Chapter _18, Audit Reports

Chapter _18, Audit Reports - Standards of Reporting(GCDO...

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Standards of Reporting (“GCDO”) GAAP : The auditor must state in the auditor’s report whether the financial statements are presented in accordance with generally accepted accounting principles (GAAP). Consistency : The auditor must identify in the auditor’s report those circumstances in which such principles have not been consistently observed in the current period in relation to the preceding period. Disclosure : When the auditor determines that informative disclosures are not reasonably adequate, the auditor must so state in the auditor’s report.
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Standards of Reporting (continued) Opinion : The auditor must either express an opinion regarding the financial statements, taken as a whole, or state that an opinion cannot be expressed, in the auditor’s report. When the auditor cannot express an overall opinion, the auditor should state the reasons therefore in the auditor’s report. In all cases where an auditor's name is associated with financial statements, the auditor should clearly indicate the character of the auditor's work, if any, and the degree of responsibility the auditor is taking, in the auditor’s report.
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“Taken as a Whole” 3 Meanings of “taken as a whole” in 4th Reporting Standard of GAAS: Can mean an individual F/S (e.g., the balance sheet -- a “limited reporting engagement”) Can mean the whole set of current year’s F/S Can mean the whole set of comparative F/S “Piecemeal opinions” are forbidden! (Cannot express different conclusions about selected elements of the F/S than expressed for the F/S taken as a whole)
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What Do Auditors Mean by “GAAP”? ==> GAAP Hierarchy (Non-Governmental Entities) Established Principles”: 1. FASB Statements & FASB Interpretations, APB Opinions, and CAP’s ARB’s [“authoritative”] 2. FASB Technical Bulletins, AICPA Industry Audit & Acctg. Guides, AICPA Statements of Position 3. Consensus positions of EITF and AICPA Practice Bulletins 4. AICPA accounting interpretations, Q&A’s published by FASB staff, and other “widely recognized and
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Chapter _18, Audit Reports - Standards of Reporting(GCDO...

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