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Unformatted text preview: misstatement identiﬁed by the
auditor. If the misstatement is considered so material that it pervasively affects
the interpretation of the ﬁnancial statements, the auditor will issue an adverse
opinion, indicating that the ﬁnancial statements are not fairly stated and should
not be relied upon. Other types of reports are available to the auditor as well,
depending on the circumstances. While it is important for you to be familiar
with the basic components of the audit report as part of understanding an overview of the audit process, we cover the different types of ﬁnancial statement
audit reports in detail in Chapter 18. Our experience is that students ﬁnd it more
intuitive to learn the fundamental concepts of auditing and how an audit is conducted before being immersed in the details of audit reporting.
The audit report represents the culmination of the audit process and is the
auditor’s primary venue for communicating his or her opinion about a client’s
ﬁnancial statements with outside parties. An example of an unqualiﬁed audit
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