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An emphasis of matter paragraph indicates that the auditor's opinion is not modified with respect to the matter emphasized. Under the framework of the International Standards on Auditing (ISA), the emphasis of matter paragraph is placed after the opinion paragraph (and, consequently, towards the end of the report), in the auditor's report. [2]
An auditor's report is a formal opinion, or disclaimer thereof, issued by either an internal auditor or an independent external auditor as a result of an internal or external audit, as an assurance service in order for the user to make decisions based on the results of the audit.
Amendment to Statement on auditing standards no. 122, Section 700, Forming an opinion and reporting on financial statements: January 2016: In effect 132: The Auditor's Consideration of an Entity's Ability to Continue as a Going Concern: February 2017: In effect 133: Auditor Involvement With Exempt Offering Documents: July 2017: In effect 134
The auditor must either express an opinion regarding the financial statements, taken as a whole, or state that an opinion cannot be expressed, in the auditor's report. When the auditor cannot express an overall opinion, the auditor should state the reasons therefore in the auditor's report.
The unqualified auditor's opinion is the opinion that the financial statements are presented fairly. A qualified opinion is that the financial statements are presented fairly in all material respects in accordance with US GAAP, except for a material misstatement that does not however pervasively affect the user's ability to rely on the ...
Audit risk is defined as the risk that the auditor will issue a clean unmodified opinion regarding the financial statements, when in fact the financial statements are materially misstated, and therefore do not qualify for a clean unmodified opinion. As a formula, audit risk is the product of two other risks: Risk of Material Misstatement and ...
It requests the auditor to obtain 'sufficient' and 'appropriate' audit evidence in order to draw reasonable conclusions on which to base the audit opinion. The auditor considers reliability of audit evidence collected. For instance, audit evidence is more reliable when it exists in documentary form rather than subsequent oral representation of ...
This conflict voids the CPA firm's independence for multiple reasons, including: the CPA firm would be auditing its own work or the work the firm suggested, and, the CPA firm may be pressured into unduly giving a positive (unmodified) audit opinion so as not to jeopardize the consulting revenue the firm receives from the client.