The Seven Parts of a Standard Unqualified Audit Report

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1. Report title: Auditing standards require that the report be titled and that the title includes the word independent. 2. Audit report address: The report is usually addressed to the company, its stockholders, or the board of directors. 3. Introductory paragraph: The first paragraph of the report does three things: first, it makes the simple statement that the CPA firm has done an audit. Second, it lists the financial statements that were audited, including the balance sheet dates and the accounting periods for the income statement and statement of cash flows. Third, it states that the statements are the responsibility of management and that the auditor's responsibility is to express an opinion on the statements based on an audit. 4. Scope paragraph: The scope paragraph is a factual statement about what the auditor did in the audit. The purposes of the scope paragraph in the auditor's report are to inform the financial statement users that the audit was conducted in accordance with generally accepted auditing standards, in general terms what those standards mean, and whether the audit provides a reasonable basis for an opinion. The information in the scope paragraph includes: . The auditor followed generally accepted auditing standards. . The audit is designed to obtain reasonable assurance about whether the statements are free of material misstatement. . Discussion of the audit evidence accumulated. . Statement that the auditor believes the evidence accumulated was appropriate for the circumstances to express the opinion presented. 5. Opinion paragraph: The final paragraph in the standard report; opinion paragraph states the auditor's conclusions based on the results of the audit. It also states the auditor's conclusions based upon the results of the audit evidence. However the most important information in the opinion paragraph

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