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Chpt 17: Auditors’ Reports
Comparative financial statements
: Encouraged by the AICPA; required by SEC
Public companies must include 2 years of BS, and related 3 years of IS, RE, and CF
[Auditors’ Report for Nonpublic company—Standard unqualified opinion on comparative
Only wording in square below appears in the report
Independent Auditor’s Report
TO: The Board of Directors and Shareholders of XYZ Company:
We have audited the accompanying balance sheets of XYZ Company as of December 31, 2009 and 2008,
and the related statements of income, retained earnings, and cash flows for each of the three years in the
period ended December 31, 2009. These financial statements are the responsibility of the Company's
management. Our responsibility is to express an opinion on these financial statements based on our audit.
We conducted our audit in accordance with auditing standards generally accepted in the United States of
America. Those standards require that we plan and perform the audit to obtain reasonable assurance about
whether the financial statements are free of material misstatement. An audit includes examining, on a test
basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by management, as well as
evaluating the overall financial statement presentation. We believe that our audit provides a reasonable
basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in all material respects, the
financial position of XYZ Company as of December 31, 2009 and 2008, and the results of its operations
and its cash flows for each of the three years in the period ended December 31, 2009 in conformity with
accounting principles generally accepted in the United States of America.
Winkon, Blinkon, & Nod
Certified Public Accountants
August 31, 20XX
Remember from chapter 2 what is in each paragraph of the opinion (Introductory,
scope, and opinion ¶. )
Opinion Paragraph – “fairly presented, in all material respects, in accordance with
accounting principles generally accepted in the United States.” Stated as an
fact). Reporting standards incorporated in this paragraph.
Unqualified opinion can be issued only if