ABSTRACT
This chapter reviews the auditor’s role in the modern world accountability. This auditor evaluation of the financial reporting aspect has been little emphasized in the standards and auditing/accounting research. Yet this is as key a judgment for the auditor as the acceptability of the audit evidence. Audit report modifications are based either on scope restrictions or problematic financial reporting. The audit opinion must be based on having sufficient appropriate evidence to support the evaluation of the financial reporting in the financial statements. A risk model for evaluation of fair presentation financial reporting thus needs to incorporate material misstatements that can arise from making predictions in forecasting future events via assumptions based on the audit evidence. These financial reporting risks are dealt with by appropriate financial reporting and this is why, after obtaining all the evidence, auditors should consider these risks in evaluating the financial reporting.
