Financial Statement Auditing
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The financial statement audit report concludes with the manual or printed signature of the CPA firm providing the audit and with the date of the report. The audit report date indi- cates the last day of the auditor’s responsibility for the review of significant events that have occurred after the date of the financial statements.
Other Types of Audit Reports For an audit report to be unqualified, the audit must be done in accordance with applicable standards (e.g., the standards of the PCAOB), the auditor must be independent, there must be no significant limitations imposed on the auditor’s procedures, and the client’s financial state- ments must be free of material departures from GAAP. If any one of these conditions is not met, the auditor issues a report that appropriately conveys to the reader the nature of the report and the reasons why the report is not unqualified.
For example, suppose a client’s financial statements contain a misstatement that the audi- tor considers material and the client refuses to correct the misstatement. The auditor will likely qualify the report, explaining that the financial statements are fairly stated except for the misstate- ment 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.
The Auditor’s Standard Unqualified Report–Comparative Financial Statements (with explanatory paragraph)