Glossary

Question 1

Adverse opinion

Answer 1

The subject matter taken as a whole is misleading or of little use to the addressee of the auditor’s report. This type of opinion will be expressed when the effects of a disagreement with management or conflict with an accepted framework are material and pervasive to the subject matter

Question 2

Disclaimer of opinion

Answer 2

The auditor is unable to express an opinion on the subject matter as a whole. This may occur if a scope limitation exists, where sufficient appropriate audit evidence cannot be reasonably obtained and the possible effects of any adjustments might be material and pervasive to the subject matter.

Question 3

Material inconsistencies

Answer 3

When other information contradicts information contained in the audited financial report.

Question 4

Material misstatements of fact

Answer 4

Misstatement of fact in other information exists when such information, not related to matters appearing in the audited financial report, is incorrectly stated or presented.

Question 5

Materiality

Answer 5

Information which if omitted, misstated or not disclosed separately has the potential to adversely affect decisions about the allocation of scarce resources made by users of the financial report or the discharge of accountability by the management including the governing body of the entity.

Question 6

Other Matter paragraph

Answer 6

paragraph included in the auditor’s report that refers to a matter other than those presented or disclosed in the financial report that, in the auditor’s judgment, is relevant to users’ understanding of the audit, the auditor’s responsibilities or the auditor’s report.

Question 7

Other reporting requirements

Answer 7

Instances where the auditor is required to report on other matters that are additional to their responsibility to express an opinion on the financial report. These other reporting requirements are included in a separate section of the auditor’s report that follows the opinion paragraph.

Question 8

Pervasive

Answer 8

A term used, in the context of misstatements, to describe the effects on the financial report of misstatements or the possible effects on the financial report of misstatements, if any, that are not confined to specific elements, accounts or items of the financial report.

Question 9

Presents fairly

Answer 9

See True and fair view/Presents fairly.

Question 10

qualified opinion

Answer 10

A qualified opinion indicates that certain circumstances exist, which in the auditor’s
opinion are material or are likely to be material; however, they are not so material or so pervasive as to affect the subject matter as a whole.

Question 11

Unmodified auditor’s reports

Answer 11

These are standard unmodified reports , containing standard unmodified opinions and no additional explanatory information.