7 .

REVIEW OF ADEQUACY OF DISCLOSURES

 Adequacy of disclosure refers to the ability

for financial statements, footnotes, and
supplemental schedules to provide a
comprehensive and clear description of a
company's financial position.

 Adequacy of disclosure is an accounting

guideline for companies to report all essential
information, including financial statements to
investors.
OCCURRENCE and RIGHTS and OBLIGATIONS – Disclosed
events and transactions have occurred and pertain to the
entity.

COMPLETENESS – All disclosures that should have been

included in the financial statements have been included.

CLASSIFICATION and UNDERSTANDABILITY – Financial

information is appropriately presented and described and
disclosures are clearly expressed.

ACCURACY and VALUATION – Financial and other

information are disclosed fairly and at appropriate
amounts.
8. REVIEW OF WORKING PAPERS

There are three main reasons why it is essential

that the working papers be thoroughly reviewed by
another member of the audit firm at the completion
of the audit:

1. To evaluate the performance of inexperienced

personnel.
2. To make sure that the audit meets the CPA firm’s
standard of performance.
3. To counteract the bias that may enter into the
auditor’s judgment.