The Audit Report Was Timely, but at What Cost - 18721 Words

CHAPTER AUDIT REPORTS THE AUDIT REPORT WAS TIMELY, BUT AT WHAT COST? 3 LEARNING OBJECTIVES After studying this chapter, you should be able to 3-1 Describe the parts of the standard unqualiï ¬ ed audit report. Specify the conditions required to issue the standard unqualiï ¬ ed audit report. Understand combined reporting on ï ¬ nancial statements and internal control over ï ¬ nancial reporting under Section 404 of the Sarbanes–Oxley Act. Describe the ï ¬ ve circumstances when an unqualiï ¬ ed report with an explanatory paragraph or modiï ¬ ed wording is appropriate. Identify the types of audit reports that can be issued when an unqualiï ¬ ed opinion is not justiï ¬ ed. Explain how materiality affects audit reporting decisions. Draft appropriately modiï ¬ ed audit†¦show more content†¦The audit report is the ï ¬ nal step in the entire audit process. The reason for studying it now is to permit reference to different audit reports as evidence accumulation is studied throughout this text. These evidence concepts are more meaningful after you understand the form and content of the ï ¬ nal p roduct of the audit. We begin by describing the content of the standard auditor’s report. STANDARD UNQUALIFIED AUDIT REPORT To enable users to understand the language of audit reports, AICPA professional standards provide uniform wording for the auditor’s report, as illustrated in the auditor’s standard unqualiï ¬ ed audit report in Figure 3-1. Different auditors may alter the wording or presentation slightly, but the meaning will be the same. Parts of Standard Unqualiï ¬ ed Audit Report OBJECTIVE 3-1 Describe the parts of the standard unqualiï ¬ ed audit report. The auditor’s standard unqualiï ¬ ed audit report contains seven distinct parts, and these are labeled in bold letters in the margin beside Figure 3-1. 1. Report title. Auditing standards require that the report be titled and that the title include the word independent. For example, appropriate titles would be â€Å"independent auditor’s report,† â€Å"report of independent auditor,† or â€Å"independent accountant’s opinion.† The requirement that the title include the word independent is intended to convey to users that the audit was unbiased in all aspects. 2. AuditShow MoreRelatedWorldcom s Management Team : A Lack Of Professional Skepticism1640 Words   |  7 Pages2) WorldCom’s management team was hesitant to communicate with Arthur Andersen, this an issue that revealed a lack of professional skepticism that Andersen exercised. There are many examples and observations that show a lack of professional skepticism shown by Anders en. 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