audit opinion Flashcards
what is the audit opinion if going concern is
1) adequately disclosed
2) not adequately disclosed
The audit opinion may be unmodified, qualified, or adverse, depending on the adequacy of disclosure made by management.
1) If there is adequate disclosure, the auditors should express an unmodified opinion and include a Material Uncertainty Related to Going Concern section.
2) If there is inadequate disclosure, auditors should express a qualified or adverse opinion, depending on the level of disclosure made.
if the Financial statements are materially misstated
what are the types of opinions that can be given
If material and pervasive
*Adverse opinion “ Does not show a true and fair view”
If material and NOT pervasive
* Qualified with an except for
If Auditor unable to obtain sufficient appropriate evidence
what are the types of opinions that can be given
If material and pervasive
*Disclaimer of opinion “ We are unable to form an opinion”
If material and NOT pervasive
* Qualified with an except for
What does a modified report mean
Modified report (Changing the standard wording)
What things could be added in a modified report
1) Other matters
2) Material uncertainty relating to going concern
3) Emphasis of matter
what is other matters
Anything that auditor’s want to flag:
E.g. flag that this years auditors were not the previous years auditors
E.g. they were unaudited in previous year
E.g. other information in an annual report (e.g. strategic review of the performance of co. / Chairman’s report)
The auditor needs to read it and look for inconsistencies or error in fig compared to the acc’s (Cannot be contradicting each other)
Other matters section is used to say that the accounts are correct but the other information in the report is not
what is Material uncertainty relating to going concern
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