AUD 1 - Unmodified (Unqualified) Opinion

Question 1

Define the following in an unqualified opinion for issuer:

1) Title (same as unmodified)
2) Addressee (same as unmodified)
3) Introductory paragraph

Answer 1

1) Title
- Must say that auditor’s report is “independent”
2) Addressee
- Addressed to the board of directors or stakeholders, NOT management
3) Introductory paragraph

• statement that the financial statements in the report were audit
• statement that the financial statements are the RESPONSIBILITY of management and the AUDITOR’S RESPONSIBILITY is to express an opinion

Question 2

Define the following in an unqualified opinion for issuer:

4) Scope paragraph

Answer 2

4) Scope paragraph
- statement that the audit was conducted in accordance with standards of the Public Company Accounting Oversight Board
- statement that the audit was PLANNED and PERFORMED to obtain reasonable assurance that the financial statements are free from material misstatement
- statements that the audit included examining evidence on a test basis; assessing the accounting principle used and significant estimates made by management
- statement that the audit provides a reasonable basis for an opinon

Question 3

Define the following in an unqualified opinion for issuer:

4) Opinion paragraph

Answer 3

4) Opinion paragraph
- statement referring to the financial statements specifically identified in the introductory paragraph
- opinion as to the FAIR PRESENTATION of the financial statements
- statement regarding conformity with United States generally accepted accounting principles

Question 4

Define the following in an unqualified opinion for issuer:

Report date

Answer 4

Report date

• report date shows the final date of the auditor’s responsibility

Question 5

Define filing Form AP

Answer 5

Information must be filed by the 35th day after the audit report

OR

Within 10 days if the report is included in a registration statement