Chapter3–AuditReports.ppt

Audit Reports Chapter 3 Learning Objective 1 Parts of the StandardUnqualified Audit Report Learning Objective 2 Conditions for StandardUnqualified Audit Report Conditions for StandardUnqualified Audit Report Four Categories of Audit Reports Learning Objective 3 Sarbanes-Oxley Act Sarbanes-Oxley Act Learning Objective 4 Unqualified Report with Explanatory Paragraph Substantial Doubt AboutGoing Concern Auditor Agrees with a Departurefrom a Promulgated Principle Emphasis of a Matter Reports Involving Other Auditors Learning Objective 5 Departures from AnUnqualified Opinion Qualified Opinion Adverse Opinion Disclaimer of Opinion Learning Objective 6 Materiality Levels of Materiality Relationship of Materiality toType of Opinion Materiality Decisions Materiality Decisions Materiality Decisions Learning Objective 7 Discussion of ConditionsRequiring Departure Learning Objective 8 Auditor’s Decision Process More Than One Condition Requiringa Departure or Modification Number of Paragraphsin the Report Learning Objective 9 Impact of E-Commerce onAudit Reporting End of Chapter 3 Determine the appropriate audit report for a given audit situation. Determine whether any condition exists requiring a departure from a standard unqualified report. Decide the materiality for each condition Decide the appropriate type of report Write the audit report The auditor is not independent. There is a scope limitation. There is a substantial doubt about the company’s ability to continue as a going concern. There is a deviation in the statements’ preparation in accordance to GAAP. Standard unqualified 3 Unqualified with explanatory paragraph 4 Unqualified shared report with other auditors 3 Qualified – opinion only 4 Qualified – scope and opinion 4 Disclaimer – scope limitation 3 Adverse 4 Type of Report Discuss the impact of e-commerce on audit reporting. Under auditing standards, the auditor has no obligation to perform any procedur