Audit report the second paragraph states the

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Unformatted text preview: esponsibility to express an describes management’s responsibility for internal opinion the financial control, application of statements. accounting principles, and making estimates. 3-33 (continued) Seven Distinct Parts of Standard Audit Report a. Description of 9-45 b. Different Elements Similar Elements in the Les Meridian Auditor’s Report 4. Scope paragraph. The scope paragraph is a factual statement about what the auditor did in the audit. The remainder briefly describes important aspects of an audit. The third paragraph identifies the auditing standards used to conduct the audit, similar to the standard audit report. in Les Meridian Auditor’s Report The third paragraph notes that the auditor conducted the audit in accordance with ISAs, rather than U.S. GAAS. Like the standard audit The third paragraph notes that report, the third paragraph the auditor is required to notes that the auditor obtains comply with ethical reasonable assurance about requirements. whether the financial statements are free of material misstatements. The fourth paragraph also contains information related to other elements in the scope paragraph in the standard audit report. For example, the fourth paragraph describes the auditor’s evaluation of accounting principles/ policies used, estimates made, and the overall presentation, similar to the scope paragraph in the standard audit report. The fifth paragraph acknowledges that the auditor believes the evidence obtained provides a sufficient basis for the opinion, similar to the last sentence of the scope paragraph of the standard audit report. The fourth paragraph contains more information than the standard audit report about the auditor’s need to make judgments, the auditor’s consideration of risks and internal control, and the fact that the risk and control assessments are not sufficient to express an opinion on internal control. The fourth paragraph also explicitly notes that risks of material misstatements due to error or fraud are considered. 3-33 (continued) Seven Distinct Parts of Standard Audit Report 5. Opinion paragraph. The a. Description of Similar Elements in the Les Meridian Auditor’s Report b. Different Elements in Les Meridian Auditor’s Report The last paragraph includes The wording associated with 9-46 final paragraph in the standard report states the auditor's conclusions based on the results of the audit. 6. Name of CPA firm. The name identifies the CPA firm or practitioner who performed the audit. the auditor’s opinion about the financial statements and acknowledges the accounting principles used as the basis of presentation. the opinion notes that the auditor’s opinion is about the “true and fair view” of the financial statements, rather than the financial statements “present fairly” as stated in the standard audit report. The name of the CPA is included. The date that the audit is 7. Audit report date. The completed is provided appropriate date for the below the firm’s signature. report is the end of fieldwork, when the auditor has gathered sufficient appropriate evidence to support the opinion. Internet Problem Solution: Research Annual Reports 3-1 The U.S. Securities and Exchange Commission (SEC) makes available in electronic form via the Internet most of the forms and reports it receives from publicly traded companies through EDGAR. This problem explores information available on the SEC’s Web site. 1. The EDGAR Web site describes many SEC-required forms. Find and describe the following SEC forms: Answer: Form 8-K - This is the form that must be filed whenever a registrant encounters a significant event (e.g., a change in control of ownership, disposition or acquisition of a significant amount of assets, filing for bankruptcy, change in independent auditors). 9-47 Internet Problem 3-1 (continued) Form 10-K - This is the annual report that most reporting c ompanies file with the Commission. It provides a comprehensive overview of the registrant's business. The report must be filed within 60-90 days after the end of the company's fiscal year. This form is required by the Securities Exchange Act of 1934. Form 10-KSB - This is the annual report filed by reporting "small business issuers." It provides a comprehensive overview of the company's business, although its requirements call for slightly less detailed information than required by Form 10-K. The report must be filed within 90 days after the end of the company's fiscal year. 2. Search EDGAR for the 10-K filings of the three companies listed below. Within the 10-K filings locate the independent auditor's report and identify what type of opinion it is (e.g., unqualified, qualified, disclaimer, adverse) and what type of explanatory paragraph, if any, the opinion contains (e.g., consistency, going concern, emphasis). (Hint: You may be able to search the company’s 10-K by using the Internet browser's "Find" command typically located in the "Edit" menu.) Answer:...
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