Audit Reporting, Opinion Types, and Explanatory Language

This chapter covers the main financial statement reporting outcomes in AUD. The key question is what the report should say once the evidence has been evaluated and whether any issue requires modification, emphasis, or special treatment.

In This Chapter

• Choosing Among Unmodified, Qualified, Adverse, and Disclaimer Opinions explains how auditors select the right opinion based on scope and GAAP issues.
• Using Emphasis-of-Matter and Other-Matter Paragraphs in Audit Reports covers explanatory language that does not always change the opinion itself.
• Reporting on Comparative Financial Statements and Predecessor Auditors addresses multi-period reporting complications.
• Addressing Supplementary and Other Information in Audit Reporting covers responsibilities beyond the core financial statements.
• Responding to Omitted or Inconsistent Required Disclosures explains how disclosure problems affect the report.

How to Use This Chapter

• Read this chapter carefully if reporting questions blur together once the opinion changes.
• Focus on what changes the opinion versus what adds explanatory language around the opinion.
• Revisit it whenever an AUD miss turns on opinion type, paragraph placement, or disclosure-related reporting consequences.

In this section

• Choosing Among Unmodified, Qualified, Adverse, and Disclaimer Opinions
  How auditors choose among unmodified, qualified, adverse, and disclaimer opinions.
• Using Emphasis-of-Matter and Other-Matter Paragraphs in Audit Reports
  How emphasis-of-matter and other-matter paragraphs change audit report wording without always changing the opinion.
• Reporting on Comparative Financial Statements and Predecessor Auditors
  How auditors report on comparative financial statements and handle predecessor-auditor involvement.
• Addressing Supplementary and Other Information in Audit Reporting
  How auditors address supplementary information and other information presented with audited statements.
• Responding to Omitted or Inconsistent Required Disclosures
  How omitted or inconsistent required disclosures affect report modification and wording.