Term
| Standard unqualified audit report contains seven distinct parts. |
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Definition
| 1. report title 2. audit report address 3. introductory paragraph 4. scope paragraph 5. opinion paragraph 6. name of CPA firm 7. audit report date |
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Term
| standard unqualified audit report is issued when the following conditions have been met |
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Definition
| 1. all stmts are included in financial stmts 2. 3 general standards have been followed 3. sufficient and appropriate evidence 4. financial statements in accordance with GAAP 5. no circumstances that require explanatory paragraph |
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Term
| combined report on financial statements and internal control over financial reporting |
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Definition
| addresses both the financial statements and management's report on internal control over financial reporting |
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Term
| unqualified audit report with explanatory paragraph or modified wording |
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Definition
| meets the criteria of a complete audit with satisfactory results and financial statements that are fairly presented, but the auditor believes it is important or required to provide additional information. |
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Term
| most important causes of the addition of an explanatory paragraph of the standard unqualified report |
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Definition
| lack of consistent application of GAAP, substantial doubt about going concern, auditor agrees with a departure from promulgated accounting principles, emphasis of a matter, reports involving other auditors |
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Term
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Definition
| used only when the auditor believes that the oeverall financial statements are so materially misstated or misleading that they do not present fairly the financial position or results of operations and cash flows in conformity with GAAP |
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Term
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Definition
| issued when the auditor has been unable to satisfy himself or herself that the overall financial statements are fairly presented. |
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Term
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Definition
| can result from a limitation on the scope of the audit or failure to follow GAAP |
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Term
| a qualified opinion report can be used only.. |
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Definition
| when the auditor concludes that the overall financial statements are fairly stated. |
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Term
| departures from an unqualified audit report |
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Definition
| 1. the scope of the audit has been restricted (scope limitation) 2. financial statements have not been prepared in accordance with GAAP 3. the auditor is not independent |
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Term
| Three options available with reports involving the use of other auditors |
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Definition
| 1. Make no reference in the audit report 2. make reference in the report (modified wording report) 3. qualify the opinion |
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Term
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Definition
| when a misstatement in the financial statements exists but is unlikely to affect the decisions of a reasonable user. unqualified opinion is appropriate |
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Term
| amounts are material but do not overshadow the financial statements as a whole |
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Definition
| second level of materiality exists when a misstatement in the financial statements would affect a user's decision, but the overall statements are still fairly state and therefore useful. qualified |
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Term
| amounts are so material or so pervasive that overall fairness of the statements is in question |
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Definition
| highest level of materiality exists when users are likely to make incorrect decision if they rely on the overall financial statements. disclaimer or adverse |
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Term
| client imposed scope restrictions |
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Definition
| auditor should be concerned about management preventing discovery of something. disclaimer of opinion when materiality is in question. |
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Term
| restriction result from conditions beyond the clients control |
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Definition
| a qualification of scope and opinion is more likely |
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