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Unformatted text preview: misstatements
are judged to be material, the auditor will request that the client correct the misstatements. If the client refuses, the auditor issues an opinion that explains that
the ﬁnancial statements are materially misstated. If the uncorrected misstatements do not cause the ﬁnancial statements to be materially misstated, or if the
client is willing to correct the misstatements, the auditor issues an unqualiﬁed
(i.e., “clean”) report. The Unqualiﬁed/Unmodiﬁed Audit Report
The unqualiﬁed audit report is by far the most common type of report issued.9
In this context, unqualiﬁed means that, because the ﬁnancial statements are free
of material misstatements, the auditor does not ﬁnd it necessary to qualify his or
her opinion about the fairness of the ﬁnancial statements. While it is fairly common for the auditor to ﬁnd misstatements needing correction, audit clients are
almost always willing to make the adjustments necessary to receive a clean opinion. Exhibit 1–1 presents an audit report issued on EarthWear Clothier’s ﬁnancial
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This note was uploaded on 12/08/2012 for the course ACCT 564 at Washington University in St. Louis.