A1 M5 Modified Opinions Due to Financial Statement Issues

professional judgement

s the auditor usesto determine whether to issue a qualified opinion or an adverse opinion when audit evidence indicates there is a material misstatement of the financial statements

qualified opinion is expressed

when the auditor concludes that misstatements, individually or in the aggregate, are material but not pervasive to the financial statements

adverse opinion is expressed

when the auditor concludes that misstatements, individually or in the aggregate, are both material and pervasive to the financial statements

material misstatements arise from

• the appropriateness of accounting policies

• the application of accounting policies

• the appropriateness of the financial statement presentation or the appropriateness or adequacy of dislcosures in the financial statements

material misstatements related to the appropriateness of accounting policies may arise when

• accounting polcies are not in accordance with the applicable financial reporting framework

• the finnacial statements do not represent the underlying transactions and events in a manner that achieves fair presentation

• the entity has not complied with the financial reporting framework requirements for accounting for and disclosing changes in accounting policies

material misstatements related to the application of accounting policies may arise when

• management has not applied accounting policies in accordance with the applicable finanical reporting framework

• management has not applied accounting policies consistently between periods or to similar transactions and events

• there is an error in the application of an accounting policy

material misstatements related to the appropriateness of financial statement presentation or the appropriateness or adequacy of disclosures may arise when

• the financial statements do not include all required disclosures

• the disclosures are not presented in accordance with the applicable finanical reporting framework

• the financial statements do not provide the disclosures needed to achieve fair presentation

• information that is required to be presented has not been included or disclosed in the financial statements

qualified opinion due to material misstatement of financial statements: nonissuer

• title

• addressee

• qualified opinion

• basis for opinion

• responsibilties of management for the financial statements

• auditor's responsibilities for the audit of the financial statements

• other reporting responsibilities

• signature of the auditor

• auditor's address

• date of the auditor's report

adverse opinion die to material misstatement of financial statements: nonissuer

• title

• addressee

• adverse opinion

• basis for adverse opinion

• key audit matters

• responsibilities of management for the financial statements 

• auditor's responsibilities for the audit of the financial statements

• other reporting responsibilities

• signature of the auditor

• auditor's address

• date of the auditor's report

qualified opinion due to material misstatement of financial statements: issuer

• opinion section

• additional paragraph(s)

• basis for opinion section

• critical audit matters

adverse opinion due to material misstatement of financial statements: issuer

• opinion section

• additional paragraph(s)

• basis for opinion section

• critical audit matters