Components of the Standard (Unmodified) Report

Opinion Section

• F/S and years examined.

• Auditors’ opinion on F/S.

Basis for Opinion Section

• Conducted a GAAS audit.

• Required to be independent and meet other ethical responsibilities.

• Audit evidence provides basis for opinion.

Responsibilities of Management Section

• Management is responsible for F/S and internal control over financial reporting

• Management required to evaluate ability to continue as going concern

Auditors’ Responsibilities Section

• Auditor responsible for issuing opinion on financial statements.

• Audit provides reasonable assurance.

• Overview of elements of a GAAS audit.

Key Audit Matters

Significant matters in the audit

• Higher levels of risk.

• Significant audit team and management judgment.

• Significant transactions and events.

If engaged to communicate key audit matters, add Key Audit Matters section in close proximity to Opinion and Basis for Opinion section

• Why matter was considered to be a key audit matter

• How the matter was address during the audit

Types of Opinions

Unqualified

• F/S are in accordance with GAAP.

• Standard report may be modified to disclose additional matters.

Qualified

• “Except for” some matter, F/S are in accordance with GAAP.

Adverse

• F/S are not in accordance with GAAP.

Disclaimer

• No opinion is issued by auditors