This document discusses key aspects of audit reports, including:
- The auditor's standard report provides an opinion on whether the financial statements are presented fairly and in accordance with GAAP.
- Audit reports typically include opinions on the financial statements themselves (balance sheet, income statement, etc.) and the related disclosures.
- Modifications to the standard report may be needed if certain conditions are present, such as material departures from GAAP or scope limitations.
- The auditor's report for public clients follows specific requirements regarding titles, addresses, references to auditing standards, and inclusion of opinions on internal control over financial reporting.
- The opinion paragraph states the auditor's opinion on whether the financial statements
The document discusses audit evidence, which is information used by an auditor to arrive at conclusions to support the audit opinion. It should be sufficient and appropriate. Sufficiency refers to quantity and appropriateness to quality and relevance. The auditor considers inherent risk, control risk, materiality, and other factors to judge sufficient and appropriate evidence. Evidence comes from tests of controls, substantive procedures, and inquiries. It is used to evaluate financial statement assertions like existence, completeness, and valuation of assets and liabilities.
The document presents an audit report on the true and fair concept in accounting. It defines an audit report as a statement of collected facts that provides clear information to those without full knowledge. An auditor must verify accounts carefully and report whether they accurately present a company's true financial condition according to accounting principles. A true and fair report means accounts follow standards, transactions are properly classified, information is complete, and assets/liabilities are properly valued and reported. The document also distinguishes accounting from auditing and describes types of audit reports.
The document discusses audit documentation and reporting requirements. It defines audit documentation as the principal record of audit procedures applied, evidence obtained, and conclusions reached by the auditor. Audit documentation serves to demonstrate that the audit was performed in accordance with standards and to provide a record of evidence in case it is needed for legal or regulatory proceedings. The document outlines the purpose, ownership, and confidentiality of audit documentation, as well as requirements for its organization, storage, and retention. It also discusses reporting requirements for auditors under the Companies Act regarding matters such as the Companies (Auditor's Report) Order and management explanations for adverse comments.
The document discusses techniques for verifying assets and liabilities during an audit. It outlines six key techniques: 1) verifying physical existence, 2) assessing correct valuation, 3) confirming ownership, 4) ensuring proper disclosure, 5) identifying any charges on assets, and 6) checking for proper authorization of transactions. Specific procedures are described for different asset types, including obtaining certificates from management and third parties. The auditor must also consider events after the balance sheet date and obtain a management representation letter.
INTERNATIONAL AUDITING STANDARDS -PPT.pptxHeldaMaryA
This document provides information about international auditing standards and the audit process. It discusses the historical background of auditing dating back to ancient civilizations. It also outlines the development of modern auditing with the emergence of large corporations during the Industrial Revolution. The document then explains the role of the International Auditing and Assurance Standards Board (IAASB) in establishing International Standards on Auditing (ISAs) and other standards. Finally, it describes the typical four phases of an audit process: client acceptance, planning, testing and evidence, and evaluation and reporting.
This presentation explains about the meaning as well as various types of audit report which an auditor has present in his books of accounts for the sake of the company's shareholders and various other groups.
Audit working papers are documents prepared or obtained by auditors that provide evidence of the audit work performed. They include information used to plan and conduct the audit, as well as evidence to support the auditor's opinion. Working papers serve several purposes, such as providing evidence of compliance with auditing standards, supporting the conclusions in the audit report, and allowing for review of the audit work. They must be organized, indexed, and signed or initialed by the preparer and reviewer. Working papers are the property of the auditing firm but may be subpoenaed by a court.
The document discusses audit evidence, which is information used by an auditor to arrive at conclusions to support the audit opinion. It should be sufficient and appropriate. Sufficiency refers to quantity and appropriateness to quality and relevance. The auditor considers inherent risk, control risk, materiality, and other factors to judge sufficient and appropriate evidence. Evidence comes from tests of controls, substantive procedures, and inquiries. It is used to evaluate financial statement assertions like existence, completeness, and valuation of assets and liabilities.
The document presents an audit report on the true and fair concept in accounting. It defines an audit report as a statement of collected facts that provides clear information to those without full knowledge. An auditor must verify accounts carefully and report whether they accurately present a company's true financial condition according to accounting principles. A true and fair report means accounts follow standards, transactions are properly classified, information is complete, and assets/liabilities are properly valued and reported. The document also distinguishes accounting from auditing and describes types of audit reports.
The document discusses audit documentation and reporting requirements. It defines audit documentation as the principal record of audit procedures applied, evidence obtained, and conclusions reached by the auditor. Audit documentation serves to demonstrate that the audit was performed in accordance with standards and to provide a record of evidence in case it is needed for legal or regulatory proceedings. The document outlines the purpose, ownership, and confidentiality of audit documentation, as well as requirements for its organization, storage, and retention. It also discusses reporting requirements for auditors under the Companies Act regarding matters such as the Companies (Auditor's Report) Order and management explanations for adverse comments.
The document discusses techniques for verifying assets and liabilities during an audit. It outlines six key techniques: 1) verifying physical existence, 2) assessing correct valuation, 3) confirming ownership, 4) ensuring proper disclosure, 5) identifying any charges on assets, and 6) checking for proper authorization of transactions. Specific procedures are described for different asset types, including obtaining certificates from management and third parties. The auditor must also consider events after the balance sheet date and obtain a management representation letter.
INTERNATIONAL AUDITING STANDARDS -PPT.pptxHeldaMaryA
This document provides information about international auditing standards and the audit process. It discusses the historical background of auditing dating back to ancient civilizations. It also outlines the development of modern auditing with the emergence of large corporations during the Industrial Revolution. The document then explains the role of the International Auditing and Assurance Standards Board (IAASB) in establishing International Standards on Auditing (ISAs) and other standards. Finally, it describes the typical four phases of an audit process: client acceptance, planning, testing and evidence, and evaluation and reporting.
This presentation explains about the meaning as well as various types of audit report which an auditor has present in his books of accounts for the sake of the company's shareholders and various other groups.
Audit working papers are documents prepared or obtained by auditors that provide evidence of the audit work performed. They include information used to plan and conduct the audit, as well as evidence to support the auditor's opinion. Working papers serve several purposes, such as providing evidence of compliance with auditing standards, supporting the conclusions in the audit report, and allowing for review of the audit work. They must be organized, indexed, and signed or initialed by the preparer and reviewer. Working papers are the property of the auditing firm but may be subpoenaed by a court.
This document summarizes 10 Indian Standards on Auditing (SAs). It introduces each SA and provides an overview of its objective, scope, and key requirements. The SAs covered are SA 200, SA 210, SA 220, SA 300, SA 315, SA 330, SA 600, SA 450, SA 620, and SA 299. The document is intended to inform readers about the essential information in each SA regarding an auditor's responsibilities and compliance with quality standards.
An auditor's report formally presents the results of an audit. It assesses whether a company's financial statements are fairly presented and comply with accounting standards. The report includes sections identifying the statements audited, the auditor's responsibilities, and their opinion on whether the statements give a true and fair view. Auditors can issue unqualified, qualified, disclaimer of opinion, adverse opinion, or exception reports depending on any issues identified during the audit.
The document provides summaries of several International Accounting Standards (IAS). It begins by explaining that IAS were formerly issued by the International Accounting Standards Committee to provide guidance on reflecting transactions and events in financial statements, and are now known as International Financial Reporting Standards issued by the IASB. It then summarizes the objectives and key requirements of several individual IAS standards, including IAS 1 on financial statement presentation, IAS 2 on inventories, IAS 7 on statements of cash flows, IAS 8 on accounting policies and errors, IAS 11 on construction contracts, and several others dealing with topics like income taxes, property and equipment, leases, revenue, and employee benefits.
The document discusses the nature and purpose of auditing. It defines auditing as the verification of accounting and financial records to determine accuracy and reliability. The primary objective of an audit is to express an expert opinion on whether the financial statements present a true and fair view. Secondary objectives are to detect and prevent errors and fraud. Specific objectives include verifying accounts and records and reporting on the profit/loss and financial position. The document also differentiates between auditing and accounting in terms of scope, objective, status, qualifications, time period of work, tenure, and accountability.
The document discusses the nature of auditing, including its objectives, principles, concepts, scope, and limitations. It defines auditing and distinguishes it from accounting and bookkeeping. Key topics covered include the independence and ethics of auditors, threats to their independence, and safeguards to address such threats.
- Robert Hiester Montgomery is considered the father of auditing and co-founded PwC. His book "Auditing Theory and Practice" is still considered a benchmark for the audit industry. He asserted the importance of documentation for a proper audit trail.
- Audit documentation, also known as workpapers, is the record of audit procedures performed, evidence obtained, and conclusions reached. Documentation provides an experienced auditor not involved in the audit the ability to understand the nature, timing, and extent of procedures performed to comply with standards and laws.
- The level of documentation should be sufficient such that it demonstrates the work done, evidence seen, findings, and conclusions. More documentation is needed for areas involving risk, judgment, need
The audit report communicates the auditor's opinion on the financial statements and sets out requirements for its content and format. The standard audit report includes basic elements like the title, addressee, management and auditor responsibilities, scope of the audit, and opinion. There are two main types of reports - unqualified and qualified. An unqualified report means the financials fairly represent the entity. A qualified report is issued if problems cannot be resolved with management.
This is a theoretical presentation describes the history of audit and assurance, definition, process of auditing, objectives, responsibilities, expectation gap, audit evidence and how to report the audit paper. This is mainly the vast knowledge about how an auditor performs audit and how the reporting of audit is done.
International financial reporting standards (ifrs)pptIDBI Capital
International Financial Reporting Standards (IFRS) are a global set of accounting standards meant to provide consistency and transparency in financial reporting around the world. IFRS provide rules that accountants must follow to prepare financial statements that are comparable, understandable, reliable and relevant to both internal and external users. IFRS financial statements include a statement of financial position, statement of comprehensive income, statement of changes in equity, and cash flow statement. Many countries around the world either require or allow the use of IFRS to standardized financial reporting practices globally.
ISA 700-705 provide guidance on audit reporting and the four main types of audit reports. An unqualified report is issued when the auditor concludes that the financial statements are prepared in accordance with the applicable financial reporting framework. A qualified report is issued when the auditor concludes there is a material misstatement that is not pervasive or the auditor was unable to obtain sufficient evidence. An adverse opinion is issued when the auditor concludes there are material and pervasive misstatements. A disclaimer of opinion is issued when the auditor is unable to obtain sufficient evidence to form an opinion on the financial statements as a whole.
The International Accounting Standards Board (IASB) is an independent organization that establishes International Financial Reporting Standards (IFRS) accepted globally. The IASB consists of 14 members from different countries and backgrounds who meet publicly to develop high-quality, transparent accounting standards. It seeks to develop a single set of global standards in the public interest and operates independently without political influence through an established due process.
National Financial Reporting Authority Rules 2018Raman Khanna
The document summarizes key aspects of the National Financial Reporting Authority (NFRA) in India, including:
1) NFRA was established under the Companies Act 2013 to regulate accounting and auditing standards and investigate misconduct by auditors.
2) Key functions of NFRA include recommending accounting and auditing standards, monitoring compliance, overseeing audit quality, and investigating auditor misconduct.
3) NFRA has powers similar to a civil court and can impose penalties on auditors for misconduct ranging from fines to practice suspensions.
The document discusses audit evidence and related concepts:
1. Audit evidence is information used by auditors to arrive at conclusions and includes accounting records and other corroborating evidence. Auditors must obtain sufficient and appropriate audit evidence through audit procedures.
2. Sufficient evidence is a measure of quantity based on risk, materiality, knowledge. Appropriate evidence is relevant and reliable based on source, documentation, and objectivity.
3. Audit procedures include inquiry, observation, inspection, confirmation, recalculation, and analytical procedures to obtain evidence for assertions about transactions, account balances, and disclosures.
This document discusses designing substantive audit procedures. It covers determining detection risk based on inherent and control risk, and how the nature, timing, and extent of substantive procedures varies with detection risk. The document describes analytical procedures, tests of details of transactions, and tests of details of balances as types of substantive procedures. It also discusses developing audit programs, computer-assisted techniques, and special considerations like estimates and related parties.
Auditors under the Companies Act 2013 have significant duties and powers. Section 143 outlines responsibilities of auditors such as inspecting books/records, seeking information from management, and reporting on compliance with accounting standards. Auditors must report on financial statements, transactions, internal controls, litigation, and qualifications. They must also report fraud over 1 crore rupees to the government. Non-compliance with section 143 duties can result in penalties for auditors.
The document discusses audit evidence and procedures for gathering evidence. It defines audit evidence and its basic principles of independence, integrity, and objectivity. It describes the sources of audit evidence, including physical examination, confirmations, documentation, analytical procedures, inquiries, reperformance, and observation. It discusses factors like audit risk, reliance on controls, materiality, and reliability that influence evidence. It also covers the appropriateness, relevance, reliability, and direction of testing for audit evidence. Finally, it discusses substantive procedures used to detect material misstatements.
The document provides a history of auditing from ancient times to the present day. It discusses how auditing evolved from simple transaction verification to a more risk-based approach focused on evaluating internal controls and sampling. Key developments include the emergence of statutory audits in the 1800s, a shift to the US in the 1920s-1960s, the introduction of materiality and sampling in the mid-1900s, and recent reforms regarding auditor independence and non-audit services. The objectives and role of auditors have changed over time in response to economic conditions and expectations.
This document provides an overview of auditing principles and practices. It defines auditing and outlines its objectives, which include determining the fairness of financial statements and uncovering frauds and errors. The document discusses the differences between accountancy and auditing, the types of audits, and the advantages of auditing. It also covers audit preparation, audit notebooks, working papers, programs, and trends in tax, cost, and management auditing.
The document discusses internal controls in auditing, including the objectives, components, and case studies related to internal controls. It describes the control environment, risk assessment, control activities, information and communication, and monitoring as the main components of internal controls. The document also differentiates between substantive tests and tests of controls in auditing.
This document discusses the roles and responsibilities of external auditors. It begins by explaining that external auditors provide reasonable but not absolute assurance that financial statements are free from material misstatement. It then covers auditor competency, the different types of audit reports, and the purpose of the audit report. Finally, it discusses public company oversight by the PCAOB and key auditing standards. The document provides an overview of the expectations and regulatory requirements for external auditors.
This document summarizes 10 Indian Standards on Auditing (SAs). It introduces each SA and provides an overview of its objective, scope, and key requirements. The SAs covered are SA 200, SA 210, SA 220, SA 300, SA 315, SA 330, SA 600, SA 450, SA 620, and SA 299. The document is intended to inform readers about the essential information in each SA regarding an auditor's responsibilities and compliance with quality standards.
An auditor's report formally presents the results of an audit. It assesses whether a company's financial statements are fairly presented and comply with accounting standards. The report includes sections identifying the statements audited, the auditor's responsibilities, and their opinion on whether the statements give a true and fair view. Auditors can issue unqualified, qualified, disclaimer of opinion, adverse opinion, or exception reports depending on any issues identified during the audit.
The document provides summaries of several International Accounting Standards (IAS). It begins by explaining that IAS were formerly issued by the International Accounting Standards Committee to provide guidance on reflecting transactions and events in financial statements, and are now known as International Financial Reporting Standards issued by the IASB. It then summarizes the objectives and key requirements of several individual IAS standards, including IAS 1 on financial statement presentation, IAS 2 on inventories, IAS 7 on statements of cash flows, IAS 8 on accounting policies and errors, IAS 11 on construction contracts, and several others dealing with topics like income taxes, property and equipment, leases, revenue, and employee benefits.
The document discusses the nature and purpose of auditing. It defines auditing as the verification of accounting and financial records to determine accuracy and reliability. The primary objective of an audit is to express an expert opinion on whether the financial statements present a true and fair view. Secondary objectives are to detect and prevent errors and fraud. Specific objectives include verifying accounts and records and reporting on the profit/loss and financial position. The document also differentiates between auditing and accounting in terms of scope, objective, status, qualifications, time period of work, tenure, and accountability.
The document discusses the nature of auditing, including its objectives, principles, concepts, scope, and limitations. It defines auditing and distinguishes it from accounting and bookkeeping. Key topics covered include the independence and ethics of auditors, threats to their independence, and safeguards to address such threats.
- Robert Hiester Montgomery is considered the father of auditing and co-founded PwC. His book "Auditing Theory and Practice" is still considered a benchmark for the audit industry. He asserted the importance of documentation for a proper audit trail.
- Audit documentation, also known as workpapers, is the record of audit procedures performed, evidence obtained, and conclusions reached. Documentation provides an experienced auditor not involved in the audit the ability to understand the nature, timing, and extent of procedures performed to comply with standards and laws.
- The level of documentation should be sufficient such that it demonstrates the work done, evidence seen, findings, and conclusions. More documentation is needed for areas involving risk, judgment, need
The audit report communicates the auditor's opinion on the financial statements and sets out requirements for its content and format. The standard audit report includes basic elements like the title, addressee, management and auditor responsibilities, scope of the audit, and opinion. There are two main types of reports - unqualified and qualified. An unqualified report means the financials fairly represent the entity. A qualified report is issued if problems cannot be resolved with management.
This is a theoretical presentation describes the history of audit and assurance, definition, process of auditing, objectives, responsibilities, expectation gap, audit evidence and how to report the audit paper. This is mainly the vast knowledge about how an auditor performs audit and how the reporting of audit is done.
International financial reporting standards (ifrs)pptIDBI Capital
International Financial Reporting Standards (IFRS) are a global set of accounting standards meant to provide consistency and transparency in financial reporting around the world. IFRS provide rules that accountants must follow to prepare financial statements that are comparable, understandable, reliable and relevant to both internal and external users. IFRS financial statements include a statement of financial position, statement of comprehensive income, statement of changes in equity, and cash flow statement. Many countries around the world either require or allow the use of IFRS to standardized financial reporting practices globally.
ISA 700-705 provide guidance on audit reporting and the four main types of audit reports. An unqualified report is issued when the auditor concludes that the financial statements are prepared in accordance with the applicable financial reporting framework. A qualified report is issued when the auditor concludes there is a material misstatement that is not pervasive or the auditor was unable to obtain sufficient evidence. An adverse opinion is issued when the auditor concludes there are material and pervasive misstatements. A disclaimer of opinion is issued when the auditor is unable to obtain sufficient evidence to form an opinion on the financial statements as a whole.
The International Accounting Standards Board (IASB) is an independent organization that establishes International Financial Reporting Standards (IFRS) accepted globally. The IASB consists of 14 members from different countries and backgrounds who meet publicly to develop high-quality, transparent accounting standards. It seeks to develop a single set of global standards in the public interest and operates independently without political influence through an established due process.
National Financial Reporting Authority Rules 2018Raman Khanna
The document summarizes key aspects of the National Financial Reporting Authority (NFRA) in India, including:
1) NFRA was established under the Companies Act 2013 to regulate accounting and auditing standards and investigate misconduct by auditors.
2) Key functions of NFRA include recommending accounting and auditing standards, monitoring compliance, overseeing audit quality, and investigating auditor misconduct.
3) NFRA has powers similar to a civil court and can impose penalties on auditors for misconduct ranging from fines to practice suspensions.
The document discusses audit evidence and related concepts:
1. Audit evidence is information used by auditors to arrive at conclusions and includes accounting records and other corroborating evidence. Auditors must obtain sufficient and appropriate audit evidence through audit procedures.
2. Sufficient evidence is a measure of quantity based on risk, materiality, knowledge. Appropriate evidence is relevant and reliable based on source, documentation, and objectivity.
3. Audit procedures include inquiry, observation, inspection, confirmation, recalculation, and analytical procedures to obtain evidence for assertions about transactions, account balances, and disclosures.
This document discusses designing substantive audit procedures. It covers determining detection risk based on inherent and control risk, and how the nature, timing, and extent of substantive procedures varies with detection risk. The document describes analytical procedures, tests of details of transactions, and tests of details of balances as types of substantive procedures. It also discusses developing audit programs, computer-assisted techniques, and special considerations like estimates and related parties.
Auditors under the Companies Act 2013 have significant duties and powers. Section 143 outlines responsibilities of auditors such as inspecting books/records, seeking information from management, and reporting on compliance with accounting standards. Auditors must report on financial statements, transactions, internal controls, litigation, and qualifications. They must also report fraud over 1 crore rupees to the government. Non-compliance with section 143 duties can result in penalties for auditors.
The document discusses audit evidence and procedures for gathering evidence. It defines audit evidence and its basic principles of independence, integrity, and objectivity. It describes the sources of audit evidence, including physical examination, confirmations, documentation, analytical procedures, inquiries, reperformance, and observation. It discusses factors like audit risk, reliance on controls, materiality, and reliability that influence evidence. It also covers the appropriateness, relevance, reliability, and direction of testing for audit evidence. Finally, it discusses substantive procedures used to detect material misstatements.
The document provides a history of auditing from ancient times to the present day. It discusses how auditing evolved from simple transaction verification to a more risk-based approach focused on evaluating internal controls and sampling. Key developments include the emergence of statutory audits in the 1800s, a shift to the US in the 1920s-1960s, the introduction of materiality and sampling in the mid-1900s, and recent reforms regarding auditor independence and non-audit services. The objectives and role of auditors have changed over time in response to economic conditions and expectations.
This document provides an overview of auditing principles and practices. It defines auditing and outlines its objectives, which include determining the fairness of financial statements and uncovering frauds and errors. The document discusses the differences between accountancy and auditing, the types of audits, and the advantages of auditing. It also covers audit preparation, audit notebooks, working papers, programs, and trends in tax, cost, and management auditing.
The document discusses internal controls in auditing, including the objectives, components, and case studies related to internal controls. It describes the control environment, risk assessment, control activities, information and communication, and monitoring as the main components of internal controls. The document also differentiates between substantive tests and tests of controls in auditing.
This document discusses the roles and responsibilities of external auditors. It begins by explaining that external auditors provide reasonable but not absolute assurance that financial statements are free from material misstatement. It then covers auditor competency, the different types of audit reports, and the purpose of the audit report. Finally, it discusses public company oversight by the PCAOB and key auditing standards. The document provides an overview of the expectations and regulatory requirements for external auditors.
Accounting 440, Spring, 2019 Class Project Name _____.docxbartholomeocoombs
Accounting 440, Spring, 2019
Class Project
Name: ____________________ Student ID __________________
Overview:
This project will be developed throughout the course of the class and will include different items from
the audit process as time permits. You will accumulate the parts listed below (additional parts will be
added as the class proceeds) and turn in a comprehensive portfolio of work on the last day of class with
this project sheet as the cover page. When the assignments require names and other specific
information use the Organization as the auditee name and Firm 440 as the auditor name. Since the class
is trying to incorporate more information than any one organization needs to consider, different pieces
will be taken from various organizations. Keep in mind that this is a fluid project and precise answers are
not necessarily the point. Demonstration of a general understanding of the audit process and
documentation of an effort to learn will be considered for the grade. The project grading criteria will be
based on the concept of a reasonable effort and appropriate documentation of that effort.
Part 1:
Using the Example Engagement letter on Blackboard (Word document) modify the letter to fit the
situation for University Enterprises Corporation of CSUSB the latest financial statements are online at
http://uec.csusb.edu/documents/UniversityEnterprisesCorpFS.pdf. Be aware there are two audit
reports because there is a single audit (see page 43). The information from both reports will need to be
captured in the engagement letter. We can discuss further in class.
Part 2:
Using the example materiality calculation sheet discussed in class, determine materiality using the
following assumptions.
User tolerance for misstatement is high.
Performance materiality is 60% of overall planning materiality.
Part 3:
Using the example audit program discussed in class (available on blackboard), use the information below
to complete the highlighted steps in the program (print the program and fill it in manually). In the work
paper reference column describe what you did (or would do based on the below analysis). Sign off all
completed steps.
Deletions from CIP consist of office equipment for $53,108 and the first part of a capital improvement
project of $2,000. The remaining asset additions are for a truck purchased for $52,983. The leasehold
improvements consist of three AC units (two for $13,000 and one for $4,338). Considering materiality,
explain your test strategy for each asset addition category. The capitalization policy is to capitalize
additions over $10,000.
UEC Fixed Assets
2017 Additions Deletions 2018
Land 4,640 ‐ ‐ 4,640
CIP 63,262 ‐ 55,108 8,154
Buildings 3.
The document summarizes key changes to auditor reporting standards in India, including:
1) A new section on Key Audit Matters which communicates matters of most significance in the audit.
2) Enhanced descriptions of management and auditor responsibilities relating to going concern assessments and disclosures.
3) Expanded descriptions of the auditor's responsibilities, including clarifying the concept of a risk-based audit and specific matters like fraud and internal controls.
Planning: Auditors gain insights into an organization and sector, pinpoint major areas of audit risk, and create an audit strategy to deal with these risks.
Internal controls are checked by the independent auditor in the organization's financial reporting. Controls over the approval, recording, and communication of financial transactions fall under this category.
Substantive Procedures: In order to acquire data pertaining to disclosures made in the audited financial statements, the auditor does tests on transactions and balance details.
Evaluation and Reporting:To establish whether the accounts receivable are free of major misstatements, auditors analyze audit evidence. They publish audit reports which include the results of their financial statements.
The decision of the auditor may be disqualifying (clear), qualified (with limitations), favorable (the report fails to accurately reflect the financial status), or disclaimer (the auditor is not authorized to make an opinion).
International Standards on Auditing for Cayman Funds (2016)David Walker
The independent auditor's report expresses an unmodified opinion on the financial statements of ABC Fund, conducted their audit in accordance with International Standards on Auditing, and identifies valuation of financial instruments and going concern as key audit matters addressed in the audit.
The document discusses the types and objectives of audits performed by certified public accountants (CPAs). It describes financial statement audits, compliance audits, operational audits, and integrated audits. Financial statement audits aim to determine if financial statements are prepared in accordance with generally accepted accounting principles (GAAP). Compliance audits examine adherence to laws and regulations. Operational audits evaluate the effectiveness of business operations. Integrated audits provide assurance on both financial statements and internal controls. The document also outlines the responsibilities of management to prepare reliable financial statements and the auditor to provide reasonable but not absolute assurance through audit testing and evaluation of evidence.
The document discusses several key areas that the auditor needs to consider in completing an audit, including:
1) Performing analytical procedures to confirm conclusions on account balances and identify unexpected fluctuations.
2) Evaluating the going concern assumption, including identifying indicators of going concern issues and reviewing management's plans to mitigate problems.
3) Considering the impact of subsequent events on the financial statements and the auditor's report.
4) Identifying and ensuring proper disclosure of contingencies, commitments, and related party transactions.
The document discusses the new auditor's report requirements that will take effect for audits ending on or after December 15, 2016. Key changes include adding a new section to communicate key audit matters, revising descriptions of management and auditor responsibilities related to going concern, and enhancing descriptions of the audit performed and auditor responsibilities. The new requirements are aimed at making auditor's reports more informative and relevant to financial statement users. The document provides an overview of the new requirements and compares the format of reports under the revised standards versus the current format. An illustrative example of the new auditor's report is also included.
This document is the consolidated financial statements of Hyundai Card Co., Ltd. and its subsidiaries for the years ended December 31, 2018 and 2017. It includes the consolidated statements of financial position, consolidated statements of comprehensive income, consolidated statements of changes in equity, consolidated statements of cash flows, notes to the consolidated financial statements, and an independent auditor's report. The independent auditor's report indicates the consolidated financial statements were audited in accordance with Korean Standards on Auditing and present fairly the financial position and financial performance of Hyundai Card Co., Ltd. and its subsidiaries.
• 2006 General and Financial Information (Proxy Appendix)finance5
This document provides an overview of Caterpillar Inc.'s financial information for 2006 including:
- Sales increased to $41.5 billion in 2006 from $36.3 billion in 2005 driven by higher machinery and engine sales.
- Net income increased to $3.5 billion in 2006 from $2.8 billion in 2005.
- Total assets were $50.9 billion at the end of 2006, up from $47.1 billion in 2005, with inventory and property, plant and equipment being the largest assets.
This document outlines the procedures an auditor takes to complete an audit. It discusses reviewing events after the financial year, ensuring the going concern assumption is appropriate, identifying contingent liabilities, obtaining management representation, performing analytical procedures to review the financial statements, evaluating audit findings, and communicating with the entity. The auditor is responsible for considering subsequent events, accounting for them, and issuing modified reports if necessary. Analytical procedures help form an overall conclusion on the consistency of the financial information.
This document provides an overview of key concepts related to auditing, including:
- The objectives of an audit are to obtain reasonable assurance about whether financial statements are free from material misstatement and to report on the financial statements.
- An auditor must be independent, consider materiality, and determine if financial statements present a true and fair view.
- Planning an audit involves assessing risks, developing an audit strategy and plan, and determining appropriate audit procedures.
- Internal controls are evaluated to determine if they are properly designed and operating effectively.
The stages of an external audit are:
1. Audit acceptance which involves agreeing terms of reference, addressing legal and ethical considerations, and preparing an engagement letter.
2. Audit planning and control which involves developing an overall strategy, establishing objectives and scope, and planning to reduce audit risk.
3. Performing the audit which involves obtaining evidence through tests of controls and substantive procedures, evaluating misstatements, and forming an opinion.
The audit of the City of Killeen's financial statements for the year ended September 30, 2016 resulted in unmodified opinions and no findings. The auditors found no issues with internal controls over financial reporting, compliance with laws and regulations, or compliance with requirements for major federal programs. Management's estimates and judgments were deemed reasonable. The auditors encountered no difficulties during the audit and had no independence issues.
This document contains the consolidated financial statements of Hyundai Capital Services, Inc. and its subsidiaries as of December 31, 2022. It includes the consolidated statements of financial position, comprehensive income, changes in equity, and cash flows. The consolidated statements of financial position shows the company had total assets of KRW 38.6 trillion and total liabilities of KRW 33 trillion. Total equity was KRW 5.6 trillion, with issued capital of KRW 496.5 billion and retained earnings of KRW 4.6 trillion.
Chaim Yudkowsky, CPA, CITP, CGMA - Byte of Success
Part of a series in 1997 focusing on helping small and midsized business make more money / become more profitable
PCI Media Impact Inc - 2015 FS and OMB Uniform GuidancePCIMediaImpact
This document contains the financial statements and independent auditors' report for PCI - Media Impact, Inc. for the year ended December 31, 2015. It includes the statement of financial position, statement of activities, statement of functional expenses, statement of cash flows, notes to the financial statements, and the independent auditors' report. The independent auditors' report provides an unmodified opinion and states that the financial statements present fairly the financial position, changes in net assets, and cash flows of PCI - Media Impact, Inc. in accordance with accounting principles generally accepted in the United States of America.
What is the procedure for financial statement audit.pdfRathnakarReddy17
The purpose of a financial statement audit is to add credibility to the reported financial condition and business performance. Annual reports must be submitted by all publicly traded corporations and are subject to SEC audits.Similarly, lenders typically require audits of the financial statements of the companies they finance. Suppliers may also require audited Financial Statement Preparation in New York before granting trade credit (usually only if the amount of credit requested is substantial).
This document discusses implicit differentiation and exponential growth and decay models. It contains:
1) An example of using implicit differentiation to find the derivative of a circle equation and the equation of the tangent line.
2) An explanation of how exponential growth and decay models take the form of y' = ky, leading to solutions of y = Ce^kt where k is the constant relative growth or decay rate.
3) An example modeling world population growth from 1950-2020 using an exponential growth model that estimates the 1993 population and predicts the 2020 population.
1) A random sample of 1,017 American adults found that 41% thought 3 or more children was the ideal family size.
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The document discusses differentiation rules for various functions. It begins by discussing the derivatives of polynomials and exponential functions. The power rule is introduced, which states the derivative of x^n is nx^{n-1}. It then covers the derivatives of exponential functions f(x)=ax, proving the formula f'(x)=af(x). The product rule and quotient rule are also introduced. Finally, it discusses the derivatives of trigonometric functions, proving that the derivative of sin(x) is cos(x) and the derivative of cos(x) is -sin(x).
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A review of the growth of the Israel Genealogy Research Association Database Collection for the last 12 months. Our collection is now passed the 3 million mark and still growing. See which archives have contributed the most. See the different types of records we have, and which years have had records added. You can also see what we have for the future.
How to Make a Field Mandatory in Odoo 17Celine George
In Odoo, making a field required can be done through both Python code and XML views. When you set the required attribute to True in Python code, it makes the field required across all views where it's used. Conversely, when you set the required attribute in XML views, it makes the field required only in the context of that particular view.
This presentation was provided by Steph Pollock of The American Psychological Association’s Journals Program, and Damita Snow, of The American Society of Civil Engineers (ASCE), for the initial session of NISO's 2024 Training Series "DEIA in the Scholarly Landscape." Session One: 'Setting Expectations: a DEIA Primer,' was held June 6, 2024.
Pollock and Snow "DEIA in the Scholarly Landscape, Session One: Setting Expec...
Chapter audit report
1. 17-1
Audit Report
Providing an independent and expert opinion on
the fairness of financial statements through an
audit is the most frequent attestation service
When performing an audit, the auditors gather
evidence to obtain reasonable assurance that the
statements are in conformity with GAAP
2. 17-2
Typical Coverage
of Audit Reports
Reports on the financial statements ordinarily
include an opinion that is on both the:
Financial statements themselves:
◦ Balance sheet
◦ Income statement
◦ Statement of cash flows
◦ Statement of retained earnings (equity)
Financial statement disclosures
◦ The notes to the financial statements are considered an integral part
of the financial statements
3. 17-3
Conditions Requiring a Modification of the
Auditors’ Standard Report
❑Conditions, although not departures from GAAP,
about which the readers of the financial statements
should be informed
❑Material departure from GAAP in the client’s
financial statements
❑Material scope limitation
4. 17-4
Auditors’ Standard Report –
Public Clients
Includes the words “Registered” and “Independent” in the title.
Must be addressed to shareholders and board of directors (additional parties are allowable).
References auditing standards of the PCAOB.
Provides a discussion of auditor and management responsibilities.
Includes a paragraph indicating that the auditors have also issued a report on the client’s
internal control over financial reporting, or is a combined report on both the financial
statements and internal control.
Includes a Critical Audit Matters Section.
Includes statement on year audit firm began serving the client.
Signed with name of CPA firm not individual partner
Includes the City of the office with responsibility for the audit
Dated no earlier than the date on which the auditors obtained sufficient appropriate audit
evidence to support their opinion
6. 17-6
Opinion Paragraph
Opinion on the Financial Statements
We have audited the accompanying balance sheets of X Company (the
“Company”) as of December 31, 20X7 and 20X6, the related statements of
income, comprehensive income, stockholders’ equity, and cash flows, for
each of the three years in the period ended December 31, 20X7, and the
related notes [and schedules] (collectively referred to as the “financial
statements”). In our opinion, the financial statements present fairly, in all
material respects, the financial position of the Company as of December 31,
20X7 and 20X6, and the results of its operations and its cash flows for each
of the three years in the period ended December 31, 20X7, in conformity
with accounting principles generally accepted in the United States of
America.
We also have audited, in accordance with standards of the Public Company
Accounting Oversight Board (United States) (“PCAOB”) the Company’s
internal control over financial reporting as of December 31, 20X7, based on
Internal Control-Integrated Framework issued by the Committee of
Sponsoring Organizations of the Treadway Commission (COSO) and our
report dated February 9, 20X8 expressed an unqualified opinion.
7. 17-7
Basis of Opinion
Basis for Opinion
These financial statements are the responsibility of the Company’s management. Our
responsibility is to express an opinion on the Company’s financial statements based on
our audits. We are a public accounting firm registered with the PCAOB and are
required to be independent with respect to the Company in accordance with the U.S.
federal securities laws and the applicable rules and regulations of the Securities and
Exchange Commission and the PCAOB.
We conducted our audits in accordance with the standards of the PCAOB. Those
standards require that we plan and perform the audit to obtain reasonable assurance
about whether the financial statements are free of material misstatement, whether
due to error or fraud. Our audits included performing procedures to assess the risks of
material misstatement of the financial statements, whether due to error or fraud, and
performing procedures that respond to those risks. Such procedures included
examining, on a test basis, evidence regarding the amounts and disclosures in the
financial statements. Our audits also included evaluating the accounting principles
used and significant estimates made by management, as well as evaluating the overall
presentation of the financial statements. We believe that our audits provide a
reasonable basis for our opinion.
8. 17-8
Critical Audit Matters
Critical Audit Matters
The critical audit matters communicated below are matters arising from the current period
audit of the financial statements that were communicated or required to be communicated
to the audit committee and that (1) relate to accounts or disclosures that are material to
the financial statements and (2) involved our especially challenging, subjective, or complex
judgments. The communication of critical audit matters does not alter in any way our
opinion on the financial statements, taken as a whole, and we are not, by communicating
the critical audit matters below, providing separate opinions on the critical audit matters or
on the accounts or disclosures to which they relate.
[Include critical audit matters]
Blue, Gray & Company
Certified Public Accountants
We have served as the Company’s auditor since 20X0.
Los Angeles, California
February 9, 20X8
10. 17-10
Auditors’ Standard Report –
Nonpublic Clients
Major revision from text coverage issued in
May 2019 (Handout)
Effective for periods beginning after
December 15, 2020
Discuss the current version
Look at some features of the new version
13. Management is responsible for the preparation and fair
presentation of these consolidated financial statements in
accordance with accounting principles generally accepted in the
United States of America; this includes the design,
implementation, and maintenance of internal control relevant to
the preparation and fair presentation of consolidated financial
statements that are free from material misstatement, whether due
to fraud or error.
14. 17-14
The AICPAStandard Auditors’ Report:
Auditors’ Responsibility Section
Our responsibility is to express an opinion on these consolidated financial statements based on our audits.
We conducted our audits in accordance with auditing standards generally accepted in the United States of
America. Those standards require that we plan and perform the audit to obtain reasonable assurance about
whether the consolidated financial statements are free of material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the
consolidated financial statements. The procedures selected depend on the auditor's judgment, including the
assessment of the risks of material misstatement of the consolidated financial statements, whether due to
fraud or error. In making those risk assessments, the auditor considers internal control relevant to the entity's
preparation and fair presentation of the consolidated financial statements in order to design audit
procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on
the effectiveness of the entity's internal control. 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 consolidated financial statements.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our
audit opinion.
15. In our opinion, the consolidated financial statements
referred to above present fairly, in all material respects,
the financial position of ABC Company and its
subsidiaries as of December 31, 20X1 and 20X0, and the
results of their operations and their cash flows for the
years then ended in accordance with accounting
principles generally accepted in the United States of
America.
16. Types of Reports with Unmodified Opinions
1. Unmodified opinion—standard report. This report may be
issued only when the auditors have obtained sufficient appropriate
audit evidence to conclude the financial statements are not
misstated and there is no need to alter the report for situations 2,
3, or 4 below.
2. Unmodified opinion—with an emphasis-of-matter paragraph.
To emphasize a matter appropriately presented in the financial
statements (e.g., a change in accounting principles).
3. Unmodified opinion—with an other-matter paragraph. To
emphasize a matter other than those presented or disclosed in the
financial statements (e.g., other information in documents
containing audited financial statements).
4. Unmodified opinion on group financial statements. When two
or more CPA firms are involved in an audit and the group auditor
(the firm that performs majority of the work) does not wish to take
responsibility for the work of the component auditors.
17. 17-17
Types of Reports with Modified Opinions
1. A qualified opinion. A qualified opinion states that the
financial statements are presented fairly in conformity
with generally accepted accounting principles “except
for” the effects of some matter.
2. An adverse opinion. An adverse opinion states that
the financial statements are not presented fairly in
conformity with generally accepted accounting
principles.
3. A disclaimer of opinion. A disclaimer of opinion states
that due to a significant scope limitation, the auditors
were unable to form an opinion or did not form an
opinion on the financial statements.
19. 17-19
Unmodified Opinions With Additional
Financial Statement-Related Matter
Substantial doubt about the company’s
going-concern status
Generally accepted accounting principles not
consistently applied
Other circumstances that the auditors
believe should be emphasized
20. Going Concern
Auditor not required to perform procedures specifically designed to
test going-concern assumption but must evaluate the assumption
◦ Conditions indicative of going concern problem
◦ Negative cash flows from operations
◦ Defaults on loan agreements
◦ Adverse financial ratios
◦ Work stoppages
◦ Legal proceedings
◦ Loss of a key franchise, customer, or supplier
◦ An uninsured catastrophe
21. Emphasis-of-MatterParagraph—Substantial Doubtas to Going
ConcernStatus
The accompanying financial statements have been prepared
assuming that the Company will continue as a going concern. As
discussed in Note X to the financial statements, the Company
has suffered recurring losses from operations, has a net capital
deficiency, and has stated that substantial doubt exists about the
Company’s ability to continue as a going concern. Management’s
evaluation of the events and conditions and management’s plans
regarding these matters also are described in Note X. The
financial statements do not include any adjustments that might
result from the outcome of this uncertainty. Our opinion is not
modified with respect to this matter.
NOTE: Ordinarily an unmodified opinion with an emphasis-of-matter
paragraph is issued. Alternatively, a disclaimer of opinion may be
issued.
22. 17-22
Consistency in Application of
Accounting Principles
Auditors are required to indicate in the report when a company
has changed accounting principles resulting in a material effect
on the financial statements being reported on
This requirement pertains to changes in accounting principles but
not changes in accounting estimates
In accepting the change, the auditors should evaluate whether
◦ The newly adopted principle is generally accepted
◦ The method of accounting for the effect of the change is in
conformity with generally accepted accounting principles
◦ The disclosures related to the change are adequate
◦ Management has justified that the new accounting principle is
preferable.
23. Emphasis of Matter Paragraph—Lack of Consistency
A lack of consistent application of accounting principles results in an
emphasis of matter paragraph, such as:
As discussed in Note 5 to the consolidated financial statements, the
Company adopted Statement of Financial Accounting Standards
Update No. XXX (provide title) as of December 31, 20X8. Our opinion
is not modified with respect to this matter.
25. Auditors report on the consistency of application of accounting principles. Assume that the following list
describes changes that have a material effect on a client's financial statements for the current year.
• (1) A change from the completed-contract method to the percentage-of-completion method of
accounting for long-term construction contracts.
• (2) A change in the estimated service lives of previously recorded plant assets based on newly
acquired information.
• (3) Correction of a mathematical error in inventory pricing made in a prior period.
• (4) A change from direct costing to full absorption costing for inventory valuation.
• (5) A change from deferring and amortizing preproduction costs to recording such costs as an
expense when incurred because future benefits of the costs have become doubtful. The new
accounting method was adopted in recognition of the change in estimated future benefits.
• (6) A change to including the employer's share of FICA taxes as “Retirement benefits” on the
income statement. This information was previously included with “Other taxes.”
• (7) A change from the FIFO method of inventory pricing to the LIFO method of inventory pricing.
Required:
For each of the above situations, state whether the audit report should include an emphasis-of-matter
paragraph on consistency.
26. 17-26
Additional Emphasis-of-Matter
Situations—Auditor Discretionary
A risk or uncertainty.
Significant related party transactions described in a note to the
financial statements.
The company is a component of a larger business enterprise.
Unusually important significant events.
Accounting matters affecting comparability (other than changes
in accounting principles) of financial statements with those of the
preceding year.
27. 17-27
Group Financial Statements
Consolidated Parent
Company (Audited by
Group Auditor)
Subsidiary A
(Audited by
Group Auditor)
Subsidiary B
(Audited by
Group Auditor)
Subsidiary C
(Audited by
Component Auditor)
28. 17-28
Group Financial Statements
Group engagement team should obtain understanding
of
◦ Whether component auditors are competent and
understand and will comply with ethical requirements.
◦ Extent of group engagement team involvement with
component auditors.
◦ Whether group engagement team will be able to obtain
necessary information on the consolidation process.
◦ Whether component auditors operate in a regulatory
environment that actively oversees auditors.
29. 17-29
Group Financial Statements
Communicate with component auditors
◦ Inform component auditors how their work will be used.
◦ Communicate ethical requirements.
◦ Provide list of related parties.
◦ Communicate significant risks of misstatement.
Group auditor alternatives
◦ Make no reference to the component auditors.
◦ Make reference to the component auditors.
32. 17-32
Group Financial Statements
Report:
[Standard introductory paragraph language] We did not audit the financial
statements as and for the year ended December 31, 20x1 of Glendo, Inc.,
which statements reflect total sales constituting 27 percent of total
consolidated sales for 20x1. Those statements were audited by other
auditors whose reports have been furnished to us, and our opinion, insofar as
it relates to data included for Glendo, Inc. for 20x1, is based solely on the
report of the other auditors.
[Standard scope paragraph language] We believe that our audits and the
reports of other auditors provide a reasonable basis for our opinion.
In our opinion, based on our audits and the reports of other auditors, …
35. Qualified Opinion—Departure from GAAP
Departure from GAAP
◦ Immaterial – unmodified
◦ Material – qualified
◦ Material and pervasive—Adverse
Misstatements become pervasive when any one of the following
applies:
◦ Not confined to specific accounts.
◦ If confined, they represent a substantial proportion of the
financial statements.
◦ In relation to disclosures, they are fundamental to users’
understanding of the financial statements.
36. Nonpublic Report--Qualified for a Departure from GAAP
(Introductory and Scope Paragraphs are Standard)
Basis for Qualified Opinion
The company has excluded from property and debt in the accompanying balance
sheets certain lease obligations that, in our opinion, should be capitalized in order
to conform with accounting principles generally accepted in the United States of
America. If these lease obligations were capitalized, property would be increased by
$15,000,000, long-term debt by $14,500,000, and retained earnings by $500,000 as
of December 31, 20X8. Additionally, net income would be increased by $500,000
and earnings per share would be increased by $1.22 for the year then ended.
Qualified Opinion
In our opinion, except for the effects of not capitalizing certain lease obligations as
discussed in the Basis for Qualified Opinion paragraph, the financial statements
referred to above present fairly, in all material respects, the financial position of
Wend Company as of December 31, 20X8, and the results of its operations and its
cash flows for the year then ended in conformity with accounting principles
generally accepted in the United States of America.
37. 17-37
Public Report--Qualified for a Departure from GAAP
Opinion
We have audited the accompanying balance sheet of Wend Company as of
December 31, 20X8; the related statements of income, stockholders equity, and
cash flows for the year then ended; and the related notes. In our opinion, except for
the effects of not capitalizing certain lease obligations as discussed in the following
paragraph, the financial statements referred to above present fairly, in all material
respects, the financial position of Wend Company as of December 31, 20X8, and the
results of its operations and its cash flows for the year then ended in conformity
with accounting principles generally accepted in the United States of America.
The company has excluded from property and debt in the accompanying balance
sheets certain lease obligations that, in our opinion, should be capitalized in order
to conform with accounting principles generally accepted in the United States of
America. If these lease obligations were capitalized, property would be increased by
$15,000,000, long-term debt by $14,500,000, and retained earnings by $500,000 as
of December 31, 20X8. Additionally, net income would be increased by $500,000
and earnings per share would be increased by $1.22 for the year then ended.
38. Qualified Opinion-Lack of Sufficient Appropriate Audit Evidence
Scope limitations
◦Imposed by circumstances
◦ Important accounting records destroyed
◦Due to nature of audit
◦ Engaged too late in year to observe client’s beginning
inventory
◦Imposed by client
◦ Client refused to allow auditors to send confirmations to
customers
40. Disclaimer of Opinion
Auditor has no opinion
Issued whenever unable to form an opinion as to
fairness of financial statements
Circumstances resulting in a disclaimer are those
in which the possible misstatements are material
and pervasive.
◦ Multiple uncertainties may also lead to a disclaimer
Not an alternative to adverse opinion
41. 17-41
Disclaimer of Opinion—Scope Limitation
Auditor’s Responsibility
Our responsibility is to express an opinion on these financial statements based on
conducting the audit in accordance with auditing standards generally accepted in the
United States of America. Because of the matter described in the Basis for Disclaimer
of opinion paragraph, however, we were not able to obtain sufficient appropriate audit
evidence to provide a basis for an audit opinion.
Basis for Disclaimer of Opinion
We were unable to obtain audited financial statements supporting the Company's
investment in a foreign affiliate stated at $20,500,000, or its equity in earnings of that
affiliate of $6,250,450, which is included in net income, as described in Note 8 to the
financial statements; nor were we able to satisfy ourselves as to the carrying value of
the investment in the foreign affiliate or the equity in earnings by other auditing
procedures.
Disclaimer of Opinion
Because of the significance of the matter described in the Basis for Disclaimer of
Opinion paragraph, we have not been able to obtain sufficient appropriate audit
evidence to provide a basis for an audit opinion. Accordingly, we do not express an
opinion on these financial statements.
42. Adverse Opinion
Financial statements do not present fairly the financial position, results of
operations, and cash flows of client in conformity with GAAP
Material and pervasive departures from GAAP
Auditor believes departure causes financial statements taken as a whole to be
misleading
44. Placement of Additional Paragraphs
Before opinion paragraph—Basis for Modification
(Qualified, Adverse, Disclaimer) Paragraphs
Following opinion paragraph—Emphasis of matter
and other matter paragraphs
45. Two or More Report Modifications
Qualified for two or more reasons
Example: Qualified because of both a scope limitation
and separate departure from GAAP
Wording of report would include appropriate qualifying
language and explanatory paragraphs for both types of
qualifications
Auditor should consider cumulative effects – disclaimer
of opinion may be appropriate
46. Different Opinions on Different Statements
It is acceptable to express an unqualified opinion on one
statement while expressing a qualified or adverse on the
others
◦ Example: Auditors retained after client has taken its beginning
inventory. A disclaimer may be issued on the income statement
(the auditor doesn't know if income is reasonably stated), but an
unqualified opinion may be issued on the year-end balance sheet.
47. Reporting on Comparative
Financial Statements
Report should cover current year as well as prior period audited by
their firm.
Can express different opinions on different years.
Auditor should update report for all prior periods presented for
comparison.
If prior period audited by another (predecessor) CPA firm
◦ Current year opinion only covers years the CPA firm audited.
◦ For financial statements audited by predecessor auditor either:
◦ Predecessor auditor reissues report with original date, or
◦ Current auditor refers to report of other auditor.
48.
49.
50. Reports to SEC
Forms filed with SEC which include audited financial statements
◦ Forms S-1 through S-11 (registration statements)
◦ Forms SB-1 and SB-2 (registration for small businesses)
◦ Form 8-K (current report)
◦ Form 10-Q (quarterly report)
◦ Form 10-K (annual report)
Auditors should be well versed on requirements of each form