In this chapter, the learning objectives are: Know the situations that result in the addition of explanatory language to the standard unqualified audit report, be able to explain the conditions that lead to a departure from the standard unqualified/unmodified audit report,. | Reports on Audited Financial Statements Chapter Eighteen Audit Report with an Unmodified Opinion The audit report with an unmodified opinion is issued when the financial statements conform to the applicable financial reporting framework. Nine Elements Report title Addressee Introductory paragraph Management’s responsibility Auditor’s responsibility Auditor’s opinion Auditor’s signature Audit report date Auditor’s address Audit Report with an Unmodified Opinion Emphasis of Matter Paragraph and Other Matter Paragraph An emphasis of matter paragraph does not affect the auditor’s opinion because it can only be included in the audit report if the matter is appropriately presented or disclosed in the financial statements. An other matter paragraph does not affect the auditor’s opinion because it relates to a matter other than those required to be presented or disclosed in the financial statements. Emphasis of Matter Paragraph A matter, although appropriately presented or disclosed in the financial statements, that is of such importance that it is fundamental to users’ understanding of the financial statements The emphasis of matter paragraph is included immediately after the opinion paragraph in the audit report and the heading ‘Emphasis of Matter’ is ordinarily used. The paragraph includes a clear reference to the matter being emphasized and to where relevant disclosures that fully describe the matter can be found in the financial statements. The auditor should indicate that the auditor’s opinion is not modified in respect of the matter emphasized. Emphasis of Matter Paragraph for Going-Concern Problems Emphasis of Matter Paragraph An emphasis of matter paragraph is used only if the matter is of such importance that it is fundamental to users’ understanding of the financial statements. Auditing standards give these examples: An uncertainty relating to the future outcome of exceptional litigation or regulatory action. Early application (where permitted) of a new . | Reports on Audited Financial Statements Chapter Eighteen Audit Report with an Unmodified Opinion The audit report with an unmodified opinion is issued when the financial statements conform to the applicable financial reporting framework. Nine Elements Report title Addressee Introductory paragraph Management’s responsibility Auditor’s responsibility Auditor’s opinion Auditor’s signature Audit report date Auditor’s address Audit Report with an Unmodified Opinion Emphasis of Matter Paragraph and Other Matter Paragraph An emphasis of matter paragraph does not affect the auditor’s opinion because it can only be included in the audit report if the matter is appropriately presented or disclosed in the financial statements. An other matter paragraph does not affect the auditor’s opinion because it relates to a matter other than those required to be presented or disclosed in the financial statements. Emphasis of Matter Paragraph A matter, although appropriately presented or disclosed in the .
