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Sir, Just wanted to make sure,
The audit report will be unmodified in there is no emphasis of matter, or any going concern related issues in the notes of the company’s financial statements. The audit opinion will mention that the FS show a true and fair view.
The audit report will be modified (but not modified opinion) if the report mentions the emphasis of matter, or any going concern related issues in the notes. The audit opinion will mention that the FS show a true and fair view
The audit report and the opinion will be modified if the report contains emphasis of matter and any going concern related issues in notes. the audit report will show that the FS do not show a true and fair view / unable to obtain sufficient audit evidence.
Please correct me if I’m wrong here.
And does qualified and modified report or opinion mean the same thing?
Thanks
Your 3rd para is wrong and contradicts your second para. EoM and going concern paragraphs modify the report but not the opinion.
So, if the opinion is modified, in that case EoM and going concern paragraphs will not be included in the report?
It depends why the opinion is modified.
If the going concern problem is not mentioned in the FS, the FS do not show a T&F view so the opinion must be modified.
If the going concern problem is mentioned in the FS the FS do show a T&F view so the opinion is not modified. However, to draw user’s attention to the going concern problem there will be a going concern para in the audit report (not modifying the opinion).
There are three sorts of modified opinion:
Qualified: ie except for xxxxxxx teh FS show a true and fair view
Adverse: the FS do not show a T&F view
Disclaimer: we are unable to form an opinion on the FS.
In practice, in common speech, many people use ‘qualified’ to cover all types of modification, but you shouldn’t do that in the exam.
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