Chapter 3

1. Report title- must include title with word independent.eg indep. auditors opinion, independent unit report etc. Independent conveys that the auditor is unbiased. 2. Report Address- Must be address to the company, BOD or stockholders. Recent trend is to address it to BOD and stockholders to show that auditor is independent of the company. 3. Introductory para- will clarify 3 things a) It will say that it is an Audit report. This will distinguish it from compliance and review report b) It will mention the names of the fin statements audited- B/S, I/S, C/f stmt etc. It will also include the periods audited. The names of the fin stmt will be same on auditors report as in mgmt.s data. c) It will say that the statements responsibility of mgt and that auditor is only providing an opinion. 4. Scope para- tells what exactly the auditor did. Did he follow GAAP or PCAOB? states that audittrying to provide reasonable assurance of whether fin stmt is free of material misstatement. How was data audited- test data? States the evidence accumulated and mentions that it believes that it is appropriate for the circumstances to give that opinion. Mentions that auditor has evaluated the principles/policies /disclosures as adopted by the management.(but holds mgmt. responsible for all thatsaid in intro para) 5. Opinion para most cruicial para of audit report. Puts it as opininon rather than as statement coz some misstatement may still be there. Based on best judgement! The auditor is required ot give an opinion about the fin stmt as a whole, including conclu about whether co followed GAAP or IFRS . Presented fairly term used generally. But sometimes auditors need to go beyond GAAP to see that users may not be misled. 6. Name of CPA firm- company name written rather than individual/partner 7. Audit report date- different than statement date. That means auditor has included his opinion based on data collected till that date of report.

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All stmts includes- bs,is,re,cf Sufficient evidence accumulated 3 conditions in al respects of engagement met US GAAP followed No additonsl para or modification in wording required in original report If all 5 = yesthen auditor issues standard unqualified audit report. also called clean report

SOX- sec 404(b) requires auditor of public co to attest the mgmts. Report on the effectiveness of internal control over fin stamt. Also requires the mgmgt report to mentioned the mgmts statement on the effectivess of its internal control. PCAOB AS5 requires co to report combined- opinion on Fin stmt and that on the effectiveness of internal ctrl on FS Auditor can chose to do single or combined.

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