Other types of audit reports for an audit report to

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Unformatted text preview: the opinion paragraph contains the phrase “in all material respects,” emphasizing the concept of materiality. Note that the scope paragraph indicates how the audit was conducted— in accordance with the standards of the PCAOB because EarthWear is a publicly traded company. Audit reports for nonpublic companies refer instead to “generally accepted auditing standards.” At the same time, the opinion paragraph indicates the auditor’s opinion as to whether the financial statements are fairly presented in accordance with the criteria against which they were audited — in this case GAAP. The fourth paragraph contains explanatory language. As shown in Exhibit 1–1, when the auditor’s opinion on a public company’s financial statements is presented separately from the auditor’s report on the client’s internal control over financial reporting, as is the case here, the report must refer to the audit of internal control in an explanatory paragraph. The financial statement audit report concludes with the manual or printed signature of the CPA firm p...
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