Unmodified/Unqualified Opinion A1 M4

Question 1

What is the earliest an Audit Report can be dated?

Answer 1

When ALL appropriate, sufficient audit evidence has been obtained.

Question 2

What are the key words or points to recognized in a Non-issuer Opinion Report?

Answer 2

Title: “Independent Auditor”.

Opinion Paragraph: “The Nature of the Engagement and Specific Financial Statements covered under GAAP, name of the entity being audited, and the dates covered by the financial statements.

Basis For Opinion: Reference GAAS, Auditor’s Independence, and states rather or not the auditor believes it has obtained sufficient and appropriate evidence to provide basis for the opinion

Emphasis of the Matter or Other Matter Paragraph: are used when required by law and SAS’s or if the Auditor feels it should reference something already presented publicly or already disclosed in the financials, (or subsequent event changed the opinion).

“GAAP” is in the Opinion and Managers Responsibility Paragraph.

“GAAS” is in the Basis for Opinion and Auditor’s paragraph.

Auditor’s Responsibility Paragraph: Explicitly states that an audit involves identifying and assessing the risk of material misstatement and designing and performing audit procedures responsive to those risk.

Signature

Question 3

How does Auditor report on comparative financials when a Predecessor Auditor report is not issued?

Answer 3

• The auditor would express an unmodified opinion with emphasis of the matter Paragraph that explains:
  -the type of report issued
  -the date of report
  -that it was audited by a predecessor auditor.
• If the Emphasis-of-the-Matter (EOM) was previously issued or opinion was modified than add other-matter-paragraph to explain why.

Question 4

What are the key words in an Audit Report for a issuer?

Answer 4

• Refer to GAAP in the Opinion on the Financial Statements section.
• An auditor reporting on the audit of financial statements of an issuer should indicate in the Basis for Opinion section that **the engagement was conducted in accordance with PCAOB standards.

Question 5

Which paragraphs in the Auditing Reports refer to U.S. GAAP and U.S. GAAS for the non-issuer?

Answer 5

• Reference GAAP in the Opinion and Management’s Responsibility section
• Reference GAAS in the Basis for Opinion and Auditor’s Responsibility sections

Question 6

What are the elements in Critical audit Matters (CAM’s) paragraph for issuer? IPAD

Answer 6

I dentify the CAM
P rincipal reasons for the CAM
A ddressed (how was it addressed)
D isclosures (referenced)

Question 7

What does “consistency is implied” mean?

Answer 7

The consistency standard refers to changes in application of accounting practices between periods, affecting the comparability of financial statements must be included in emphasis of the matter paragraph since consistency is implied.