Standard Unqualified Audit Report
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AICPA professional standards provide uniform wording for the standard unqualified audit report. For each of the seven parts:
1-List the specific report parts.
2-Identify the contents of each part.
3-Determine if a qualified opinion, adverse opinion, or a disclaimer of opinion would be issued for each of the above occurrences.
Write a brief statement with the appropriate wording.
1-Assume the following occurred during the audit at ABC Corp:
2-ABC Corp's management restricted the auditors by not allowing them to confirm the raw material receivables.
3-Management members valued fixed assets at their replacement cost.
The lead auditor was the nephew of a member of the board of directors.
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Solution Summary
This solution gives you the seven parts of the standard unqualified audit report. Moreover, it gives you some situations where the standard unqualified report should not be given.
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Audits
AICPA professional standards provide uniform wording for the standard unqualified audit report. For each of the seven parts:
1-List the specific report parts.
The seven parts are the Title, Addressee, Introductory Paragraph, Scope Paragraph, Opinion Paragraph, Name of the Auditor and the Date of the Report.
2-Identify the contents of each part.
"1. Title - Public company reports are required to begin with a title that references the "Independent Registered Public Accounting Firm". Reports for nonpublic companies may contain titles such as "Independent Auditors Report, or "Report of the Independent Auditor."
2. Addressee - This is the individual, group, entity, board of directors, and/or stockholders who retained the services of the auditor.
3. Introductory Paragraph - This paragraph must state three things: "which financial statements are covered by the report, that the statements are the responsibility of management, and that the auditor has a responsibility to express an opinion" (Messier et al., 2006).
4. Scope Paragraph - This paragraph states what is involved in the audit. For public companies the scope paragraph states that the audit was performed in accordance with Public Company Accounting Oversight Board (PCAOB) standards, and ...
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