2unqualified audit report

Learning objectives

After studying this chapter, you should be able to 

3-1 describe the parts of the standard unqualified audit report. 

3-2 specify the conditions required to issue the standard unqualified audit report

3-3 Understand reporting on financial statements and internal control over financial reporting under section 404 of the sarbanes-oxley act

3-4 describe the five circumstances when an unqualified report with an explanatory paragraph or modified wording is appropriate

3-5 identify the types of audit reports that can be issued when an unqualified opinion is not justified

3-6 explain how materiality affects audit reporting decisions

3-7 draft appropriately modified audit reports under a variety of circumstances

3-8 determine the appropriate audit report for a given audit situation

3-9 understand proposed use of international accounting and auditing standards

To allow users to understand audit reports, AICPA professional standards provide uniform wording for the auditor’s reports, as illustrated in the auditor’s standard unqualified audit report in Figure3-1. different auditors may alter the wording or presentation slightly, but the meaning will be the same.

The auditor’s standard unqualified audit report contains seven distinct parts, and these are labeled in bold letters in the margin beside Figure 2-1.