Sample interview questions: Can you explain the role of auditors in evaluating the adequacy of disclosures under IFRS?
Sample answer:
Auditors’ Role in Evaluating Disclosure Adequacy Under IFRS
Auditors play a crucial role in evaluating the adequacy of disclosures made by companies under International Financial Reporting Standards (IFRS):
Assessing Completeness and Accuracy:
Auditors review financial statements, notes, and other disclosures to ensure that all material information has been included and accurately represented. They determine whether disclosures comply with IFRS requirements, including those related to:
- Assets, liabilities, equity
- Significant accounting policies
- Related-party transactions
- Contingencies
Determining Clarity and Understandability:
Auditors evaluate whether disclosures are presented in a clear and understandable manner. They assess whether the language used is accessible to users and whether the information is organized logically for easy comprehension. Disclosures should enable users to:
- Understand the company’s financial performance
- Make informed decisions about the company
- Assess the reliability of the financial statements
Identifying Material Omissions:
Auditors identify any material omissions in disclosures. Materiality is a qualitative assessment that considers the magnitude and nature of information in the context of its likely impact on users’ decisions. An auditor’s responsibilities include:
- Identifying di… Read full answer