AUD 1 - Modified Opinions Due to Audit Issues

Question 1

Define the following in a qualified opinion for issuer (GAAS problem):

• Introductory paragraph

- Scope paragraph

Answer 1

Introductory paragraph

• stays the same

Scope paragraph

• should be modified to state that EXCEPT AS DISCUSSED in the following paragraph, we conducted our audits in accordance with the standards of the PCAOB

Question 2

Define the following in a qualified opinion for issuer (GAAS problem):

• Middle paragraph

- Qualified opinion paragraph

Answer 2

Middle paragraph
* placed immediately BEFORE the opinion paragraph

• paragraph should describe the reasons for the inability to obtain sufficient appropriate audit evidence

Qualified opinion paragraph

• should state that in the auditor’s opinion, EXCEPT FOR the effects of the matter(s) described in the basis for qualified opinion paragraph, the financial statements are PRESENTED FAIRLY

Question 3

Define the following in a disclaimer of opinion for issuer (GAAS problem):

• Introductory paragraph

- Scope paragraph

Answer 3

Introductory paragraph

• Use of the words “were engaged to audit” instead of “have audited”
• Deletion of the reference of the auditor’s responsibility

Scope paragraph

• paragraph is omitted

Question 4

Define the following in a disclaimer of opinion for issuer (GAAS problem):

• Explanatory paragraph

- Disclaimer of opinion paragraph

Answer 4

Explanatory paragraph
* placed immediately BEFORE the opinion paragraph

• this paragraph should describe all of the substantive reasons for the disclaimer

Disclaimer of opinion paragraph

• DO NOT EXPRESS AN OPINION is given on the financial statements as a whole