AUDIT REPORT

-final product of any audit process that communicates the auditor’s findings to interested users. expresses an opinion.
Proprietorship – sole proprietor PSA 705
Elements of Standard Unmodified Report Partnership – partners & the firm or the firm alone Unqualified / Unmodified Qualified / Modified
Joint venture – participants PSA 700
Title - with the word “Independent” Incorporated Entity – BOD/TCWG or SH (not to an officer) Q or Adverse Q or Disclaimer
Addressee > Outside Party – outside party Entity (misstatement) (scope limitation)
Opinion Paragraph 1 State that FS have been audited
PSA Title of each statement audited management circumstance
Basis for Opinion Refer to Auditor’s responsibilities
2 Refer to summary, significant acctg policies imposed imposed
Going Concern PSA 570 Independence (ethical stds) Opinion Date (period covered by each statement) Material not Pervasive Q Q
Key Audit Matters PSA 701 (can be removed) SA Evidence Criteria / FRF General purpose Material & Pervasive A D
Mgt & TCWG Responsibilities Preparation of FS / Internal Control
Assess ability to continue going concern Special purpose Pervasive - affecting almost all /whole FS
Auditor’s Responsibilities relate to almost all/many /big accounts
Objective (issue opinion, RAss)
Other & Legal & Regulatory Requirements Reasonable Assurance Fair presentation Compliance *Remedy for scope lim.
Name of the Engagement Partner (exception significant personal threat) Misstatement 1. Compliance (explicit)   perform alt procedure
Signature – either audit firm, personal name or both. (for SEC must be signed in personal name) 2. Addt’l Disclosures (I/E)   a. auditor was satisfied
3. State departure (E)   Unqualified
Address of the auditor – where the auditor practices PSA 706 from stds
b. not satisfied
Date – should not be earlier than the date the auditor has obtained SA Evidence Additional Paragraphs Q, D, withdraw
*Supplementary Information Emphasis of Matter (before or after KAM) Other Matter Paragraph *auditor’s independence is impaired
-must be clearly differentiated from the rest of FS Included in the report items disclosed in FS Items not disclosed/mentioned in FS a. during pre-engagement
SI not covered by “unaudited”  PSA 210 FRF not acceptable  Unable to withdraw (pervasive) decline / reject audit
If not clearly differentiated, SI covered by opinion.  PSA 560 subsequent events  PSA 800 special purpose framework b. during Audit
a. ∆ in estimates  Uncertainties silent: U + EM  Includes more than one matter, use stop -> withdraw or D
valid / silent -> U (no need for Em)  Acctg. Inconsistencies Special Cases: different subheadings
invalid -> ask for adjustment -> not adjusted  Major catastrophe a. Client refused to give b. Client provided info but refused to
& material – Q, A  Material going concern problems addtnl info – Q, W, D disclose or adjust – Q, A
b. ∆ in policy valid -> U + Em PSA 720
Other Information - financial and nonfinancial (other than F)
invalid -> ask for adjustment -> not adjusted ∆s in elements of U report
Inconsistency – contradicts information in audited FS
& material – Q, A Q A D
PSA 710 material and mgt refuses to revise therefore:
O   
Comparative Information - amounts/disclosures in prior FS Prior Subsequent 1  , engaged
Corresponding Figures – current period only Q, A relevant stds on sbsqnt 2, except , do not , no opinion
Prior AudRep Q, A, D -> matter is -> unresolved-modify for present fairly
Communicate with TCWG Notify the TCWG
resolved – do not refer B   
Describe inconsistencies in OM Take appropriate action
Prior AudRep U -> CF not properly restated / R omit
Withhold the AudRep
no appropriate disclosures – Q, A S omit
If legally permitted, withdraw
Prior FS misstated -> CF are properly restated / with K  
appropriate disclosures – U +EM Material misstatement of facts
Prior FS audited by predecessor state in OM that discuss with management report is modified -> opinion is NOT modified
1. audited by predecessor 2. type of opinion, reasons 3. date If not satisfied, request mgt to consult w/ 3rd party(legal counsel) opinion is modified -> report is modified
Prior FS not audited state in OM -> unaudited Mgt refuses to correct, notify TCWG, take appropriate action
Comparative FS– each period PSA 805 *Use of Experts
Prior opinion differ from present -> disclose reasons in OM Specific element or single FS – express separate opinion Unqualified –do not mention
Prior FS audited by predecessor state in OM that -may be published together with complete FS Q, A, D
1. audited by predecessor 2. type of opinion, reasons 3. date -If the opinion on the complete FS is A, D not due to work of expert
Prior FS not audited state in OM -> unaudited not permitted to issue U on specific/single mention -> ask permission
PSA 800 exception: for specific element, rqts: If Yes, No, seek legal advice
Special purpose framework - meet the needs of specific users 1. not prohibited by law
 Tax basis reporting reqts: 2. reports are published separately
 Cash basis -follow PSA 700 format 3. element of FS is not substantial portion of FS
 FRProvision by a regulator -purpose & intended users
 FRProvision of a contract -alert restriction through EM Group FS Audit PSA 600
-mgt has a choice of FRFs, make Group engagement partner -responsible for the group
Prohibited: piecemeal opinion on
reference to mgts responsibility audit engagement
audit of entire FS
Component- entity/business activity for which group
PSA 810 mgt prepares financial info included group FS
Summary FS– fairly presented , consistency
-You can only audit the summary FS if you audited the complete FS
If satisfied, group engagement partner always
-Audit Report
assumes responsibility
o of summary should be dated no earlier than date in the audited FS
If not satisfied, addt’l work should be done until
and the date on which the auditor obtained SA evidence
GEP is satisfied
o of audited FS is Q, EM, OM and the auditor is satisfied then,
For significant components,
state the opinion of audited FS, basis, and effects to summary FS
Review the work conducted by component auditor
o of audited FS is A, D (do not accept) otherwise,
If necessary, audit the financial info of component
state the opinion of audited FS, basis, do not express opinion
For not significant,
-not consistent or not a fair summary and mgt does not agree to make
Apply analytical procedures
changes – A on summary FS
-distribution or use in audited FS is restricted then include similar
restriction in the audit report of summary FS