Audit Opinions Flashcards
Auditor Agrees with specialist approach
Auditor Disagrees with Specialist approach
unmodified and no reference
adverse/qualified opinion and makes reference to specialist
Disclaimer is likely but less possible
Validity
Limit
is consistent with documents on hand
does not allow for inappropriate entry in number
Auditor notes material weakness in IC and the cost benefit exceeds the benefit
Auditors opinion
Adverse on effectiveness of IC
Disclaimer in the last paragraph of the report in regards to cost benefit
Opinion on IC
issuer
nonissuer
Issuer must make a public statement
Non-issuer must RESTRICT THE REPORT
Communication w/ management on IC
NON-ISSUER
RECOMMENDATION FOR REMEDIES
only SIGNIFICANT DEF. & MATERIAL WEAKNESS IN WRITING
NON-ISSUER AUDITOR MUST ALSO INCLUDE THE PURPOSE OF REPORT IS NOT TO TEST IC
NOT INCLUDED
DISAGREEMENTS NEVER HAVE TO BE EXPLAINED to audit comitee FOR
PRELIMINARY OR INCOMPLETE ITEMS
MATERIALLY RELATED CRITERIA
Subsequent events - topic discussed with management
HOWEVER SENSITIVE ESTIMATES ARE IMPORTANT
IC adverse opinion
MATERIAL WEAKNESS
NOTE FINANCIAL STATEMENT MISSTATEMENT HAVE NOTHING TO DO WITH IC
IC WEAKNESS THAT MANAGEMENT REFUSES TO CORRECT
Does not require any additional explanation paragraphs in the auditors report
emphasis of matter paragraph
going concern item after the report that may effect the entities ability as a going concern
rep letter for comparative F/S
all periods covered in the report
pro forma
good for subsequent events
can be included in the notes to financial statements
resignation of lawyer
undisclosed claims is the reason why the lawyer resigned
change in report from audit to review
no reference to prior report
no reference to change in scope
as long as reasonable
