When should the auditor include an explanatory paragraph?
25. When a qualified opinion results from a limitation on the scope of the audit or an insufficiency of evidential matter, the situation should be described in an explanatory paragraph preceding the opinion paragraph and referred to in both the scope and opinion paragraphs of the auditor’s report.
What is opinion paragraph in audit report?
The third paragraph (commonly referred to as the opinion paragraph) simply states the auditor’s opinion on the financial statements and whether they are in accordance with generally accepted accounting principles.
Is it appropriate for the auditor to include an emphasis paragraph in an unqualified audit report?
Emphasis paragraphs are never required and are not a substitute for required critical audit matters described in paragraphs .
What is an explanatory paragraph audit?
An unqualified report with an explanatory paragraph is a report an audit can issue when the audit falls under one of five situations. The auditor will write an explanatory paragraph that expresses his or her doubt about the going concern of the business in clear and understandable language.
What is qualified opinion?
A qualified opinion is a statement issued in an auditor’s report that accompanies a company’s audited financial statements. Qualified opinions may also be issued if a company has inadequate disclosures in the footnotes to the financial statements.
What types of opinions can an auditor issue?
The four types of auditor opinions are:
- Unqualified opinion-clean report.
- Qualified opinion-qualified report.
- Disclaimer of opinion-disclaimer report.
- Adverse opinion-adverse audit report.
What are the types of opinion in an auditor’s report?
The four types of auditor opinions are: Unqualified opinion-clean report. Qualified opinion-qualified report. Adverse opinion-adverse audit report.
What are the purposes of the opinion paragraph in the auditor’s report identify the most important information included in the opinion paragraph?
3-4 The purpose of the opinion paragraph is to state the auditor’s conclusions based upon the results of the audit evidence. The most important information in the opinion paragraph includes: The words “in our opinion” which indicate that the conclusions are based on professional judgment.
How many paragraphs is an unqualified opinion?
An unqualified report for a private company follows a standard format with three paragraphs: introduction, scope, and opinion.
What kind of opinion can an auditor provide?
Four Different Types of Auditor Opinions
- Unqualified opinion-clean report.
- Qualified opinion-qualified report.
- Disclaimer of opinion-disclaimer report.
- Adverse opinion-adverse audit report.
What is auditor qualified opinion?
A qualified opinion is an auditor’s opinion that the financials are fairly presented, with the exception of a specified area. Unlike an adverse or disclaimer of opinion, a qualified opinion is generally still acceptable to lenders, creditors, and investors.
Who is the predecessor of the current Auditor?
Predecessor auditor – The auditor from a different audit firm, who audited the financial statements of an entity in the prior period and who has been replaced by the current auditor.
What is the international standard on Auditing 710?
International Standard on Auditing (ISA) 710, “Comparative Information— Corresponding Figures and Comparative Financial Statements” should be read in conjunction with ISA 200, “Overall Objectives of the Independent Auditor and the Conduct of an Audit in Accordance with International Standards on Auditing.”
Can a qualified opinion on a prior period be modified?
The auditor’s report on the prior period, as previously issued, included a qualified opinion. The matter giving rise to the modification is unresolved. The effects or possible effects of the matter on the current period’s figures are material and require a modification to the auditor’s opinion regarding the current period figures.