Professional Review and

Training Center (PRTC)

Forming the
Auditor’s Opinion and
Report Content
(AT.2516)

Leomar R. Cabarles
Forming the
Auditor’s Opinion
Misstatements
Misstatements
EQCR
EQCR
TCWG Communication
TCWG Communication
Forming the
Auditor’s Report
• Unmodified opinion
• No EOM and OM
Unmodified Auditor’s
Unmodified Auditor’s Report
Report –– Elements
Elements
Unmodified Auditor’s
Unmodified Auditor’s Report
Report –– Elements
Elements
Title, Addressee,
Title, Addressee, Sub-title
Sub-title
Unmodified Auditor’s
Unmodified Auditor’s Report
Report –– Elements
Elements
Auditor’s Opinion
Auditor’s Opinion
Unmodified Auditor’s
Unmodified Auditor’s Report
Report –– Elements
Elements
Basis for
Basis for Opinion
Opinion
Unmodified Auditor’s
Unmodified Auditor’s Report
Report –– Elements
Elements
Separate
GC EOM
Material Uncertainty
Material Uncertainty Related
Related to
to GC
GC
Unmodified Auditor’s
Unmodified Auditor’s Report
Report –– Elements
Elements
Key Audit
Key Audit Matters
Matters (KAM)
(KAM)
Key Audit
Key Audit Matters
Matters (KAM)
(KAM)
Unmodified Auditor’s
Unmodified Auditor’s Report
Report –– Elements
Elements
Auditor’s Report—
Other Information
Included in an Entity’s
Annual Report
Other Information
Other Information Included
Included in
in Annual
Annual Report
Report
Other Information
Other Information in
in Auditor’s
Auditor’s Report
Report
 F/S Material
F/S Material Misstatement
Misstatement

• Modify opinion
 OI Material
OI Material Misstatement
Misstatement

• No opinion modification

• Describe material inconsistency

(misstatement of fact) in OI section

• Withdraw if legally permitted

Unmodified Auditor’s
Unmodified Auditor’s Report
Report –– Elements
Elements
Unmodified Auditor’s
Unmodified Auditor’s Report
Report –– Elements
Elements
Unmodified Auditor’s
Unmodified Auditor’s Report
Report –– Elements
Elements
Unmodified Auditor’s
Unmodified Auditor’s Report
Report –– Elements
Elements
Supplementary Information
Supplementary Information Presented
Presented with
with the
the
F/S
F/S
Integral Part
Integral Part of
of F/S
F/S SI
SI in
in Auditor’s
Auditor’s Report
Report
Integral Part
Integral Part of
of F/S
F/S SI
SI in
in Auditor’s
Auditor’s Report
Report
Unmodified Auditor’s
Unmodified Auditor’s Report
Report –– Elements
Elements
Unmodified Auditor’s
Unmodified Auditor’s Report
Report –– Elements
Elements
Unmodified Auditor’s
Unmodified Auditor’s Report
Report –– Elements
Elements
Unmodified Auditor’s
Unmodified Auditor’s Report
Report –– Elements
Elements
Partner, Signature,
Partner, Signature, Address,
Address, and
and Date
Date
 Modified Report—Modified
Modified Report—Modified Opinions
Opinions

1. Auditor’s opinion

2. Basis for opinion

3. Description of auditor’s
responsibilities (disclaimer)

4. Omission of KAM (disclaimer)

5. Omission of OI (disclaimer)
Modified Opinions
Modified Opinions
Qualified Opinion
Qualified Opinion
Adverse Opinion
Adverse Opinion
Disclaimer of
Disclaimer of Opinion
Opinion
Disclaimer of
Disclaimer of Opinion
Opinion
 EOM and
EOM and OM
OM

• Placement depends on:

1. Nature of information

2. Relative significance to
other elements
EOM and
EOM and OM
OM
 EOM OM
Matter Found in F/S Not found in
highlighted F/S
Importance F/S Audit
of matter understanding understanding
Appropriate Not result to Not prohibited
when modification and KAM
and KAM
Examples Uncertainties Initial audit
 EOM
EOM

• Heading that includes “EOM”

• Reference to F/S

• Unmodified opinion to matter emphasized

OM
OM
 EOM OM
Matter Found in F/S Not found in
highlighted F/S
Importance F/S Audit
of matter understanding understanding
Appropriate Not result to Not prohibited
when modification and KAM
and KAM
Examples Uncertainties Initial audit
Auditor’s Report—
Comparative
Information
Comparative Information
Comparative Information
Corresponding Figures
Corresponding Figures
Comparative F/S
Comparative F/S
Auditor’s Opinion
Auditor’s Opinion
Initial Audit
Initial Audit and
and Auditor’s
Auditor’s Opinion
Opinion
DIY Drill Answers
DIY Drill Answers
DIY Drill Answers
DIY Drill Answers
DIY Drill Answers
 end of AT.2516 