Rpts on Audited FS Flashcards
Unmodified Opinion =
clean opinion
Unmodified Opinion report headings
- Title
- Addressee
- Introductory Paragraph
- Managements Responsibility
- Auditor’s Responsibility
- Auditor’s Opinion
- Other Reporting responsibilities
- Signature of Auditor
- Auditors address
- Date of the Auditors Report
Managements Responsibility
(MR DIM)
Managements
Responsibility
Design
Implementation
Maintenance
Auditors Responsibility
(REPPORTS CRAME) Responsibilities of Auditor Express an opinion Plan and perform audit Performing procedures Obtain audit evidence Risk of material misstatement Test of internal controls Statements, financial fair presentation
Control effectiveness Reasonableness of significant Accounting estimates made by Management Evaluating overall presentation
The auditors report date shows
the final date of the auditors responsibility
GAAS is in the
Scope Paragraph (auditors responsibility)
GAAP is in the
Opinion Paragraph
Types of Opinions
- Unmodified
- Qualified
- Adverse (GAAP)
- Disclaimer (GAAS)
Emphasis - of - Matter paragraph is presented
After the opinion, but before other reporting matters
Emphasis of Matter paragraph is required when
- Going Concern
- Justified chg in acting principle
- Chg in audit opinion
- Special Purpose framework used
Other reporting matter paragraph is required when
- Auditor restricts use of report
- chg in audit opinion
- fs audited by predecessor not reissued
- material inconsistency
- report on supplementary info
- restrict the use, special purpose framework
- compliance report
Use the emphasis of matter paragraph to
report on matter that is presented or disclosed properly but is fundamental to the users understanding
Use the other reporting matters paragraph to
report on matters other than what is presented or disclosed but is important
Qualified “except for” GAAP
- Accting policy
- Presentation
- Disclosures
- Estimates
Qualified “except for” GAAS
- Insufficient evidence
Adverse GAAP
- Accting policy
- Presentation
- Disclosures
- Estimates
Disclaimer GAAS
- Insufficient evidence
- Siginificant going concern uncertainty
- Lack of independance
Withdraw
False, Fraudulent, Deceptive, Misleading
Going Concern Procedures
(ADMITS) Analytical procedures Debt compliance Minutes Inquiry of clients legal counsel Third parties Subsequent events
Going Concern Conditions and Events
(FINE) Financial difficulties Internal Matters Negative trends External matters
When a qualified opinion is issued due to lack of sufficient evidence, the lack of evidence should be disclosed in the
Auditors Responsibility paragraph
In a report qualified for inadequate disclosure, the auditor would add
a paragraph titled Basis for Qualified Opinion preceding the Opinion paragraph and modified the Opinion paragraph by adding an “except for……” statement
Scope limitations caused by inadequate records would cause the auditor to choose between issuing a
Disclaimer or opinion and a qualified opinion
Terms required in the explanatory paragraph for going concern is
- Substantial doubt
- Going Concern
The introductory paragraph should include
- Entity who is being audited
- a statement that the FS were audited
- Title of each FS audited
- Dates or periods covered by each FS
What is the going concern period for (1) us gaap and (2) ISA
US - should not exceed one year
ISA - may be greater than or equal to one year
