Audit Issues: Qualified Opinion or Disclaimer

Material but not pervasive calls for what type of opinion?

Qualified

Material and Pervasive, financial statements are materially misstated

Adverse opinion

Material and Pervasive, inability to obtain sufficient appropriate audit evidence what opinion is issued?

disclaimer of opinion

opinion types are categorized into …

• Audit issue

• Financial statement issue

• No material issue

examples of scope limitations

• time constraints

• inability to observe inventory

• inability to confirm receivables

• restriction on the use of audit procedures

• inadequcy of accounting records

scenarios that result in a disclaimer of opinion…

• auditor is not independent

• unaudited financial statements

Financial statement association occurs when an accountant…

• consents to use of his or her name in connection with financial statements

• has prepared the financial statements even if the accountants name us not used

unaudited opinions cannot receive an…

opinion, so they get a disclaimer of opinion

required disclaimers on unaudited financial statements?

• accountant must read financial statements for errors

• unaudited should be clearly marked on each page of F/S

• disclaimer may accompany the unaudited f/s or it may be directly placed on them

when modified opinions are issued, the following heading will change for non-issuer reports

• opinion —→ qualified opinion

• basis for opinion section —→ basis for qualified opinion

what is in the qualified opinion section?

Except for the possible effects of the matter described in the basis for a qualified opinion section of our report

What can you not focus on in the qualified opinion section?

The scope limitation

What is added in the basis for qualified opinion section?

Paragraph describing inability to obtain sufficient appropriate audit evidence

For non-issues what would be the disclaimer of opinion headings?

Opinion → Disclaimer of opinion

Basis For opinion→ Basis for disclaimer of opinion

When disclaiming an opinion, the auditor should not include…

Key audit matters section

In the disclaimer of opinion, one would tend to use the terminology…

Were engaged

What has been added to the basis for disclaimer of opinion for non-issuers?

A new paragraph describing reasons for inability to obtain audit evidence. (Some of the standards wording for unmodified basis for opinion section has been moved to The auditor’s responsibility or omitted)

There are no head changes for…

• Unqualified

• Qualified

• Adverse

For issuer reports

Headings are consistent with the…

Standard unqualified report

Headings change for issuers when…

disclaimer of opinion is rendered