WP%2017%20Auditors%20reports%20students

WP%2017%20Auditors%20reports%20students - Chpt 17:...

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1 of 10 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 financial statements] [ 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 Boulder, Colorado August 31, 20XX ¾ 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 OPINION (not a fact). Reporting standards incorporated in this paragraph. Other Matters Unqualified opinion can be issued only if 1. 2.
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2 of 10 Materiality in FS: A misstatement in the financial statements can be considered material if knowledge of the misstatement would affect a decision of a reasonable user of the statements. 1. Immaterial - Misstatement may exist, but is unlikely to affect the decision of a reasonable user. 2.
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WP%2017%20Auditors%20reports%20students - Chpt 17:...

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