Reporting Flashcards
Adverse Opinion
The opinion expressed when the auditor concludes that the financial statements are materially and pervasively misstated and accordingly are not prepared in accordance with the applicable financial reporting framework
Agreed-upon procedures
an attest engagement in which the CPAs agree to perform procedures for a specified party and to issue a report that is restricted to use by that party (and management)
Audit report on financial statements
a document designed to communicate the nature of the audit, including responsibilities taken, limitations, and a conclusion as to the fairness of presentation of the financial statements
Comparative financial statements
a complete set of financial statements for one or more prior periods included with current year financial statements of the current period
Compliance audit
an audit that emphasizes performing audit procedures to test an organization’s compliance with laws and regulations
Condensed (summary) financial statements
historical financial information that is derived from the financial statements but contains less detail, while still providing a structured representation consistent with the financial statements
Consistency
the concept of using the same accounting principels from year to year so that the successive financial statements issued by a business entity will be comparable
Continuing accountant
an accountant who has been engaged to report on the financial statements of a specific entity
date of the auditor’s report
a date no earlier than the date on which the auditor has obtained sufficient appropriate audit evidence, including evidence that the audit documentation has been reviewed
date of the financial statements
the date of the end of the latest period covered by the financial statements
Disclaimer of opinion
an auditor’s conclusion in an audit report that he or she is unable to form an opinion on whether the financial statements are prepared in accordance with the applicable financial reporting framework (usually GAAP). usually due to lack of sufficient appropriate audit evidence or uncertainties, including going concern uncertainties.
Emphasis-of-matter paragraph
a paragraph included in the auditor’s report that is required by GAAS, or is included at the auditor’s discretion, and that refers to a matter appropriately presented or disclosed in the financial statement that, in the auditor’s professional judgment, is of such importance that it is fundamental to users’ understanding of the financial statements
Examination
an attest engagement designed to provide the highest level of assurance that CPAs provide on an assertion. An examination of financial statements is referred to as an audit
Explanatory paragraph
for a public company, a paragraph inserted in an audit report in which the auditors describe the reasons for giving a report other than a standard report
General-purpose framework
a financial reporting framework designed to meet the common financial information needs of a wide range of users
Integrated audit
as required by the Sarbanes-Oxley Act and the Public Company Accounting Oversight Board, an audit that includes providing assurance on both the financial statements and internal control over financial reporting. Integrated audits are required of large publicly traded companies in the United States.
Letter for underwriter
a letter issued by the independent auditors to the underwriters of securities registered with the SEC under the Securities Act of 1933. Letters for underwriters deal with matters such as the auditor’s independence and the compliance of unaudited data with requirements of the SEC. These letters are also referred to as “comfort letters.”
Negative assurance
a conclusion by CPAs that, after applying limited investigative techniques to certain information, they are not aware of the need to modify the presentation of the information. equivalent to limited assurance.
Other-matter paragraph
a paragraph included in the auditor’s report that is required by GAAS, or is included at the auditors discretion, and that refers to a matter other than those presented or disclosed in the financial statements that, in the auditor’s professional judgement is relevant to users’ understanding the audit, the auditor responsibilities or the auditor’s opinion.
Special Report
an auditors’ report issued on any of the following:
- financial statements prepared on a comprehensive basis of accounting other than GAAP
- elements of financial statements
- compliance with regulatory or contractual requirements
- financial presentations to comply with contractual agreements or regulatory provisions
- audited information presented in prescribed forms
Standard audit report
the wording of an unqualified audit report that includes no modifications for matters such as substantial doubt about going concern status, a change in accounting principle, emphasis of a matter described in the financial statements, or a shared responsibility opinion.
