基础讲义auditing1audit reports人认为Auditing是CPA四门考试中最难通过的一门

Auditing的难点在于很多准则的叠加、交叉，最后非常复杂。人对accountant有个定位，叫Professional，意为专业人员，和医生一样，一般人搞不懂，也没必要搞懂。花钱请CPA来做就行了。专业、复杂是为了保证质量，让他遵从国际准则没问题，但国际准则必须达到准则的质量要求。萨班斯法案本来是的国内法，但全世界都得执行。国内很多单位也要搞SOX。这实际上是AICPA们制订出来的标准。所以，下功夫学好了这门课，你不用担必用不上，能直接用得上，甚至你到英国、德国、、加拿大、新加坡、都用得上。Engagementacceptanceandunderstandingtheassignment12-determinenatureandscopeofConsiderthefirm’spoliciesandprocedurespertainingtoacceptanceandCommunicatewiththeEstablishanunderstandingwiththeandConsiderothernningIdentifymattersandprepareationforcommunicationswiththosecharged Understandingtheentityanditsenvironment（includingI/C）16-DetermineandmaterialitylevelsforF/StakenasaConductandriskassessmentdiscussionsamongauditconsiderationofPerformandriskassessmentConsideradditionalaspects/F.Consider anunderstandingoftheH.AssessandtheriskofmaterialI.IdentifyandsignificantPerformingauditproceduresandevaluatingevidence16-DevelopoverallresponsestoperformauditproceduresresponsivetorisksofmaterialEvaluatingauditfindings,communications,andreporting16-performyticalevaluatethesufficiencyandappropriatenessofauditevaluatewhetherauditationisinaccordancewithprofessionalJ.PrepareAccountingandreviewservicesengagements12-nthe evidencetoformabasisforPrepareEthicsandOtherprofessionalAuditedfinancialThepurposeofanauditThepurposeofanauditistoprovidefinancialstatementsuserswithanopiniononwhetherthefinancialstatementsarepresentedfairly,inallmaterialrespects,inaccordancewiththeapplicablefinancialreportingframework.Auditedfinancial-theTheapplicablefinancialreportingframeworkisthefinancialreportingframeworkthatisacceptableinviewofthenaturetheentityandtheobjectiveofthefinancialstatements,orthatisrequiredbylaworregulation.Acceptablefinancialreportingframeworksincludegeneralpurposeframeworksdesignedtomeettheneedsofawiderangeofusers（e.g,U.S.GAAPandIFRS,andspecialpurposeframeworks.ISAsdiscussbothcomplianceframeworksandfairpresentationframeworkswhendiscussingapplicablefinancialreportiframeworks.US.GAASdoesnotmakeanyreferencetocomplianceframeworksbecauseallfinancialreportingframeworksusintheUnitedStatesarefairpresentationframeworks.Auditedfinancialstatements-theAfairpresentationframeworkisafinancialreportingframeworkthatrequirescompliancewiththerequirementsoftheframeworksand:-acknowledgesexplicitlyorimplicitlythattoachievefairpresentationofthefinancialstatements,itmaybenecessarymanagementtoprovidedisclosuresbeyondthosespecificallyrequiredbytheframework;-acknowledgesexplicitlythatitmaybenecessaryformanagement,inextremelyrarecircumstances,todepartfromarequirementoftheframeworkstoachievefairpresentationofthefinancialstatements.Auditedfinancialstatements-theB.Theauditfunctionadds“credibility”Preparationandfairpresentationofdesign,implementationandmaintenanceofprovidingtheauditoradequateinformationAuditedfinancialstatements-thebasicsThepreparationandfairpresentationofthefinancialstatementsidentificationoftheapplicablefinancialreportingpreparationandfairpresentationofthefinancialstatementsinaccordancewiththeframeworkinclusionofanadequatedescriptionoftheframeworkinthefinancialstatements.Auditedfinancialstatements-thebasicsExpressinganopiniononF/SCompetenceandcapabilitiesEthicalrequirementsAuditedfinancialstatements-theReasonableAssuranceisahigh,butnotabsolute,levelofassurance.Auditora.nandRisksofmaterialAuditAuditedfinancialstatements-theinherentlimitationsofanTheNatureofFinancialBecausetheyinvolvejudgmentbyTheNatureofAuditTimelinessofFinancialReportingandtheBalanceBetweenCostandBenefitPRPOFESSIONALSTANDARDSAuditedfinancialstatements-theAUDITINGGenerallyacceptedauditingstandardsToaddressconcernsabouttheclarity,length,andcomplexityofitsstandards,andtoconvergeitsstandardswiththeinternationalstandardsonAuditing（ISAs）,theASBredraftedallofitsSASs.TheseclarifiedSARswereissuedbytheASinlate2011andareeffectiveforauditsoffinancialstatementsforperiodsendingonorafterDecember15,2012.Generally ernmentauditingstandards accountingoversightboardThePCAOBwasestablishedpursuanttotheSarbanes-OxleyActof2002.ThePCAOBestablishesauditingandrelatedprofessionalpracticestandardstobeusedinthepreparationandissuanceofauditreportsforissuers.IssuersconsistofentitiessubjecttotherulesoftheSEC（primarilypubliccompaniesPCAOBiscomprisedof5full-timePublicaccountingfirmsmustregisterwiththePCAOBinordertoauditaInternationalstandardsonTheinternationalAuditingandAssuranceStandardsboard（B）,astandardssettingboardoftheinternationalFederationofAccountants（IFAC）,establishesinternationalstandardsonAuditing（ISA）ISAsdonotoverridethelocalSTANDARDSFORENGAGEMENTSOTHERTHANStatementsonstandardsforattestationengagements（SSAE）Statementsonstandardsforaccountingandreviewservices（SSARS）PRPOFESSIONALSTANDARDSOTHERTheAICPAcodeofprofessionalconductStatementsonqualitycontrolstandardsSecuritiesandExchangeCommission（SEC）Sarbanes-Oxleyactof2002IFACcodeofethicsforprofessionalaccountantsPRPOFESSIONALSTANDARDSIFACCodeofEthicsforprofessionalTheinternationalEthicsStandardsboardforaccountant（IESBA）,astandardsettingboardoftheinternationalfederatiofaccountants（IFAC）,establishestheIFACcodeofEthicsforAccountants.Thelowestlevelofstringentethicsstandardsformembers.PRPOFESSIONALSTANDARDSAUDITINGGUIDANCE:THEGAASAICPAstatementsonauditingstandards（SASs）andPCAOBauditingIntheUnitedStates,auditorsarerequiredtocomplywithSASspublishedbytheauditingstandardsboardforauditsofnonissuersandPCAOBauditingstandardsforauditsofissuers.Theterms“must”or“isrequired”indicateanunconditionalrequirement,whichmustalwaysbeTheterm“should”indicatesapresumptivelymandatoryrequirement,whichmustalwaysbeconsidered;however,raredeparturesfromtherequirementarepermittedaslongasthereisappropriatejustification,performanceofsufficientalternativeprocedures,andthorough Theterms“may”,“might”,and“could”indicateexnatorymaterialthatdoesnotimposeaprofessionalrequirementISAs,all“must”.Rare,InterpretiveOverallobjectiveOveralltoobtainreasonabletoreportonthefinancialWhenreasonableassurancecannotbeobtainedandqualifiedopinionintheauditor’reportisinsufficientinthecircumstances,GAASrequirethattheauditordianopinionorwithdrawfromtheengagement,fessionalskepticism.ShouldbeconditionsthatindicatepossibleTheAuditorshouldneitherassumethatmanagementisdishonestnorassumeunquestionedhonesty.Abeliefthatmanagementishonestandhasintegritydoesnotrelievetheauditoroftheneedtomaintainprofessionalskepticismorallowthauditortobesatisfiedwithlessthanpersuasiveevidence.EthicalIndependenceinbothfactandappearanceismostTheauditormustbeindependentofanentitywhenperforminganengagementinaccordancewithGAASunless:a）GAASprovidesotherwiseorb）theauditorisrequiredbylaworregulationtoaccepttheengagementandreportonthefinancialstatements.Professionaltheauditorshouldexerciseprofessionaljudgmentinnningandperforminganaudita.b.c.d.e.sufficientappropriateauditevidenceandauditcompliancewithREPORTSONAUDITEDFINANCIALAcompletesetofFinancialstatementsincludes:BalancesheetStatementof StatementofchangesinequityCashflowstatementREPORTSONAUDITEDFINANCIALToformanopinion,shouldevaluatewhetherAdequayConsistentwithTheaccountingestimatesmadebymanagementareRelevant,reliable,comparable,EasytounderstandtheeffectofmaterialtransactionsandTerminologyisFairlyRepresenttheunderlyingII.Unmodifiedopinion,cleanopinionMANAGEMENT’SRESPONSIBILITYFORTHEF/SAUDITOR’SRESPONSIBILITYOTHERREPORTINGRESPONSIBILITIESSIGNATUREOFTHEAUDITORAUDITOR’SADDRESSDATEOFTHEAUDITOR’SDateoftheauditor’sTheauditor’sreportshouldbedatednoearlierthanthedateonwhichtheauditorhasobtainedsufficientappropriateaudiTheauditor’sreportdateshowsthefinaldateofauditorresponsibilityforcomparativefinancialstatements,theauditdateforthemostrecentauditshouldbeREPORTSONAUDITEDFINANCIALManagement’sresponsibilityforthefinancialManagementsisresponsibleforthepreparationandfairpresentationofthesefinancialstatementsinaccordancewithaccountingprinciplesgenerallyacceptedintheUnitedStatesofAmerica;thisincludesthedesign,implementationandmaintenanceofinternalcontrolrelevanttothepreparationandfairpresentationoffinancialstatementsthatarefrommaterialmisstatementwhetherduetofraudorerror.Ourresponsibilityistoexpressanopiniononthesefinancialstatementsbasedonouraudit.WeconductedourauditinaccordancewithauditingstandardsgenerallyacceptedintheUnitedStatesofAmerica;thosestandardsrequirethatwenanperformtheaudittoobtainreasonableassuranceaboutwhetherthefinancialstatementsare frommaterialmisstatement.Anauditinvolvesperformingprocedurestoobtainauditevidenceabouttheamountsanddisclosuresinthestatements.Theproceduresselecteddependontheauditor’sjudgment,includingtheassessmentthoseriskofmaterialmisstatementofthefinancialstatements,whetherduetofraudorerror.inmakingthoseriskassessments,theauditorconsidersinternalcontrolrelevanttotheentity’spreparationandfairpresentationofthefinancialstatementsinordertodesignauditproceduresthatareappreciateinthecircumstances,butnotforthepurposeofexpressinganopinionontheeffectivenessoftheentity’sinternalcontrol.Accordingly,weexpressnosuchopinion.Anauditalsoincludesevaluatingtheappropriateness,aswasevaluatingtheoverallpresentationofthefinancialstatements.REPORTSONAUDITEDFINANCIALWebelievethattheauditevidencewehaveobtainedissufficientandappropriatetoprovideabasisforourauditopinion.Inouropinion,thefinancialstatementsreferredtoabovepresentfairly,inallmaterialrespects,thefinancialpositionof asofDecember31,20x1,andtheresultsofitsoperationsanditscashflowsfortheyearthenendedinaccordanwithaccountingprinciplesgenerallyacceptedintheUnitedStatesofAmerica.ReportonOtherlegalandregulatory[formandcontentofthissectionoftheauditor’sreportwillvarydependingonthenatureoftheauditor’sotherreporting[Auditor’s[Auditor’scityandstate][Dateoftheauditor’sreport]L.Auditor’sreportsforauditsconductedinaccordancewithbothGAASandanothersetofauditingstandardsREPORTSONAUDITEDFINANCIALSTATEMENTSDifferencebetweentheauditor’sreportunderU.SGAASandtheISAsRequirementsintheISAsandnotinUS.GAASISAsindicatethatthedescriptionintheauditor’sreportcaneitherrefertothepreparationandfairpresentationofthefinancialstatementsorthepreparationoffinancialstatementsthatgiveatrueandfairview,USGAASdoesnotincludeanyreferenceto“trueandfairview”RequirementsinGAASnotintheDifferencesbetweenAUDITSOFGROUPFINANCIALComponent.AcomponentisanentitythatisincludedinthegroupComponentauditor.AcomponentauditorisanauditorwhoperformsworksonthefinancialinformationofaGroupengagementpartner.ResponsibleforthegroupauditGroupengagementteam.Thegroupengagementteamincludesthegroupengagementpartner,otherpartners,andstaffwhoestablishtheoverallauditstrategy,communicatewithcomponentauditors,performwork,formanopiniononthegroupFGroupfinancialstatements.ArefinancialarestatementsthatincludethefinancialinformationofmorethanThegroupengagementteammustunderstandthefollowingforeachcomponentauditorsExtenttowhichwillbeinvolvedintheworkofcomponentauditorGetinformationRegulatoryenvironmentthatactivelyoverseesIfthecomponentauditorisnotindependentorthegroupengagementteamhasseriousconcernsaboutanyofthematterslistedabove,thegroupengagementteamshouldnotusetheworkofthecomponentauditorormakereferencetothecomponeauditorintheauditor’sreportC.Determiningwhethertomakereferencetothecomponentauditorintheauditor’sa.ReferencetothecomponentauditorshouldnotbemadeunlessthefollowingrequirementsareThecomponent’sfinancialstatementsarepreparedusingthesamefinancialreportingframeworkasthegroupfinancialstatementsThecomponentauditorhasperformedanauditinaccordancewithGAAS,orwhenrequired,theThecomponentauditor’sreportisnotrestricteduse.Makingreferenceintheauditor’sreportTheauditor’sreportonthegroupF/Sshouldindicatethatthecomponentwasnotauditedbytheauditorofthegroupfinancialstatementsbutwasauditedbythecomponentauditor,andshouldincludethemagnitudeNamingthecomponentauditor,onlyPermissionisThecomponentauditor’sreportispresentedwiththeauditor’sreportonthegroupfinancialISAsdonotpermittheauditor’sreportongroupfinancialstatementstomakereferencetoacomponentauditorunlessrequiredbylaworregulationModifiedopinionissuedbycomponentIftheopinionofthecomponentauditorismodifiedorthereportincludesanemphasis-of-matterorother-matter-paragrapthegroupauditorshoulddeterminetheeffectontheauditor’sreportonthegroupfinancialstatements.AssumptionofWhenthegroupengagementpartnerdecidestoassumeresponsibilityfortheworkofacomponentauditor,noreferencetthecomponentauditorshouldbemadebecausetodothatmaycausemisinterpretAdditionalrequirementswhenassumingSignificantduetoindividualfinancialAcomponentthatissignificantduetoindividualfinancialsignificanceshouldbeauditedbythegroupengagementteamthecomponentauditor.SignificantduetosignificantrisksofmaterialGroupengagementteamoracomponentauditorshouldperformanauditofthefinancialinformation,and/oranaudittheaccountbalances,transactionsordisclosuresrelatedtothelikelysignificantrisksofmaterialComponentsthatarenotThegroupengagementteamshouldperform yticalproceduresforcomponentsthatarenotsignificantcomponents.MARADVANCEDAICPATRAININGTYPESOFUnmodifiedAnunmodifiedopinionstatesthatthefinancialstatementspresentfairlyIncertaincircumstances,theauditormaydeterminethatitisnecessarytoaddadditionalcommunicationstotheauditor’sreportwithoutmodifyingtheauditor’sopinion.thisisdoneusingemphasis-of-matterandother-matterparagraphs.Modificationtotheauditor’sMateriallymisstated（GAAPissue）,Isunabletoobtainsufficientappropriateauditevidence（GAASissue）THETYPESOFOPINIONSB.QUALIFIEDOPINION（EXCEPTFOR）C.ADVERSEOPINIOND.DIEROFPassKey:Whentheauditorexpressesanadverseopinionoradierofopiniononthefinancialstatementsasawhole,theauditor’sreportshouldnotalsoincludeanunmodifiedopiniononasinglefinancialstatementoroneormorespecifelements,accounts,oritemsofafinancialstatement.issuingsuchanunmodifiedopinioninthesecircumstanceswouldcontradicttheadverseopinionsorthedierofopiniononthefinancialstatementsasawhole.D.Briefsummaryofwhentousedifferent1.Definitionofpervasive（new,importanttoEmphasis-of-matterandother-matterAnemphasis-of-matterparagraphisincludedintheauditor’sreportwhenrequiredbyGAASorattheauditor’sdiscretionanemphasis–of—matterparagraphisusedwhenreferringtoamatterthatisappropriaypresentedordisclosedinthefinancstatementsandisofsuchimportancethatitisfundamentaltotheusers’understandingofthefinancialofthefinancialstatements.Theinclusionofanemphasis-of-matterparagraphintheauditor’sreportdoesnotaffecttheauditor’sopinion.ReportAftertheDescribetheIndicatethattheauditor’sopinionisnotUseofEmphasis-of-MatterUseTheauditorconcludesthatthereissubstantialdoubtabouttheentity’sabilitytocontinueasagoingconcernforareasonableperiodoftimeTodescribeajustifiedajustifiedchangeinaccountingprinciplethathasamaterialeffectontheentity’sfinancialSubsequentlydiscoveredfactsleadtoachangeinauditopinion（theauditormayuseanemphasis-of-matterormatterparagraph,asThefinancialstatementsarepreparedinaccordancewithanapplicablespecialpurposeframework（otherthanregulatorybasisfinancialstatementsintendedforgeneraluse）UsemaybeAppropriaypresentedordisclosedinthefinancialstatementsandisofsuchimportancethatitisfundamentaltotheuser’sunderstandingMajorRelatedpartySubsequentReportcetheother–matterparagraphimmediayaftertheopinionparagraphandafteranyemphasis–of-matterUsetheheading“other-DescribethematterbeingemphasizedandtheUseofOther-MatterUseRestrictstheChangeinauditThefinancialstatementsofthepriorperiodwereauditedbyapredecessorauditorandthepredecessor’sauditreporisnotreissued.Currentperiodfinancialstatementsareauditedandpresentedincomparativeformwithcompiledorreviewedfinancialstatementsforthepriorperiod,orincomparativeformwithpriorperiodfinancialstatementsthatwerenotaudited,reviewedorcompiledIdentifiesamaterialinconsistencyinotherWhentheauditorchoosestoreportonsupplementaryinformationpresentedwiththefinancialstatementsintheauditor’sreport,ratherthaninaseparatereport.Torefertorequiredsupplementaryinformationthatadesignedaccountingstandardssetterrequiresto anentity’sbasicfinancialstatementsTorestricttheuseoftheauditor’sreportwhenspecialpurposefinancialstatementsarepreparedininwithacontractualofregulatorybasisofAreportoncomplianceisincludedintheauditor’sreportonthefinancialUsemaybeTodescribethereasonwhytheauditorcannotwithdrawfromanengagementwhentheauditorisunabletoobtainsufficientappropriateauditevidenceduetoamanagement–imposedscopelimitationLaw,regulation,orgenerally,acceptedpracticerequireorpermittheauditortoprovidefurtherexnationoftheauditor’sresponsibilitiesTheauditorhasbeenengagedtoreportonmorethanonesetoffinancialstatementswheneachsetofstatementshasbeenpreparedinaccordancewithadifferentgeneralpurposeframeworkAuditor’sconsiderationofanentity’sabilitytocontinueasagoingconcernmitigatingfactors.alleviationofemphasisofmatterVS. AuditorisnotprecludedfromchoosingtodianopinionduetoagoingconcernsampleemphasisofmatterThewordingoftheemphasis-of-matterparagraphmustincludetheterms“substantialdoubt”andgoingconcernNo1yrEmphasisofmatter panyingfinancialstatementshavebeenpreparedthatthe willcontinueasagoingconcern.AsdiscussedinNotextothefinancialstatements,the hassufferedrecurringlossesfromoperationsandhasanetcapitadeficiencythatraisesubstantialdoubtaboutitsabilitytocontinueasagoingconcern.Management’snsinregardtothesemattersarealsodescribedinNotex.ThefinancialstatementsdonotincludeanyadjustmentsthatmightresultfromtheofthisWithoutqualifyingouropinion,wedrawattentiontonotezinthefinancialstatementswhichindicatesthatthehassufferedrecurringlossesfromoperationsandhasanetcapitaldeficiencyofxxx.Theseconditions,alongwithothermattersassetforthinnotez,indicatetheexistenceofamaterialuncertaintywhichcastsignificantdoubtabout ’sabilitytocontinueasagoing ationU.SauditingstandardsvsinternationalstandardsonISAsrequiretheauditortoobtainwrittenrepresentationsfrommanagementregardingitsnsforfutureaction.U.S.auditingstandardsdonotcontainthisrequirement,althoughasamplegoingconcernrepresentationisincludedintheauthoritativerelatedtomanagementrepresentations.PassKey:Acommonlytestedareaistheconceptofgoingconcern.Thechartbelowsummarizestheeffectsofconcernissuesontheauditor’sGoingUnmodified

DiD.LackofConsistency（acceptable/justifiedchangesinaccountingConsistencydealswiththecomparabilityofthefinancialstatementfromyeartoyear.Unlesstheauditor’sreportexplicitlstatesotherwise,theauditor’sreportimpliesthatthefinancialstatementsarecomparablebetweenperiods.E.AlertThatRestrictstheUseoftheAuditor’sWrittenUseofthealertthatrestrictstheuseoftheauditor’swrittencommunicationIntheauditor’sreport,suchlanguageisincludedinanother-matterparagraph.measurementordisclosurecriteriathataresuitableforonlyalimitednumberofuserswhohaveanadequateunderstandingofthecriteria;measurementordisclosurecriteriathatareavailableonlytospecifiedparties;mattersidentifiedduringanauditengagementthatarenottheprimaryobjectiveoftheauditengagement（byContentoftheAstatementthattheauditor’swrittencommunicationisintendedsolelyfortheinformationanduseofthespecifiedIdentificationofthespecifiedpartiesforwhomuseisSampleothermatterParagraphThisreportisintendedsolelyfortheinformationanduseof[listorrefertothespecifiedparties]andisnotintendedtobeandshouldnotbeusedbyanyoneotherthanthesespecifiedparties.GAAPISSUES:QUALIFIEDORADVERSEQualifiedOpinionvs.AdverseNatureofMaterialAppropriatenessofAccountingAppropriatenessofF/SPresentationorFormandContentofAuditor’sModificationofAuditor’sResponsibilityWhentheauditorexpressesaqualifiedoradverseopinion,theAuditor’sResponsibilityParagraphshouldbeamendedtostatethattheauditorbelievethattheauditevidenceobtainedissufficientandappropriatetoprovideabasisfortheauditor’smodifiedauditopinion.BasisforModificationTheBasisforModificationparagraphshouldbecedimmediaybeforetheopinionparagraphandshouldusetheheading“BasisforQualifiedOpinion”or“BasisforAdverseopinion,”asappropriate.AdescriptionandqualificationofthefinancialeffectsofanyAnexnationofhowdisclosuresaremisstatedifthereisamaterialmisstatementrelatedtonarrativeAdescriptionofthenatureofomittedinformationandinclusionoftheomittedinformation,whenpracticable,ifthereianomissionofinformationthatisrequiredtobepresentedordisclosed.PassKey:Practicablemeansthattheinformationisreasonablyobtainablefrommanagement’saccountsandrecordsthatprovidingtheinformationintheauditor’sreportdoesnotrequiretheauditortoassumethepositionofaprepareroffinancinformation.Fg.,theauditorisnotexpectedorprepareabasicF/S,suchasanomittedstatementofcashflows,orsegmentinformationandincludeitintheauditor’sreportwhenmanagementomitssuchVI.GAASISSUES:QUALIFIEDORADVERSEVII.GAASB.CausesofScopeLimitationmayexistwhenanauditorwasnotengagedatthebeginningoftheyear,whenopeninginventoryshouldhavebeenobserved.Whencircumstancespreventtheauditorfromperformingaspecificprocedure,theauditorshoulddeterminewhetheritispossibletoperformalternativeprocedures.PassKey:Theinabilitytoperformaspecificprocedureisnotalimitationonthescopeoftheauditiftheauditorifauditorisabletoobtainsufficientappropriateauditevidencebyperformingalternativeprocedure.Ifalternativeprocedurescannotbeperformed,theauditorshouldexpressaqualifiedopinionoradierofopinion.Ifmanagementwillnotremovethelimitation,theauditorshouldcommunicatewiththosechargedwith ernanceanddeterminewhetheritispossibletoperformalternativeprocedures.undetectedmisstatementscouldbebothmaterialandpervasive,thentheauditorshouldeitherdianopinionwithdrawfromtheWithdrawmaynotbepossibleiftheauditorhassubstantiallycompletedtheaudit,oriftheauditisrequiredbylaworregulation.Theauditormaychoosetoaddanother-matterparagraphtotheauditor’sreporttodescribethereasonswhytheauditorcannotwithdrawfromanengagementwhentheauditorisunabletoobtainsufficientappropriateauditevidenceduetomanagement-imposedscopelimitationandthepossibleeffectsonthefinancialstatementofundetectedmisstatementcouldbebothmaterialandpervasive.U.S.AuditingstandardsVS.InternationalstandardsonISAsrequiretheauditortowithdrawfromtheauditwhentheauditorisunabletoobtainsufficientappropriateauditevidenceduetomanagement-imposedscopelimitationandtheauditconcludesthatthepossibleeffectsofanyundetectedmisstatementcouldbebothmaterialandpervasive.U.S.GAASrequiresthattheauditorconsiderwithdrawalfromtheengagementunderthesecircumstances.C.Formandcontentofauditor’sModificationofIntroductoryParagraph-DierOnlyauditorwasengagedtoauditthefinancialstatements.ModificationofAuditor’sResponsibilityauditorbelievesthattheauditevidenceobtainedissufficientandappropriatetoprovideabasisfortheauditor’squalifiedauditopinion. erofBecauseofthematter（s）describedinthebasisfordi erofopinionparagraph,however,wewerenotabletoobtsufficientappropriateauditevidencetoprovideabasisforanauditopinion.TheBasisforModificationparagraphshouldbecedimmediaybeforetheheading“QualifiedOpinion”or erofQualifiedOpinionintheauditor’sopinion,exceptforthepossibleeffectsofthematter（s）describedinthebasisforqualifiedopinionparagraph,thefinancialstatementsarepresentedfairly,inallmaterialrespects,inaccordancewiththeapplicablefinancialreportingframework.PassKey:Whentheauditorexpressaqualifiedopinionduetoscopelimitation,theopinionparagraphstatesthatthequalificationrelatestothepossibleeffectofthematteronthefinancialstatementsandnotthescopelimitationitself.Wordingsuchas,“Inouropinion,exceptfortheabove-mentionedlimitationonthescopeoftheaudit…”isnotacceptable.DierofOpinionbecauseofthesignificantofthematter（s）describedinthebasisfordierofopinionparagraph,theaudithasnotbeenabletoobtainsufficientappropriateauditevidencetoprovideabasisforanauditopinion;accordingly,theauditordoesnotexpressanopiniononthefinancialPassKey:Whentheauditorisnotindependentbutisrequiredbylaworregulationtoreportonthefinancialstatement,thauditorshoulddianopinionandshouldspecificallystatethattheauditorisnotindependent.Iftheauditorchoosestoprovidethereasonforthelackofindependent,theauditorshouldincludeallreasons.PassKey:Acommonlytestedareaistheconceptofuncertainty.Thechartbelowwillassistyouinmasteringthisarea.NoAndSufficient

Relatedtotheuncertainty

QualifiedorAdverse QualifiedorDierREPORTSONCOMPARATIVEFINANCIALSTATEMENTSEachUpdatecanmeanreaffirmoritcanmeanchangetheoriginalREPROTINGWITHDIFFERENTREPORTSONCOMPARATIVEFINANCIALPassKey:Whentheprioryear’sfinancialstatementswerenotauditedandthecurrentyear’sfinancialstatementsarebeinaudited,theauditorisinessencefacingascopelimitation.Thebeginningbalancesmaynotbeascertainableandthereforeadierofopiniononthestatements e,retainedearnings,andcashflowsmaybeUPDATINGPRIORStatementthattheopinionisPRIORPERIODFINANCIALSTATEMENTSAUDITEDBYAReportofthePredecessorAuditorReadthestatementforthecurrentComparethestatementsauditedwiththecurrentperiodObtainaletterofrepresentationfromthesuccessorInquireofandobtainaletterofrepresentationfromDatethereportasUnrevised:UsetheOriginalreportRevised:DualIV.PRIORPERIODFINANCIALSTATEMENTAUDITEDBYAReportofthePredecessorAuditorNotThesuccessorauditorshouldexpressanopiniononthecurrentperiodfinancialstatementsonlyandindicateinanother-matterparagraph:Thatthefinancialstatementsofthepriorperiodwereauditedbyapredecessorauditor.ThepredecessorauditornotbenamedunlessthepracticeofthepredecessorswasacquiredbyormergedwiththatoftheThetypeofopinionexpressedbythepredecessorauditorand,iftheopinionwasmodified,thereasonsfortheThenatureofanyemphasis-of-matterorother-matterparagraphincludedinthepredecessorauditor’sThedateofthepredecessorauditor’sV.PRIORPERIODF/SNOTPriorPeriodStatementsReviewedorCompiledAuditorshouldincludeanother-matterparagraphtheservice（revieworcompilation）performedinthepriorthedateofthepriorperiodadescriptionofanymaterialmodificationsdescribedintheastatementthattheservicewaslessinscopethananauditanddoesnotprovidethebasisforexpressinganopiniononthefinancialstatements.PriorPeriodStatementsNotAudited,ReviewedorTheauditor’sreportshouldincludeanother-matterparagraphtoindicatethattheauditordidnotaudit