2-4 unqualified report with explanatory paragraph or modified wording

unqualified audit report with explanatory paragraph or modified wording

The remainder of this chapter deals with reports, other than standard unqualified reports, on the audit of financial statements. In certain situations, an unqualified audit report on the financial statements issued, but the wording deviates from the standard unqualified report. The unqualified audit report with explanatory paragraph or modified wording meets the criteria of a complete audit with satisfactory results and financial statements that are fairly presented, but the auditor believes it is important or is required to provide additional information . in a qualified, adverse, or disclaimer report, the auditor either has not performed a satisfactory audit, is not satisfied that the financial statements are fairly presented,or its not independent.

The following are the most important causes of the addition of an explanatory paragraph or a modification in the wording of the standard unqualified report:

Lack of consistent application of generally accepted accounting principles

Substantial doubt about going concern

Auditor agrees with a departure from promulgated accounting principles

Emphasis of a matter

Reports involving other auditors