Reports

Question 1

Audit Report

Answer 1

A document issued by an auditor as a result of an audit, expressing an opinion regarding the fairness of the financial statements taken as a whole.

Question 2

Audit Report

Answer 2

A document issued by an auditor as a result of an audit, expressing an opinion regarding the fairness of the financial statements taken as a whole.

Question 3

Management Responsibility Section

Answer 3

The section of a nonissuer’s audit report that indicates management’s responsibility for:
Preparation and fair presentation of the financial statements in accordance with the applicable financial reporting framework (AFRF)
Design, Implementation, and Maintenance (DIM) of internal control relevant to financial reporting
Evaluation of the entitiy’s ability to continue as a going concern, if required by the AFRF

Question 4

Management Responsibility Section

Answer 4

The section of a nonissuer’s audit report that indicates management’s responsibility for:
Preparation and fair presentation of the financial statements in accordance with the applicable financial reporting framework (AFRF)
Design, Implementation, and Maintenance (DIM) of internal control relevant to financial reporting
Evaluation of the entitiy’s ability to continue as a going concern, if required by the AFRF

Question 5

Opinion Paragraph

Answer 5

The first section of an audit report, stating the auditor’s opinion as to whether or not the financial statements are fairly presented in accordance with the applicable financial reporting framework.

Question 6

Opinion Paragraph

Answer 6

The first section of an audit report, stating the auditor’s opinion as to whether or not the financial statements are fairly presented in accordance with the applicable financial reporting framework.

Question 7

Unmodified (Unqualified) Opinion

Answer 7

A “standard” or “clean” audit report with an opinion paragraph that indicates that the financial statements are fairly presented in accordance with the applicable financial reporting framework.

Question 8

Unmodified (Unqualified) Opinion

Answer 8

A “standard” or “clean” audit report with an opinion paragraph that indicates that the financial statements are fairly presented in accordance with the applicable financial reporting framework.

Question 9

Emphasis-of-Matter Paragraph

Answer 9

A paragraph in the audit report of a nonissuer that communicates matters that are of such importance that they are fundamental to the users’ understanding of the
financial statements. An emphasis-of-matter paragraph is appropriate when the client has properly accounted for and disclosed the item, but the auditor is concerned users might miss the information provided by the client.

Question 10

Other-Matter Paragraph

Answer 10

A paragraph that is added to the audit report of a nonissuer to communicate matters that are not otherwise reported or disclosed in the financial statements, but are relevant to users’ understanding of the audit, the auditor’s responsibilities, or the auditor’s report.

Question 11

Other-Matter Paragraph

Answer 11

A paragraph that is added to the audit report of a nonissuer to communicate matters that are not otherwise reported or disclosed in the financial statements, but are relevant to users’ understanding of the audit, the auditor’s responsibilities, or the auditor’s report.

Question 12

Modified Opinion

Answer 12

An opinion other than an unmodified (unqualified) opinion, which may be a qualified opinion, an adverse opinion, or a disclaimer of opinion.

Question 13

Qualified Opinion

Answer 13

A modification to the auditor’s report included when the auditor is satisfied that the financial statements are not materially misstated as a whole (not pervasive) but either, upon obtaining sufficient appropriate audit evidence, the auditor concludes that the financial statements include a material misstatement; or the auditor is unable to obtain sufficient appropriate audit evidence regarding a matter that is material to the financial statements.

Question 14

Adverse Opinion

Answer 14

An audit report stating that the financial statements are not presented fairly, issued when, based on obtaining sufficient appropriate audit evidence, the auditor concludes that the financial statements contain material misstatements that are pervasive to the financial statements as a whole.

Question 15

Disclaimer of Opinion

Answer 15

An audit report stating that an opinion cannot be expressed, issued when the auditor is unable to obtain sufficient appropriate audit evidence to draw a conclusion as to whether the financial statements are fairly presented in accordance with the applicable financial reporting framework.

Question 16

Going Concern Doubt

Answer 16

A concern about the entity’s ability to continue as a going concern for at least one year from the F/S issue date. Such concerns are required to be disclosed in the notes to the financial statements and reported in a separate section of the report, which is required to be titled ”Substantial Doubt About the Entity’s Ability to Continue as a Going Concern.”

Question 17

Scope Limitation

Answer 17

Circumstances (whether imposed by the client or not) that impede the auditor’s ability to obtain sufficient appropriate audit evidence needed to express an opinion.

Question 18

Scope Limitation

Answer 18

Circumstances (whether imposed by the client or not) that impede the auditor’s ability to obtain sufficient appropriate audit evidence needed to express an opinion.

Question 19

Comparative Financial Statements

Answer 19

Financial statements of the same entity presented with columns for the current period and for one or more prior periods, enabling users to compare financial position and results of operations from one period to the next.