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Refer to the Kaplan 2010 edition, chapter summary, the table for EoM is classified as :
MODIFIED REPORT -> UNQUALIFIED REPORT -> EMPHASIS OF MATTERBut then the text said EoM do not effect the audit opinion. But why classified as modified report?
An unmodified report is the ‘standard’ one. That can then be modified in two ways:
1 Emphasis of matter, where the report points out something properly disclosed in the FS that users should be aware of. This is NOT a qualified report or qualified opinion.
2 A qualified opinion (often referred to as a qualified report), where the auditor is unhappy with the FS and disclosures either because the auditor believes they include a material misstatement or the auditor has been unable to get sufficient appropriate audit evidence.
Remember, MODIFIED is a neutral term just meaning ‘changed’. A qualified report (or opinion) means that there is something wrong or might be something wrong.
Thanks, finally i understand…
Modified report != modified/qualified opinion, they are different things.
So in short EoM is Modified report but with unqualified opinion.
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modified opinion will be given on
1)@the going concern of the entity
2)if there is any court case is going on in the company
3)if the mgt director report says that the company is making profit when the company is making the loss.
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