Auditor’s Report-Response

Posted: August 26th, 2021

Auditor’s Report-Response

Name

Institutional Affiliation

Auditor’s Report-Response

Response #1

The response answers the question appropriately by expounding on the definitions and reasons that auditors give when explaining the modifications of the audit report. Modified opinions are the audit opinions issued to financial statements,especially when those statements are not prepared in accordance with particular financial standards(Robertson & Louwers, 1999). The response does not exhaustively identify these opinions, leaving out their respective types. Practically, there three types of modified opinions categorized based on the level of pervasiveness, misstatements, and sufficiency of the available audit evidence. The categorization is in accordance with the International Standards of Auditing (ISA) 705(AICPA, 2013). These opinions are adverse audit, qualified audit and disclaimer audit opinions. At the same time, reasons for providing such modifications for further explanations include explaining the nature of the financial statements and information on the integrity of the organization’s management. The response fails to address this last part, only limiting the reader to the first part.

Response #2

An audit report is meant to show the health state of an organization’s financial health. It gives a summary of the findings that the auditor has attained. It is categorized under similar components that built up the audit procedures(Robertson & Louwers, 1999). The report should contain the opinion of the auditor formed during auditing, stating whether the reports received a qualified or unqualified opinion if the internal accounting and financial statements have passed. All this information is found under introductory, financial and required supplemental as well as findings and recommendation sections(Robertson & Louwers, 1999). The report closes with a section presenting the auditor’s signature. A signature binds the auditor to the report, which implies he would be accountable for the report until a given time or date as stated in the title. The response has adequately exhausted the question, highlighting particular areas that the information can be found.

References

AICPA. (2013). Understanding the responsibilities of auditors for audits of group financial statements, 2013. New York, NY: American Institute of Certified Public Accountants.

Robertson, J. & Louwers, T. (1999). Auditing. Boston: Irwin/McGraw-Hill.