Forming an Audit Opinion

Question 1

what is the big picture of audit opinions?

Answer 1

1a. Unqualified (clean opinion) - Issuer
1b. Unmodified (clean opinion) - Nonissuer
2a. Qualified “except for GAAP” (material) - GAAP problem
2b. Qualified “except for GAAS” (material) - Audit problem
3a. Adverse (GAAP problem and pervasive)
3b. Disclaimer (GAAS problem and pervasive)
4. Withdraw (false, fraudulent, deceptive, or misleading)

Question 2

what does GAAS do?

Answer 2

GAAS provides guidance on how to perform the audit

Question 3

which FS an auditor needs to audit to express an opinion on an entity’s stockholders’ equity?

Answer 3

BS only

Question 4

which FS an auditor needs to audit to express an opinion on an entity’s element based on net income?

Answer 4

IS and BS