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The way I try to remeber the difference between an Modified and Unmodified Audit Report is:
An Unmodified Report = A good report, I.e the financial ststaments give a true & fair view.
Modified – Something is not quite right and the auditor will further explain what this is.
That’s not quite right. An unmodified report is certainly ‘good’ meaning that the FS show a T&F view.
Modified reports (any change to an unmodified report) are of two classes:
1 Emphasis of matter: the report refers users to a matter and a note in the FS that the auditor wants to draw attention to: BUT HIS IS NOT A CRITICISM OF THE ACCOUNTS because the nature of the matter is disclosed in the notes. So, the accounts are as good as they could be.
2 Qualification: the report criticises the FS either because they contain a material misstatement or because the auditor has been unable to collect sufficient appropriate audit evidence.
No.
If there ia a material misstatement the audit report will either be an ‘except for…’ or that the accounts do not show a true and fair view (adverse).
If there is insufficient audit evidence, the audit report will either be and ‘except for…’ or ‘we are unable to form an opinion’ (disclaimer)
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