Auditing: Four Types of Reports
1: There are four different types of audit reports. There are (1) unqualified reports, (2) qualified reports, (3) adverse reports, and (4) disclaimer reports. An unqualified report is issued when the independent auditor finds that the books and records of the company being audited conform to generally accepted accounting principles. A qualified report would be issued when the auditor encounters one of two types of situations which do not comply with generally accepted accounting principles. However, the rest of the financial statements are fairly presented. A qualified report states that the financial statements of the company being audited are fairly presented except for the manne
In this scenario, the auditor's liability is limited to those persons who relied on auditor's opinion relating to financial statements that contained material misstatements. When concluding as to whether the effect of misstatements are material, an auditor considers their nature and amount in relation to the nature and amount of items in the financial statements for the company being audited. Issuance of an unqualified opinion indicates that the independent auditor believes that the company's financial condition, position, and operations are fairly presented in the financial statements prepared by the company. r in which one or more aspects of the company's accounting books and records do not conform to generally accepted accounting principles (GAAP). Independent auditors may be held liable for fraud or gross negligence. An amount that is material to the financial statements of one entity may not be material to the financial statements of another entity of a different size or nature. An adverse report would be issued if and when an auditor find s that the client's financial statements are not in conformity with GAAP and that the deviation from GAAP materially affects the accuracy of the company's financial statements. Typically, this disclaimer is issued when the auditor is unable to obtain sufficient, verifiable information or documentation from which to draw conclusions about the accuracy of the financial statements, or when the auditor's independence has been hampered by the company that is the subject of the audit. A disclaimer report is issued when an independent auditor wishes to disclaim an opinion about the accuracy of the financial statements. Failure to properly address these issues results in liability for the auditor relating to misstatements in the financial statements of the audited company. 3: When considering the auditor's responsibility to obtain reasonable assurance that the financial statements are free from material misstatement, the auditor is required to plan the audit to obtain reasonable assurance of detecting misstatements that could be large enough to quantitatively material to the financial statements. 2: An unqualified opinion is issued if and when the independent auditor determines the company's financial statements are free of material misstatements and are in accordance with GAAP.
Common topics in this essay:
,
GAAP Issuance,
financial statements,
independent auditor,
report issued,
accepted accounting principles,
issued independent auditor,
material financial statements,
accounting principles,
accepted accounting,
issued independent,
issued auditor,
material financial,
company's financial,
company audited,
report issued independent,
accuracy financial statements,
|
Acceptance Essays
