these combinations and indicate which combination is likely to be most

These combinations and indicate which combination is

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these combinations and indicate which combination is likely to be most difficult to understand for a financial statement user. Verspreiden niet toegestaan | Gedownload door Jan BUllens ([email protected])lOMoARcPSD
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19 When the auditor feels that the management’s assertions about internal control over financial reporting are fairly stated in all material respects he will give an unqualified opinion. Otherwise the auditor will give an adverse opinion. When the auditor’s opinion of internal control is adverse if he concludes that internal control over financial reporting is effective in all material respects. Otherwise the auditor will give an adverse opinion. Management’s assessment of controls Auditor’s test of effectiveness show Report being issued on management’s assertions about the effectiveness of internal control Report to be issued concerning auditor’s opinion of actual effectiveness of internal control No material weaknesses No material weaknesses Unqualified Unqualified No material weaknesses Material weakness Adverse Adverse Material weakness Material weakness Unqualified Adverse This results in 5 reporting options: Unqualified/adverse is the hardest combination to understand. Because the auditor cannot see what exactly is causing the material limitations. To perform an integrated audit, an auditor must evaluate management’s assessment of internal control over financial reporting. To accomplish this task, auditors evaluate management’s process to identify, documenting and testing controls, including communication and remediation of identified No material misstatement in assertions or disclosures Auditor standard unqualified report No material misstatements; auditor emphasis of special conditions Auditors standard report with emphasis of matters/explanatory paragraph Material departure from GAAP Qualified auditor’s report Unqualified/AdversePervasive departures from GAAP Adverse auditor’s report Adverse/AdversePervasive limitations on audit evidence caused by audit conditions or material limitations on audit evidence caused by client Denial of opinion/Disclaimer Adverse/AdverseMaterial limitations on audit evidence caused by audit conditions Qualifed auditor’s report Unqualified/AdverseVerspreiden niet toegestaan | Gedownload door Jan BUllens ([email protected])lOMoARcPSD
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20 deficiencies. Why do you believe that auditors should be required to make this evaluation if they also are required to assess the effectiveness of internal controls based on their own tests and assessments? The better the assessment of the management and the auditor match, the better the internal control over financial reporting and the less trouble to expect with examining the financial statements provided by the management.
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