Elements of financial statements as subject area of audit

In conditions of constantly increasing requirements to the audit quality of financial reporting development of new approaches to the audit methodology based on the structural-functional approach in particular becomes essential. The purpose of the research is to eliminate redundant components of the audited financial reporting and improve the widely used model of audit based on the employment of the structural-functional approach. We studied reported account elements and facts of economic life as structural and functional components of the audited reporting based on the analysis of international and Russian regulations inherent to financial reporting. As a result, the model of audit of financial reporting incorporating fundamental principles of the structural-functional approach is proposed. Using this approach the auditor developed a practical methodology for determination of specific financial reporting assertions and audit procedures to verify the validity of every element of financial reporting. Therefore, we came to a conclusion that a detailed audit methodology, in case of financial reporting assertions, creates optimum conditions helping to verify the validity of functional and structural components' reflection in the accounting reporting.