ACCA Audit and Assurance (F8) Practice Exam

What key document should an auditor prepare to report on the results of their audit?

1. Management Letter

2. Audit Report

3. Financial Statement

4. Stakeholder Analysis

The correct answer is: Audit Report

The auditor prepares an Audit Report to communicate the results of their audit procedure to stakeholders. This report provides a formal opinion on the fairness and accuracy of the financial statements, determining whether they adequately represent the financial position and performance of the entity in accordance with applicable financial reporting frameworks. The Audit Report is critical as it contains the auditor's opinion based on the assessment of the financial statements, examines compliance with relevant laws and regulations, and evaluates the effectiveness of controls. The report must address whether the financial statements present a true and fair view and may also include any significant issues encountered during the audit process. The Audit Report serves as a key document that enhances the credibility of the financial statements, thereby instilling confidence among stakeholders, such as investors, regulators, and the management of the entity. It contrasts with other documents like the Management Letter, which may address specific issues or recommendations for improvement but is not the primary report of the audit findings. Additionally, while Financial Statements are produced by the entity and reflect its financial activities, they are not prepared by the auditor, and a Stakeholder Analysis does not directly relate to the audit's specific conclusions and opinions.