15. Reports - Opinions and Disclaimers

Question 1

What should the opinion refer to when an adverse opinion is expressed?

Answer 1

The opinion should directly refer to a basis for adverse opinion section that discloses the basis for the adverse opinion.

Question 2

When is an adverse opinion expressed?

Answer 2

When the financial statements are not presented fairly in accordance with the applicable reporting framework.

Question 3

What does a material misstatement require?

Answer 3

The auditor to express a qualified or an adverse opinion.

Question 4

If an auditor is unable to obtain sufficient appropriate audit evidence to conclude that the FS as a whole are free from material misstatement, what opinion should they express?

Answer 4

The auditor should either express a qualified opinion or disclaimer of opinion.

Question 5

What does the auditor’s responsibility section state for a nonissuer?

Answer 5

“…we exercise professional judgement and maintain professional skepticism throughout the audit.”

Question 6

What does a critical audit matter (CAM) result from?

Answer 6

The audit of the financial statements that (1) was communicated or required to be communicated to the audit committee; (2) relates to material accounts or disclosures; and (3) involved especially challenging, subjective, or complex auditor judgment.

Question 7

What can result from the inability to obtain sufficient appropriate evidence?

Answer 7

(1) circumstances beyond the control of the entity, (2) circumstances related to the nature or the timing of the work, or (3) a management-imposed limitation.

Question 8

What opinion should an auditor express if they are unable to obtain sufficient appropriate evidence?

Answer 8

A qualified opinion or a disclaimer.