Professional Review and

Training Center (PRTC)

Forming the
Auditor’s Opinion and
Report Content
(AT.2516)
Leomar R. Cabarles
Forming the
Auditor’s Opinion
 Misstatements

• (1) Factual,
(2) Judgmental,
(3) Projected,
(4) Uncorrected

• Ask MGT:
• Correct, except clearly trivial
• Written representations that no
material misstatements remain
EQCR
TCWG Communication
Forming the
Auditor’s Report
• Unmodified opinion
• No EOM and OM
Unmodified Auditor’s Report – Elements
Unmodified Auditor’s Report – Elements
Title, Addressee, Sub-title
Unmodified Auditor’s Report – Elements
Auditor’s Opinion
Unmodified Auditor’s Report – Elements
Basis for Opinion
Unmodified Auditor’s Report – Elements
Separate
GC EOM
Material Uncertainty Related to GC
Unmodified Auditor’s Report – Elements
Key Audit Matters (KAM)
Key Audit Matters (KAM)
Unmodified Auditor’s Report – Elements
Auditor’s Report—
Other Information
Included in an
Entity’s
Annual Report
Other Information Included in Annual Report
Other Information in Auditor’s Report
 F/S Material Misstatement

• Modify opinion
 OI Material Misstatement

• No opinion modification

• Describe material inconsistency

(misstatement of fact) in OI
section

• Withdraw if legally permitted

Unmodified Auditor’s Report – Elements
Unmodified Auditor’s Report – Elements
Unmodified Auditor’s Report – Elements
Unmodified Auditor’s Report – Elements
Supplementary Information Presented with
the F/S

• Not required by applicable FRF used to

prepare the FS

• Either:
 Supplementary schedules
 Additional notes
Integral Part of F/S SI in Auditor’s Report
Integral Part of F/S SI in Auditor’s Report
Unmodified Auditor’s Report – Elements
Unmodified Auditor’s Report – Elements
Unmodified Auditor’s Report – Elements
Unmodified Auditor’s Report – Elements
Partner, Signature, Address, and Date
 Modified Report—Modified Opinions

1. Auditor’s opinion

2. Basis for opinion

3. Description of auditor’s
responsibilities (disclaimer)

4. Omission of KAM (disclaimer)

5. Omission of OI (disclaimer)
Modified Opinions
Qualified Opinion
Adverse Opinion
Disclaimer of Opinion
Disclaimer of Opinion
 EOM and OM

• Placement depends on:

1. Nature of
information

2. Relative significance
to other elements
EOM and OM
 EOM OM
Matter Found in F/S Not found in
highlighted F/S
Importance F/S Audit
of matter understandin understanding
g
Appropriate Not result to Not prohibited
when modification and KAM
and KAM
Examples Uncertainties Initial audit
 EOM

• Heading that includes “EOM”

• Reference to F/S

• Unmodified opinion to matter

emphasized
OM
 EOM OM
Matter Found in F/S Not found in
highlighted F/S
Importance F/S Audit
of matter understandin understanding
g
Appropriate Not result to Not prohibited
when modification and KAM
and KAM
Examples Uncertainties Initial audit
Auditor’s
Report—
Comparative
Information
 Comparative Information

1. Corresponding figures
 Prior period information integral
part of the current period

2. Comparative F/S
 Prior period information for
comparison with the F/S of the
current period but, if audited, are
referred to in the auditor’s opinion
Corresponding Figures
Comparative F/S
Auditor’s Opinion
Initial Audit and Auditor’s Opinion
-now do the DIY drill-
 DIY Drill Answers

1. C
2. B
3. A
4. D
5. A
 DIY Drill Answers

6. C
7. D
8. C
9. D
10. C
 DIY Drill Answers

11. A
12. C
13. D
14. A
15. B
 DIY Drill Answers

16. B
17. D
18. D
19. D
20. A
 DIY Drill Answers

21. A
22. C
23. D
24. A
25. D
 end of AT.2516 