Overview of the auditors report

Question 1

Unqualified report/Unmodified report needs to include:

Answer 1

Title: Independent Auditor’s Report

Addressed to: The Board of directors and shareholders (Usually to this group, but has to be addressed to someone)

Three Paragraphs:
- Intro: Identifies the F/S which the auditors associated, responsibility of management and auditors

• Scope: Standards that govern the auditors work and communicates what an audit consists of, and belief that the auditors provide a reasonable basis for opinion
• Opinion: State the opinion of the

Needs to signed by the engagement parts

Date

Question 2

What is current unmodified report introduction paragraph consist of?

Answer 2

Introduction paragraph:
- We have audited the accompanying financial statements of XYZ Company, which comprise the balance sheet as of December 31, XX and XX, and the related income statements, changes in stockholders equity, and cash flows for the years ended XX, and the related notes to the financial statements

Question 3

Standard of unmodified report management responsibility paragraph consists of?

Answer 3

Management is responsible for preparation and fair presentation

accordance with GAAP, this includes the design, implementation, and maintenance of internal control relevant to the preparation and fair presentation of financial statements that are free from material misstatement, whether due to fraud or error

Question 4

What is the section in the unmodified report for auditor responsibility? What are the three sections?

Answer 4

Auditors responsibility:

1) Express an opinion on our auditS (plural)
2) We conducted our audits in a accordance with auditing standards generally accepted in United States
3) Those standards require that we PLAN and PERFORM the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement.

Auditors responsibility (Second and Third Paragraph)

4) audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements
5) The procedures selected depend on the auditor’s judgements, including assessment of the risks of material misstatements of the financial statements whether due to fraud or error
6) Auditors consider internal control relevant to the preparation and fair presentation of financial statements
7) Accordingly we issue no such opinion
8) An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by management, as well as evaluating the overall presentation of the financial statements
9) We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.
10) In our opinion, the F/S referred to above….

Question 5

Review question: An auditors responsibility to express an opinion on the financial statements is:

A) Implicitly represented in the auditors unmodified report

B) Explicitly represented in the opening paragraph to the auditors unmodified report

C) Explicitly represented in the auditor’s responsibility paragraph of the auditor’s unmodified report

D) Explicitly represented in the opinion paragraph of the auditor’s unmodified report

Answer 5

C

Previously it would have been in the opening paragraph