AUD, A1 M1-M6 Flashcards
What auditing standard/guideline do non-issuers use?
AICPA Statements on Auditing Standards (SAS)
What auditing standard/guideline do issuers use?
PCAOB Auditing Standards
What auditing standard/guideline do governmental organizations use?
Generally Accepted Government Auditing Standards (GAGAS) AND GAAS (must use both)
What is another name for non-issuers?
private companies
What is another name for issuers?
public companies
What two things constitute GAAS (Generally Accepted Auditing Standards)?
AICPA SAS and PCAOB AS
What are the three items in the GAAS hierarchy and what order?
- AICPA SAS and PCAOB AS
- Interpretive Publications
- Other Auditing Publications
With the most authoritative literature, what does the auditor need to use?
professional judgement
If something says ‘must’ or ‘is required’, how should an auditor interpret that?
unconditional requirement that needs to be met
If something says ‘should’, how should an auditor interpret that?
presumptively mandatory requirement
If an auditor ‘should’ do something, can they stray from that?
only if they can justify why they did not follow it
If something says ‘may’ or ‘might’ or ‘could’, how should an auditor interpret that?
just a recommendation/suggestion
What are interpretive publications (conceptually)?
recommendations for how auditing standards should be applied
What are two examples of interpretive publications?
(1) AICPA Audit and Accounting Guides
(2) Auditing Statements of Position
What are included in other auditing publications?
Journal of Accountancy, professional journals, textbooks, CPE courses
What level of authority do other auditing publications have?
None, but they might be helpful.
What are the five steps in the audit process?
- Engagement Acceptance
- Assess Risk and Plan Response
- Perform procedures and obtain evidence
- Form Conclusions
- Report
What is the main purpose of an audit?
(1) to provide an opinion
(2) on whether the financial statements are presented fairly
(3) in all material aspects
(4) in accordance with the applicable financial reporting framework
What is the key thing that an audit report does: give _________ to the financial statements?
credibility
Does an auditor’s unqualified opinion mean that you should invest in that company?
No, just that you can rely on the information given.
What are the three management responsibilities?
(1) preparation and fair presentation of financial statements in accordance with the applicable financial accounting framework
(2) design, implementation, and maintenance of internal control relevant to the financials
(3) providing the auditor with access to information and persons within the entity needed to complete the audit
What is the main responsibility of the auditor?
to provide an opinion on the financials based on their audit
What are the other five responsibilities of an auditor?
(1) maintain professional skepticism
(2) exercise professional judgement
(3) obtain sufficient and appropriate evidence
(4) comply with ethical requirements
(5) complying with GAAS
What three-word phrase summarizes professional skepticism?
Trust, but verify.
What other term summarizes what professional skepticism is?
having a questioning mind
What types of things should auditors be alert for (when exercising professional skepticism)?
- contradictory audit evidence
- information that calls into question the reliability of documents
- conditions that indicate fraud
- circumstances that suggest need for additional audit procedures
- evidence that changes the initial risks identified
What four things are impediments to applying professional skepticism?
(1) unconscious human bias
(2) developing too much trust in management
(3) avoiding negative interactions
(4) workload demands
What is a key ethical requirement that needs to be met?
independence in fact and appearance
What three sources do ethical requirements come from?
- AICPA Code of Conduct
- rules of state boards
- applicable regulatory agencies
When does professional judgement need to be exercised?
(1) interpreting standards, and
(2) making informed decisions based on knowledge and experience
What two words are used to describe evidence collected?
sufficient, appropriate
What does collecting sufficient appropriate evidence allow you to do (2 things)?
(1) reduce audit risk to an acceptably low level, AND
(2) draw conclusions for the opinion
GAAS provides a set of guidelines for _______, ________, and _____ on audit engagements.
planning, performing, reporting
T/F: The auditor may conduct the audit in accordance with either GAAS or auditing standards issued by the PCAOB, but not both.
False. They can conduct an audit with both.
T/F: The auditor may be required to comply with International Standards on Auditing in addition to GAAS even if the audit is conducted in the U.S.A.
True.
Can you apply more than one set of auditing standards along with GAAS?
Yes.
What level of assurance needs to be met in order to express an opinion in an audit?
reasonable assurance
Reasonable assurance is a __________, but not __________ level of assurance.
high, absolute
What three inherent limitations make it impossible to obtain absolute assurance?
(1) nature of financial reporting (ex: estimates, subjective decisions)
(2) nature of audit procedures (ex: management might conceal activity)
(3) timeliness of financial reporting & balance between cost and benefit (ex: taking a sample)
T/F: The auditor is responsible for reviewing all evidence and information.
False. Because of constraints, they may only be able to take a sample.
What first step should the auditor take if they are asked to review financial statements covering multiple years?
consider whether the comparative information for the prior period meets the requirements of the applicable financial reporting framework
What are the options for types of audits a non-issuer might receive?
(1) Financial Statement Audit only (one opinion)
(2) Integrated Audit (two opinions)
What are the two opinions in an integrated audit?
(1) fairness of the financial statements
(2) operating effectiveness of internal controls over financial reporting
What are the options for types of audits an issuer might receive?
must perform an integrated audit (two opinions)
What is the objective of a financial statement audit?
to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to error or fraud, which enables the auditor to express an opinion on whether the financial statements are presented fairly, in all material respects, in accordance with an applicable financial reporting framework
What is the objective of an audit of internal control?
(1) express opinion on effectiveness of internal control over financial reporting, AND
(2) obtain appropriate evidence that is sufficient to obtain reasonable assurance about whether material weaknesses exist as of the date specified in management’s assessment.
What two things are needed in order to form an audit opinion?
(1) sufficient appropriate audit evidence was obtained
(2) financial statements are fairly stated, in all material respects, in accordance with requirements of the applicable financial reporting framework
What is included in the ‘financial statements’?
The complete set of general purpose financial statements, including the footnotes!
What are three of the financial reporting frameworks that management could select?
Cash Basis, Tax Basis, GAAP
What question is an auditor trying to answer with respect to the financial statement framework chosen?
Was it followed? Does it achieve fair presentation?
What is the best opinion issued for a non-issuer?
Unmodified
What is the best opinion issued for an issuer?
Unqualified
What three things are true when an auditor issues a unmodified (unqualified) opinion?
(1) sufficient appropriate audit evidence obtained,
(2) any uncorrected misstatements are not material or pervasive, AND
(3) financials are prepared in accordance with the applicable financial reporting framework
What statement does the opinion say when you have an unqualified/unmodified opinion?
Financial statements are presented fairly, in all material respects, in accordance with the applicable financial reporting framework.
What two things give rise to a modified opinion?
(1) Audit Issue: unable to obtain sufficient appropriate audit evidence to conclude whether financials are free from material misstatement, OR
(2) Financial Statement Issue: financials are materially misstated
What are the three types of modified opinions?
(1) Disclaimer
(2) Qualified
(3) Adverse
When do auditors issue a qualified opinion due to audit issues?
(1) unable to obtain sufficient appropriate audit evidence, AND
(2) possible effect of the matter is material, but not pervasive
When do auditors issue a disclaimer of opinion?
(1) unable to obtain sufficient appropriate audit evidence, AND
(2) possible effect of the matter is material AND pervasive
When do auditors issue a qualified opinion due to financial statement issues?
(1) able to gather sufficient audit evidence, AND
(2) financials contain material, but not pervasive misstatements
When do auditors issue an adverse opinion due to financial statement issues?
(1) able to gather sufficient audit evidence, AND
(2) financials contain material AND pervasive misstatements
What is the key phrase for adverse opinions?
do not present fairly
What is the meaning of pervasive in the context of multiple accounts?
far reaching effect across multiple accounts
What is the meaning of pervasive in the context of a single account (2 OR criteria)?
(1) represents significant portion of the financials, OR
(2) issues with disclosures that are fundamental to the user’s understanding
What is the mnemonic for the required sections of an unmodified audit report for non-issuers?
OBRA
What do each of the letters in the OBRA acronym stand for?
Opinion
Basis for Opinion
Responsibility of Management for the Financial Statements
Auditor’s Responsibility for Audit of the Financial Statements
What is included in the Opinion section of an unmodified report for non-issuers?
- Company Name
- Dates Covered
- Financial Statements Covered
- Opinion: Fairly presents..
- Applicable financial reporting framework
- Country of origin for framework
What is included in the Basis of Opinion section of an unmodified report for non-issuers?
- Auditing Standards Used
- State that further responsibilities are written in the Auditor’s Responsibility Section
- Independence requirement for ethical requirements
- Audit evidence is sufficient and appropriate to base opinion on
What is included in the Management’s Responsibility section of an unmodified report for non-issuers?
- Preparation and fair presentation of financial statements according to framework
- Design, implementation, and maintenance of internal control relevant to fair presentation free of material misstatement, whether due to error or fraud
- (Optional, depending on whether the framework requires this from management) Required to assess whether there is substantial doubt about ability to continue as a going concern
What is included in the first paragraph of the Auditor’s Responsibility section (unmodified opinion, non-issuer)?
- Obtain reasonable assurance & issue opinion
- Reasonable assurance is not absolute
- Higher risk of misstatements with fraud
- Materiality definition
What is included in the second paragraph of the Auditor’s Responsibility section (unmodified opinion, non-issuer)?
GAAS (or Auditing Std) Requirements
Professional judgement and skepticism
Assess risks, design and perform procedures around that
Understand internal control, not expressing opinion on it (if not auditing it)
Evaluate policies and estimates used
Evaluate presentation of financials
Conclude whether there is substantial doubt about ability to continue as a going concern
Communicate with the board
In which sections of unmodified non-issuer report is GAAP (or the applicable financial reporting framework) mentioned?
Opinion
Management’s Responsibility
In which sections of unmodified non-issuer report is GAAS (or the applicable auditing standard) mentioned?
Basis for Opinion
Auditor’s Responsibility
Which section must come first (unmodified non-issuer report)?
Opinion
Which section must come second (unmodified non-issuer report)?
Basis for Opinion
Where does the Management’s Responsibility section go (unmodified non-issuer report)?
anywhere after the second section
Where does the Auditor’s Responsibility section go (unmodified non-issuer report)?
anywhere after the second section
Why is important to provide the country of origin when mentioning that you use generally accepting accounting principles?
multiple countries have their own version of GAAP
When does the responsibility of management section include going concern information?
when management has this responsibility under the financial reporting framework used
Does management have a responsibility to determine going concern issues under GAAP?
Yes
When does the auditor have going concern assessment responsibility?
Always
What is the title of the report for unmodified non-issuer?
Independent Auditor’s Report
Who is the appropriate addressee in the report for a non-issuer?
whoever engaged the auditor, usually the board
What information is included at the end of the audit report (unmodified non-issuer)?
- name of firm
- signature
- address
- date of report
What is the earliest possible date of the report?
when sufficient and appropriate audit evidence was collected
What two scenarios give rise to using two sets of auditing standards?
(1) required, OR
(2) engaged by the client to do so
What changes about the report when you have two standards used for auditing?
mention both sets of standards used in the Basis of Opinion and Auditor Responsibility sections
If an auditor uses PCAOB standards but they are not required to (non-issuer), what changes about the report?
- use the PCAOB report format for issuers
- follow GAAS and PCAOB
- disclose that both were used
When are Key Audit Matters added to the non-issuer report?
when the client engages the audit team to do so
What is the benefit of KAMs and CAMs?
provides more visibility into the audit, especially because it is mostly boilerplate information
From which pool of topics are KAMs selected to be reported?
matters communicated with the board or supposed to be communicated with the board
How do you choose which KAMs are most important to report?
- riskier areas (higher risk of misstatement)
- significant judgement and estimates
- significant transactions/events
Where does the KAMs section go?
anywhere after the second section
What is reported in the KAMs section?
- definition of KAMs
- listing of KAMs and description
Is it possible to have no KAMs? If so, what is the treatment?
Yes. State that there were none.
KAMs should not be reported about matters that give rise to what two things? What is the rationale?
(1) qualified opinion
(2) substantial doubt about ability to continue as going concern
These items are explained elsewhere in the report.
Communicating KAMs is prohibited when?
auditor expresses an adverse opinion or disclaims (red zones)
What is the difference in the wording for the opinion section for an issuer and non-issuer (assume unqualified/unmodified)? What is the rationale here?
Issuer: Opinion on the Financial Statements
Non-Issuer: Opinion
Issuer clarifies that it is the opinion on the FS, because they have an integrated audit for their internal controls as well.
What are the three key sections of the unqualified opinion report for an issuer?
Opinion on the Financial Statements
Basis for Opinion
Critical Audit Matters
Who are the addressees in a report for an issuer?
shareholders and the board
Who is never the addressee of an audit report?
management
What is the opinion on the Financial Statements for a non-issuer?
Opinion
What are the three key sections of the unqualified opinion report for an issuer?
Opinion on the Financial Statements, Basis for Opinion, Critical Audit Matters
Who are the addressees in a report for an issuer?
Shareholders and the board
Who is never the addressee of an audit report?
Management
What is the same and different about the opinion section for an issuer (unqualified) versus a non-issuer (unmodified)?
Opinion section is the same
What is included in the Basis for Opinion section for an issuer (unqualified), first paragraph only?
Management has responsibility for financials. Auditor’s responsibility is to express opinion. Public Accounting Firm registered with the PCAOB. Independence
What is included in the Basis for Opinion section for an issuer (unqualified), second paragraph only?
Auditing Standards Used - PCAOB. Obtain reasonable assurance. Assess risks, design and perform procedures around that. Examine evidence on test basis. Evaluate estimates and principles used, as well as presentation of financials. Audits provide reasonable basis for opinion.
What is included in the Critical Audit Matters section for an issuer (unqualified), second paragraph only?
Definition of CAMs. Not expressing separate opinions on CAM items. Listing of CAM items.
What is the definition of a CAM?
- Communicated or supposed to be communicated to audit committee,
- Relate to accounts/disclosures that are material, AND
- Involve challenging, subjective, or complex judgements
What is the title of the report for an issuer?
Report of Independent Registered Public Accounting Firm
What is different about the end of the report for an issuer?
Must include the tenure (how long you have had that auditor)
Where in the overall financial statements does the auditor’s report appear?
Before the financial statements and footnotes
Where is the financial reporting framework discussed in an issuer’s audit report?
Opinion only
Where is the auditing standards used discussed in an issuer’s audit report?
Basis for Opinion only
Where can the CAM section appear in the auditor report?
Anywhere after the second section (Basis of Opinion)
What if no CAMs are identified? Do you still need the CAMs section of the report?
Yes. Discuss the definition and then that you did not find any CAMs.
Normally, issuers are required to have an integrated audit. What is the exception to this?
If there is a small reporting company (less than 100M in revenues), it only needs a financial statement audit.
How is the auditor’s report edited for a small reporting company?
Basis of Opinion states that: (1) Not required to have internal controls audit (2) Auditor obtained understanding of internal control only (3) No opinion expressed on internal controls
Which two groups of issues require an integrated audit?
Large Accelerated & Accelerated Filers
What does Form AP do?
Provide visibility into audit participants
Who files the Form AP? Where is it filed?
Filed BY the auditor of an issuer. Filed TO the PCAOB for each audit report
What six elements does a Form AP contain?
- Name of Issuer
- Name of Firm
- Name of Engagement Partner
- Date of Audit Report
- End Date of Financials
- Participation of Other Firms
How long does the firm have to file the Form AP? What is the exception to this rule?
35 days after the audit report is filed with the SEC. If audit report is included in a registration statement, 10 days.
If responsibility of the work is divided, does another firm mentioned as a participant have to file a separate Form AP?
No, they do not have to file.
Where else can the auditor include the information provided on the Form AP?
Within their audit report
If the information is provided, what type of statement needs to be made if they decide that the responsibility of work is fully on that firm and not divided among the other participating firms?
(1) Auditor is responsible for their work,
(2) Auditor supervised their work, AND
(3) % of audit hours done by the other firms
If the information is provided, what type of statement needs to be made if they decide that the responsibility of work is divided among the other participating firms?
Name of Other Firms, Address, and Magnitude of Their Work Done
If a company does not follow GAAP (or the applicable standard), what two scenarios will allow them to still walk out with an unqualified/unmodified opinion?
(1) Not a material impact, OR
(2) Complying with GAAP would result in financials to be misleading
What types of things give rise to a qualified opinion due to financial statement issues?
(1) Not following GAAP
(2) Inappropriate accounting principles
(3) Unreasonable estimates
(4) Inadequate disclosures
(5) Incorrect numbers
(6) No reasonable justification for change in accounting principles
What type of issue is ‘omitting the statement of cash flows’?
Inadequate disclosure
If the auditor is engaged to review ALL financials, what type of opinion can you give if the client does not want to present the cash flow statement?
Qualified
If the auditor is engaged to review only one part of the financials, what type of opinion can you give if the client does not want to present the cash flow statement?
Unqualified or Unmodified
When you have a qualified opinion, how do the headings for the sections on the non-issuer report change?
Opinion –> Qualified Opinion
Basis for Opinion –> Basis for Qualified Opinion
What changes about the report for a non-issuer’s qualified opinion, for financial statement issues (conceptually)?
(1) Change wording of opinion
(2) Add paragraph in Basis for Qualified Opinion section describing departure from framework
(3) Change wording: Sufficient appropriate evidence for qualified opinion
What is the new wording for a qualified opinion for a non-issuer (FS issue)?
Except for … as described in the Basis for Qualified Opinion section …
How do the responsibilities of management and auditor’s responsibilities sections change in a qualified opinion (FS issues) of a non-issuer?
They do not.
When you have an adverse opinion, how do the headings for the sections on the non-issuer report change?
Opinion –> Adverse Opinion
Basis for Opinion –> Basis for Adverse Opinion
What changes about the report for a non-issuer’s adverse opinion, for financial statement issues (conceptually)?
(1) Change wording of opinion
(2) Add paragraph in Basis for Qualified Opinion section describing departure from framework
(3) Change wording: Sufficient appropriate evidence for adverse opinion
(4) Key audit matters section is removed if auditor engaged for that
Why is the key audit matters section removed when there is an adverse or disclaimer opinion?
This might overshadow the adverse opinion itself.
What is the new wording for an adverse opinion for a non-issuer (FS issue)?
Because of the significance of the matter discussed in the Basis for Adverse Opinion section of the report, … do not present fairly…
How do the headings change in a report for an issuer’s qualified opinion?
They do not.
How do the headings change in a report for an issuer’s adverse opinion?
They do not.
When do headings change in a report for an issuer?
Only for disclaimer of opinion, because there is no opinion given.
What changes about the report for an issuer’s qualified opinion, for financial statement issues (conceptually)?
(1) Change wording of opinion
(2) Add paragraph describing departure from framework and quantify effects if possible
Where does this additional paragraph go for issuer, qualified opinion?
Within the Opinion on the Financial Statements section
How does wording of the opinion change for issuer, qualified opinion?
Except for the effects of… as discussed in the following paragraph … fairly presented
How do you change the wording of an opinion for non-issuer, qualified opinion due to audit issues?
Except for the possible effects of the matter described in the Basis for Qualified Opinion section… presents fairly
How are the basis for opinion and CAM sections of the report different for an issuer, qualified opinion?
They do not change.
What changes about the report for an issuer’s adverse opinion, for financial statement issues (conceptually)?
(1) Change wording of opinion
(2) Add paragraph describing the departure from framework and quantify if possible - after the opinion
(3) Remove CAMs section
How does the wording of the opinion change for an adverse opinion, issuer (financial statement issue)?
Because of the effects of the matter discussed in the following paragraph, the financial statements do not present fairly…
What two types of opinions may come out of audit issues?
Qualified or disclaimer
When do you have a disclaimer of opinion?
Material and pervasive
What are three broad categories of conditions that restrict scope of an audit?
(1) Time constraints,
(2) Inability to obtain sufficient audit evidence,
(3) Refusal of client’s attorney to respond to inquiry
Which three scenarios always result in a disclaimer of opinion?
(1) Auditor is NOT independent,
(2) Unaudited financial statements,
(3) Refusal of management to provide written representation and/or acknowledge responsibility for fair presentation
Limitations on scope of an audit can arise from what two sources?
(1) Circumstances
(2) Management
What is an example of circumstances resulting in scope limitations?
A fire destroys audit records/evidence.
What can the auditor do if circumstances result in scope limitations?
Determine whether it is possible to perform alternative procedures.
What is an example of management resulting in scope limitations?
Management will not give you information.
What is the first thing an auditor should do if management is imposing a scope limitation?
Ask management to remove the limitation.
What is the next thing an auditor should do if management refuses to remove the scope limitation?
Communicate with the board and ask if it is possible to perform alternative procedures.
If the scope limitation from management withholding info can result in a material and pervasive effect, what should the auditor do?
(1) Disclaim - do not give an opinion, OR
(2) Withdraw from the engagement
What two scenarios give rise to financial statement association?
An accountant: (1) Consents to use of their name in connection with financials, OR (2) Prepared financials (even if name not included)
If an auditor is associated and not independent, what should they do?
Disclaim the opinion
What types of information need to be provided if an auditor is not independent but required to issue a report?
Disclaim Opinion - We express no opinion. State they are not independent.
Does an auditor need to provide the reasons they are not independent?
Not necessarily. If they choose to, they need to provide all reasons why (no partial disclosure).
When an auditor disclaims an opinion because they are associated, what three things should they do?
(1) Must read for obvious errors,
(2) Mark each financial statement as ‘unaudited’
(3) Include disclaimer with financial statements or on them directly
How are the reports of a qualified opinion for a non-issuer change when it is qualified due to audit issues?
(1) Change wording of opinion
(2) Add paragraph in Basis for Qualified Opinion describing inability to obtain sufficient appropriate audit evidence
(3) Change wording: Sufficient appropriate evidence for qualified opinion
Do you refer directly to the scope limitations in the opinion sentence for audit issues, qualified opinion for non-issuer?
No!
How do headings change non-issuers with disclaimer?
Opinion –> Disclaimer of Opinion
Basis for Opinion –> Basis for Disclaimer of Opinion
No KAMs Section
If the auditor is able to perform alternative procedures and is satisfied with them, what type of opinion is rendered usually?
Unmodified/unqualified
How do you change the wording of the Opinion section for non-issuer, disclaimer of opinion due to audit issues?
(1) Engaged to audit the FS of X company
(2) Do not express an opinion … Because of the significance of matters described in the Basis for Disclaimer of Opinion section, not able to obtain sufficient appropriate audit evidence
For an issuer, any modification (qualified/adverse/disclaimer) will result in which type of wording: ‘matter described in _______________’?
The following paragraph
For a non-issuer, any modification (qualified/adverse/disclaimer) will result in which type of wording: ‘matter described in _______________’?
The Basis for (Qualified/Adverse/Disclaimer) Opinion Section
What changes about the Basis for Opinion section (disclaimer, non-issuer)?
Only have a paragraph explaining the reasons for the inability to obtain evidence, remove everything else.
What changes about the Responsibility of Management section (disclaimer, non-issuer)?
Nothing!
What changes about the Auditor Responsibility section (disclaimer, non-issuer)?
- Omit everything except the responsibility to provide and opinion and conduct audit in accordance with GAAS
- Independent and Ethical
- Because of matters described in B, not able to obtain sufficient appropriate audit evidence.
What changes about the opinion section of the report for an issuer, qualified due to audit issues?
(1) Change opinion wording
(2) Add paragraph explaining reason for inability to obtain evidence
What changes about the basis for opinion section of the report for an issuer, qualified due to audit issues?
Change wording: Except as discussed above, we conducted audit in accordance PCAOB AS…
How does the wording of an opinion change for an issuer, qualified opinion due to audit issues?
Except for the effects of the adjustments, if any, as might have been determined to be necessary … as described below
Do you discuss the scope limitation in the opinion sentence for an issuer? For a non-issuer?
No and no! Only focus on adjustments (issuer) or potential effects (non-issuer) wording.
How do headings change for issuers with disclaimer opinion?
Opinion –> Disclaimer of Opinion on the Financial Statements
Basis for Opinion –> Basis for Disclaimer of Opinion
No CAMs Section
How does the opinion section change for an issuer with a disclaimer of opinion?
(1) Engaged to audit…
(2) Change wording of opinion
(3) Add paragraph explaining reasons for inability to obtain evidence
How does the wording of an opinion change for issuer, disclaimer of opinion?
Because of the matter described in the following paragraph, unable to obtain sufficient appropriate audit evidence, and express no opinion on the financials.
How does the basis for opinion section change for an issuer with a disclaimer of opinion?
Remove everything except for:
- The management’s responsibility for financials
- Auditor is registered with the PCAOB
- Auditor is independent
How does the CAMs section change for an issuer with a disclaimer of opinion?
There is no CAMs section anymore!
How does the disclaimer of opinion due to lack of independence (not scope limitation) look for an issuer?
- State that not independent
- Company name
- Financials supposed to be audited
- State that did not audit
- State that no opinion expressed
