L2 Notes_Part_11 - Emphasis of A Matter Not Material...

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Auditor Agrees with a Departure from Promulgated Accounting Principles In unusual circumstances financial statements may be misleading if a promulgated accounting principle was followed. Rule 203 of the Code of Professional Conduct allows the auditor, in such circumstances, to issue an unqualified opinion. An explanatory paragraph should describe the departure, the approximate effects of the departure, if practicable, and the reasons that compliance with the accounting principle results in misleading financial statements.
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Summary of Appropriate Auditor’s Reports Materiality of the issue Standard Unqualified Problems as to GAAP or Disclosure Scope Limitation GAAP not Consistent Shared Responsibility
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Unformatted text preview: Emphasis of A Matter Not Material Uncertainty Justified Departure from GAAP Qualified Except for Qualified Except for Unqualified with Explanatory Language Adverse Disclaimer Material Very Material Appropriate Opinion Judgment Inform NonGAAP, disclosures inadequate Scope restriction (client imposed?) Independence Other Auditor Matter needs emphasis, inconsistency, going concern, GAAP not enough Materiality level Current Situation faced by Auditor Appropriate Opinion How Many Cues? How much evidence? = f(information search costs, availability, audit and engagement risk) What kind of evidence? When to collect? What weight to put on each cue? Auditor’s Judgment Reality Auditor Environment...
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This note was uploaded on 10/05/2011 for the course ACG 5637 taught by Professor Monikacaushoulli during the Fall '08 term at University of Florida.

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L2 Notes_Part_11 - Emphasis of A Matter Not Material...

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