DEN OFFENTLIGE REVISIONS PÅVIRKNING AF REVISORS RAPPORTERING: Væsentlighed ved rapportering af juridisk-kritisk revision og forvaltningsrevision med udgangspunkt i frie grundskoler

Abstract

This master thesis presents an insight in the revised Danish standards of public auditing (SOR) and the effects derived from the auditors reporting in both the auditors’ records and the independent auditors report published in connection with the annual report. Based on the auditing of a private primary school, the aim of this thesis is to assess how the updated SOR might affect the materiality concept of both the critical legal audit and the performance audit conducted regarding the financial audit of the annual report. It does so by reviewing the SOR and existing public auditing guidelines - but also by including assessments by three leading Danish experts specializing in public auditing of private primary schools. Based on an extensive review of the SOR and guidelines combined with and analysis and discussion of interviewed experts’ opinions, the thesis concludes that: - The materiality of both the critical legal audit and the performance audit should prospectively be of a more quantitative level. Especially during the planning of the audit, the financial materiality level should be used for selecting only essential areas of audit. - The Ministry of Children and Education provides a set of guidelines to the auditors’ records which the auditors must follow. It states in its definition that findings should be reported in two ways: either as a significant remark or a critical remark. - When it comes to the reporting of the critical legal audit and the performance audit in the independent auditors’ report, both the literature and the interviewed experts are more ambiguous. However, there is a consensus among the interviewed experts that financial material findings of rule violation or management shortfall should be reported. Moreover, one of them states that any critical remark in the auditors’ records should be reported in the auditors’ report as well. Another well-agreed convention for mandatory reporting in the auditors’ report is the accountables’ reliability. If a substantial rule violation or a substantial management shortfall is committed in deliberately the finding should also be reported in the independent auditors’ report. Thus, the auditor still needs to conduct a significant qualitative assessment of the nature and context of the rule violation or management shortfall to assess, whether to report the findings recovered by the public auditing.

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A master thesis from Aalborg University

DEN OFFENTLIGE REVISIONS PÅVIRKNING AF REVISORS RAPPORTERING: Væsentlighed ved rapportering af juridisk-kritisk revision og forvaltningsrevision med udgangspunkt i frie grundskoler

[The influence of public auditing on the auditor's reporting: Materiality at auditors reporting of the public auditing based on the auditing of a private primary school,]