3-6
For 2014-2017
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3-7
Key Points
➢ The components of the standard unqualified audit report (标准无保留意见)
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3 - 11
Auditor’s responsibility
注册会计师的责任
The first paragraph states that the auditor’s responsibility is to ewacxacpsercepostesnddanuincottpehdieniiUnonSa.coRcneoatrhsdoeannfnicAnoeatswsnaucigtriahaulnaascruteaadn(ti合etteimn理egen保sttas证nadn)adrdthsagtetnheeraalulydit
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Types of Audit Report
How to write?
When to issue? Audit Report
3-5
Yearly Distribution of Qualified Opinion in China
Around 90% ~ 95% listed firms in China got unqualified opinion
each year. 无保留意见加解释说明段
7.0%
Unqualified w Emphasis
This paragraph also notes that the audit is designed to obtain reasonable assurance about whether the financial statements are free of material misstatement. The inclusion of the word material conveys that auditors are only responsible to search for significant misstatements, not minor misstatements that do not affect users’ decisions.
The use of the term reasonable assurance is intended to indicate that an audit cannot be expected to completely eliminate the possibility that a material misstatement will exist in the financial statements. In other words, an audit provides a high level of assurance, but it is not a guarantee.
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3Audit Report Address
To the Board of Directors and Stockholders
➢ The five circumstances when an unqualified report with an explanatory paragraph or modified wording (无保留 意见加解释说明段) is appropriate
➢ The circumstances when an qualified report / disclaimer is appropriate (保留意见/无法表示意见)
Unqualified
标准无保留
Unqualified W Explanatory Paragraph 标准无保留 加解释说明段
Qualified 保留意见
Disclaimer
无法表示意见
Adverse
否定意见
Clean Opinion
Modified Opinion
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Audit Reports
Chapter 3
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3-1
Up to Now
Financial Statements
6.0%
5.6% 5.8% 保5.留7% 意见Qualified
5.0% 5.0%
4.2%
4.0%
3.8%
5.0%
4.6%
无法表示意见Disclaime4r.0% 3.9%
3.0% 2.0% 1.0% 0.0%
2.0%
2.0%
2.4% 2.0%
2.8%
2.3%
1.1% 0.9%
1.11%.0%
1.1% 0.8%
➢ How materiality affects audit reporting decisions.
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3-8
Learning Objective
Describe the parts of the standard unqualified audit report (标准无保留意见).
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3-4
Unqualified Opinion with Emphasis of Matter: Change of Accounting Method
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Misstatements
Audit Evidence
审计证据
Shan©g2h0a12i PUeanrsivoneErsduitcyatioonf, FAuindiatinngc1e4/ea, AnrdensE/Ecldoenr/Boemasilecys
Provide Assurance
Audit Opinion
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Parts of the Standard Unqualified
(Unmodified) Audit Report
3-9
Parts of the Standard Unqualified Audit Report
1. Report title (标题) 2. Audit report address (收件人) 3. Introductory paragraph (引言段) 4. Scope paragraph (范围段) 5. Opinion paragraph (意见段) 6. Name of CPA firm (事务所名称) 7. Audit report date (报告日期)
1.2% 0.3%
0.8% 0.2%
0.6% 0.1%
0.9% 0.2%
2004
2005
2006
2007
2008
2009
Year
2010
2011
2012
2013
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➢ A)An unqualified opinion or adverse opinion. ➢ B)A qualified ‘except for’ opinion or disclaimer opinion. ➢ C)A qualified ‘except for’ opinion or adverse opinion. ➢ D)An unqualified opinion with an explanatory paragraph.
The appropriate date for the report is the one on which the auditor completed the auditor procedures. The last day of auditor’s responsibility to search for material transactions and events.