that the company will continue in business.
The directors are responsible for keeping proper accounting records which disclose with reasonable accuracy at any time, the financial position of the company to enable them to ensure that the financial statements comply with the Companies Act and relevant legislation.
Directors are responsible for safeguarding the assets of the company and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.
Basis of