Chapter 11 Flashcards
standard audit report layour
opinion
basis for opinion
key audit matters
other information
responsibilities of management and those charged with governance
auditors responsibilities for the audit of financial statements
report on other legal and regulatory requirements
signed
who should audit communicate with
those charged with governance, usually directors but can be audit committee. should be determined who at the engagement stage
process for communicating key audit matters in audit report
communicate to SH’s in audit report before reporting them to those charged with governance
3 types of audit report
unmodifed report
modified report with unmodified opinion
modified audit opinions
what is the opinion of an unmodified report
unmodified opinion - “true and fair view”
what is the opinion of a modified report with an unmodified opinion
emphasis of matter
material uncertainty related to going concern
other matter
what opinion for insufficient or inappropriate audit evidence - material but not pervasive
qualified opinion “ except for”
what opinion for insufficient or inappropriate audit evidence - material and pervasive
disclaimer of opinion “ do not express an opinion”
what opinion for a material misstatement - material but not pervasive
qualified opinion “ except for”
what opinion for a material misstatement - material but and pervasive
adverse opinion - “ do not give a true and fair view”
examples of emphasis of matter paragraphs
early application of new standards
if a new audit report is issued
uncertainties of future outcomes for example a court case
when are emphasis of matter paragraphs used
when something has been adequately disclosed, the auditor just wants to bring more attention to it. the paragraph will say where in the FS there is more detail on it
what are other matters for
issues outside the scope of FS
Where do you include modifications of the auditors report due to going concern issues
directly after basis for opinion
three types of modified opinion
a qualified opinion
an adverse opinion
a disclaimer of opinion
definition of pervasive
not confined to specific elements or accounts
if so confined, could represent a substantial portion of the FS
or
are fundamental to users understanding
what circumstances could lead to a modification due to a material misstatement
the appropriateness of selected accounting policies
application of accounting policys ( error or inconsistency)
inappropriate or adequacy of disclosures
examples of inability to provide sufficient evidence
appointment too late for something like stock take
beyond control of entity such as fire
implications of when an auditors opinion is modified
TCWG need to be informed of reason
external consultation with regulators may be necessary
management integrity may need to be questioned
possible withdrawal of engagement
