Auditing and Assurance Services: An Integrated Approach, Ch. 3
In this chapter, explain the focus on Reporting, specifically:
types of reports, i.e. Unqualified, Qualified, and Adverse Opinions
reporting standards from the PCAOB and SEC
Answer : Types of audit reports
1. Unqualified Report
If the auditor has no reservation in respect of matters presented in the financial statements, he gives a clean report. He states that the financial statements give a true and fair view of the state of affairs and profit and loss account during the period.
2. Qualified Report
If the auditor has any reservation in respect of the certain matters mentioned in the financial statements, he may qualify his report. The auditor may qualify his report only when the subject matter of qualification affects the truthfulness and fairness of the financial statement materially.
He shall use the word ‘Subject to‘ before stating his qualifications.
4. Adverse Report
If the auditor is of the opinion that the financial statement does not show the true and fair view of the state of affairs of the business, he shall give an adverse or Negative Report.
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