Overview of Auditor's Report Results

Question 1

GAAS require the auditor’s report to contain either an expression of opinion regarding the financial statements or an assertion to the effect that an opinion cannot be expressed. The objective of this requirement is to prevent

Answer 1

The objective of the requirement is to prevent misinterpretations regarding the degree of responsibility the auditor is assuming when his name is associated with financial statements.

Question 2

How does an auditor make the following representations when issuing the standard auditor’s report on comparative financial statements?

Answer 2

Examination of Evidence: Explicitly

Consistent application of accounting principles: Implicitly

**The standard auditor’s report on comparative financial statements states explicitly that evidence is obtained (and therefore examined) and implies that accounting principles have been consistently applied. Such application is assumed unless the report indicates otherwise.

Question 3

An auditor’s responsibility to express an opinion on the financial statements is

Answer 3

Explicitly represented in the responsibility paragraphs of the auditor’s unmodified report.

Question 4

The auditor makes explicit reference to “auditing standards generally accepted in the United States of America” in which paragraph of the standard unmodified audit report?

Answer 4

Auditor’s Responsibility.