Audit Reports Flashcards
when to use disclaimer of opinion?
when a scope limitation prevents the auditor from obtaining sufficient audit evidence to support an opinion
auditor issues disclaimer of opinions to reflect the inability to obtain sufficient appropriate audit evidence
On which date should an auditor’s report be dated
on and after date when sufficient appropriate audit evidence is obtained.
when to issue disclaimer of opinion
When a CPA is associated with the financial statements of a public entity without auditing or reviewing the information
in the opinion paragraph, if there’s scope limitation, how would it be worded?
the wording in the opinion paragraph should indicate that the qualification pertains to the possible effects to the financial statements, not the scope limitation itself
Inadequate disclosure of necessary information is a departure from
GAAP
when does auditor need to be independent
when giving assurance:
review & audit
when to access risk of fraud
in audit
review report gives:
limited assurance, not opinion
A review consists primarily of
inquiries and analytical procedures
can accountant do compilation if they’re not independent?
Yes as long as the report clearly indicates that the CPA is not independent.
accountant should disclose lack of independence in accountant’s independence report
An auditor’s responsibilities are confined to
expressing an opinion on the financial statements
NOT:
1. Management, not the auditor is responsible for adopting sound accounting policies
the basic unmodified audit report for a nonissuer consists of 4 paragraphs
- The introductory or report on the financial statements paragraph
- management’s responsibility paragraph
- auditor’s responsibility paragraph and
- the opinion paragraph
how to report going concern doubt
in emphasis of a matter paragraph after opinion paragraph
use the terms “substantial doubt” and “going concern”
It refers to the Note in the financial statements, and also specifically mentions the words “going concern” and “substantial doubt”.
how to report going concern doubt if entity’s financial statements adequately disclose its financial difficulties
auditor will provide an unmodified report with an emphasis of matter paragraph, following the opinion paragraph, drawing attention to the disclosure of the going concern issue.
