Tickitt & Run have just completed the audit of Gofaster Motors Ltd for the year ended 31 December 20x7. They asked one of the audit staff to draft the audit report and he produced this:

‘Report of the auditors to Gofaster Motors Ltd Basis of opinion We conducted our audit in accordance with Auditing Standards. An audit includes examination, on a test basis, of evidence relevant to the amounts and disclosures in the financial statements. It also includes an assessment of all the estimates and judgements made by the directors in the preparation of the financial statements, and of whether the accounting policies are appropriate to the company’s circumstances, consistently applied and adequately disclosed.

We planned and performed our audit so as to obtain as much information and explanation as possible given the time available for the audit. We confirm that the financial statements are free from material misstatement, whether caused by fraud or other irregularity or error. The directors however are wholly responsible for the accuracy of the financial statements and no liability for errors can be accepted by the auditor. In forming our opinion we also evaluated the overall adequacy of the presentation of information in the company’s annual report?

Discussion Questions

1. Identify and explain the errors in the above extract.