Audit Report

Additional
Audit Opinion Audit Report
Paragraphs
 Knowledge check list

 Audit Opinion ( Unmodified or Modified)

 Additional paragraphs ( MUGC, EOMP, OMP)

 Audit Report
 Requirements: Some examples…

- Explain the steps Puffin&Co should now take and the impact on the audit report in relation
to the directors’ refusal to amend the financial statements.

- Describe the impact on the audit report if the issue remains UNRESOLVED.

- Identify what a key audit matter (KAM) is and explain how the auditor determines and
communicates KAM.
 Answering Techniques
Audit Opinion

Steps to Follow

Step 1: Identify: Identify whether it’s a misstatement or the inability to get sufficient

appropriate evidence

Step 2: Materiality: Calculate and comment on materiality

Step 3: Opinion: Name the opinion ( Unmodified or modified)

 Answering Techniques
Audit Opinion

Steps to Follow for modified opinion:

- Write whether Qualified, Adverse or Disclaimer

- For Qualified, explain it’s material and not pervasive ( explain why it isn’t pervasive)

- For Adverse/Disclaimer: Explain how it is pervasive

- Explain how the heading of Opinion paragraph and Basis for Opinion paragraph will chance
when opinion modified

- Explain the contents of Basis for qualified opinion paragraph

 Answering Techniques

Additional Paragraphs (MUGC, EOMP, OMP)

- Explain WHY the additional paragraph is needed

- Explain the contents of the paragraph

- Explain the placement of the paragraph

 Wrap up ‘Questions’

Questions to test your understanding of the exam techniques

March/June 2018: Cranberry Co (5 marks)

Sept/December 2017: Dashing Co ( 5 marks)