AUDIT REPORT Flashcards
What is the purpose of the “Opinion Paragraph” in an audit report?
Auditor’s formal opinion on the fairness and accuracy of the financial statements
What are the different types of opinions an auditor can issue?
Unmodified Opinion (Clean), Qualified Opinion, Adverse Opinion, Disclaimer of Opinion.
What does an Unmodified Opinion indicate?
It indicates that the financial statements present a true and fair view and are free from material misstatements.
What does a Qualified Opinion signify?
It signifies that, except for certain issues, the financial statements are presented fairly with specific limitations or exceptions.
What is an Adverse Opinion?
It states that the financial statements do not present a true and fair view and are materially misstated.
When is a Disclaimer of Opinion issued?
When the auditor is unable to form an opinion due to insufficient information
What is the importance of the “Management’s Responsibility” section in an audit report?
It clarifies management’s accountability for preparing and ensuring the accuracy of the financial statements.
What does the “Management’s Responsibility” section typically include?
Preparation and fair presentation of financial statements, internal controls, and compliance with accounting standards.
What is the purpose of the “Basis for Opinion” section in an audit report?
It explains the foundation on which the auditor’s opinion is based, including audit procedures and standards followed.
What information does the “Basis for Opinion” section provide?
Overview of audit procedures, significant issues encountered, and the standards followed.
What does the “Key Audit Matters” section highlight in an audit report?
It highlights the most significant issues identified during the audit.
