A1-M4-Unmodified (Unqualified) Opinion

The introductory paragraph indicates the natured of the engagement [i.e.,audit], the financial statement covered in the [audit] engagement,

The name of the entity whose financial statements have been audited , and the dates covered by each financial statements.

Auditor's Responsibility Accordingly, we express no such opinion. An audit also includes evaluating the appropriateness of accounting policies used and

the REASONABLENESS of significant ACCOUNTING estimates made by MANAGEMENT, as well as EVALUATING the overall presentation of the financial statements.

Under U.S. Auditing Standards, the auditor's audit report includes a statement that

"An audit includes evaluating.......significant estimates made by management......"

The basic elements of the unqualified audit opinion (issuer) are the following: Title:

"Independent" (auditor's report) must be included in the report title.

Contents of the Audit Report The basic elements of the unmodified audit opinion (nonissuer) are the following: Auditor's Responsibility Section The auditor's report should include a section with the heading "Auditor's RESPONSIBILITY" that includes:

(1) A statement that responsibility of the auditor is to EXPRESS an opinion on the financial statements based on the audit. (2) A statement that the audit was conducted in accordance with auditing standards generally accepted in the United States of America.

Contents of the Audit Report The basic elements of the unmodified audit opinion (nonissuer) are the following: Management's Responsibility Section The auditor's report should include a section with the heading "MANAGEMENT'S RESPONSIBILITY for the Financial Statements" that includes:

(1) An explanation that management is responsible for the preparation and fair presentation of the financial statements in accordance with the applicable financial reporting framework; and

The basic elements of the unqualified audit opinion (issuer) are the following: Introductory Paragraph: The introductory paragraph contains the following:

(1). A statement that the financial statements as identified in the report were audited. (2). A statement that the financial statements are the RESPONSIBILITY of management and that the auditor's RESPONSIBILITY is to express an opinion.

Contents of the Audit Report The basic elements of the unmodified audit opinion (nonissuer) are the following: Introductory Paragraph The introductory paragraph should:

(1). Identify the entity whose financial statements have been audited; (2). State that the financial statements have been audited. (3)Identify the title of each financial statement; and (4)Specify the date(s) or period(s) covered by each financial statement.

Contents of the Audit Report The basic elements of the unmodified audit opinion (nonissuer) are the following: Management's Responsibility Section The auditor's report should include a section with the heading "MANAGEMENT'S RESPONSIBILITY for the Financial Statements" that includes: (2)

(2) A statement that this responsibility includes the DESIGN, IMPLEMENTATION, AND MAINTENANCE of internal control relevant to the preparation and fair presentation of financial statements that are free from material misstatement, whether due to fraud or error.

The basic elements of the unqualified audit opinion (issuer) are the following: Opinion Paragraph: The opinion paragraph of the report contains the following: (1) A statement referring to the financial statements specifically identified in the introductory paragraph.

(2) An opinion as to the fair presentation of the financial statements. (3) A statement regarding conformity with the United States generally accepted accounting principles.

The basic elements of the unqualified audit opinion (issuer) are the following: Reporting Date. The date of the audit report must be included in the report.

(2) The report date shows the final date of the auditor's responsibility. (3) For comparative statements, the date appropriate for the most recent audit should be used.

Contents of the Audit Report The basic elements of the unmodified audit opinion (nonissuer) are the following: Auditor's Responsibility Section The auditor's report should include a section with the heading "Auditor's RESPONSIBILITY" that includes:(2)

(3) A statement that those standards require that the auditor PLAN and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement.

Contents of the Audit Report The basic elements of the unmodified audit opinion (nonissuer) are the following: Auditor's Responsibility Section The auditor's report should include a section with the heading "Auditor's RESPONSIBILITY" that includes:(4)

(5). A statement whether the auditor believes that the audit evidence obtained is sufficient and appropriate to provide a basis for auditor's opinion.

Date of the Auditor's Report The auditor's report should be dated no earlier than the date on which the auditor has obtained sufficient appropriate audit evidence on which to base the auditor's opinion on the financial statements, including evidence that:

(a). The audit documentation has been reviewed. (b). All the financial statements, including the related notices, have been prepared; and (c). Management has asserted that it has taken responsibility for those financial statements.

Contents of the Audit Report The basic elements of the unmodified audit opinion (nonissuer) are the following: Other Reporting Responsibilities (2)

(b) If the audit report contains a separate section on other reporting responsibilities, the other sections of the audit report already described should be under the subtitled "report on the financial statements."

The auditor's report should include a section with the heading "Auditor's RESPONSIBILITY" that includes: (4). A description of the audit that states: (a). An audit involves PERFORMING procedures to OBTAIN audit evidence about the amounts and disclosures in the financial statements.

(b) The procedures selected depend on the auditor's judgement, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error.

The auditor's report should include a section with the heading "Auditor's RESPONSIBILITY" that includes: (4). A description of the audit that states:

(d) an audit includes evaluating the appropriateness of the accounting policies used and the REASONABLENESS of significant ACCOUNTING estimates made by management, as well as EVALUATING the overall presentation of the financial statements.

The basic elements of the unqualified audit opinion (issuer) are the following: Scope Paragraph. The scope paragraph contains the following: (3) A statements that the audit include EXAMINING EVIDENCE on a test basis;

ASSESSING the ACCOUNTING PRINCIPLES used and significant estimates MADE by MANAGEMENT; and evaluating the overall presentation. (4) A statement that the audit provides a reasonable basis for an opinion.

Report of Independent Registered Public Accounting Firm Scope (2) An audit includes EXAMINING, on a test basis, EVIDENCE supporting the amounts and disclosures in the financial statements.

An audit also includes ASSESSING the ACCOUNTING PRINCIPLES used and significant estimates MADE by MANAGEMENT, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion.

Report of Independent Registered Public Accounting Firm : Opinion: In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of ABC Company as of (at)

December 31, 2000, and the results of its operations and its cash flows for the year then ended in conformity with accounting principles generally accepted in the United States of America.

The auditor's report date shows the final date of auditor responsibility.

For comparative financial statements, the audit report date for the most recent audit should be used.

Filing of Form AP [Public company/issuers]. an issuer must file Form AP with PCAOB for each audit report issued. this form includes information about the audit, such as: ☐ Signature of partner or authorized office.

Form AP must be filed by the 35th day after the audit report is first filed in a document with the SEC or within 10 days if the audit report is included in a registration statement.

When the examiners require CPA candidates to respond to questions concerning the unmodified audit opinion, you must remember:

GAAS ------> Auditor's responsibility paragraph. GAAP (U.S. or other applicable financial reporting framework)-------> Management's responsibility paragraph and opinion paragraph.

When circumstances indicate that a financial presentation in accordance with U.S. GAAP would be misleading, a departure from U.S. GAAP is permissible.

In such cases, the auditor should issue an unmodified opinion because the financial statements are not materially misstated.

Under U.S. Auditing Standards, the auditor states that the audit was conducted in accordance with GAAS in the Auditor's responsibility paragraph.

The auditor expresses opinion on the financial statements conformity with GAAP in the opinion paragraph.

The auditor's report should be dated no earlier than the date on which the auditor has obtained sufficient appropriate audit evidence to support the opinion.

The auditor may not have received sufficient appropriate audit evidence by the last day of fieldwork. For example, the partner's review of the audit evidence may take place after the last day of fieldwork.

Unmodified Audit Opinion [Nonissuers]= [Private Company]. the auditor of a nonissuer should express an unmodified opinion when the auditor concludes that the financial statements are presented fairly, in all material respects, in accordance with the applicable financial reporting framework.

The auditor's report should be in writing. Note that nonissuers use the term unmodified and issuers use the term unqualified.

Contents of the Audit Report The basic elements of the unmodified audit opinion (nonissuer) are the following: Signature of the Auditor

The auditor's report should include the manual or printed signature of the auditor's firm.

Contents of the Audit Report The basic elements of the unmodified audit opinion (nonissuer) are the following: Auditor's address

The auditor's report should name the city and state (or country) in which the auditor practices.

Auditor's Responsibility An audit involves performing procedures to OBTAIN audit evidence about the amounts and disclosure in the financial statements.

The procedures selected depend on the auditor's judgement, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error.

Report of Independent Registered Public Accounting Firm Intro (RR) We have audited the accompanying balance sheet of ABC Company as of December 31, 2000, and the related statements of income, retained earnings, and cash flows for the year then ended.

These financial statements are the RESPONSIBILITY of the Company's management. Our RESPONSIBILITY is to express an opinion on these financial statements based on our audit.

Report of Independent Registered Public Accounting Firm Scope We conducted our AUDIT in ACCORDANCE with the standards of the Public Company Accounting Oversight Board (United States).

Those standards require that we PLAN and PERFORM the audit to obtain reasonable assurance about whether the financial statements are free of MATERIAL MISSTATEMENT.

Auditor's Responsibility Our RESPONSIBILITY is to EXPRESS an opinion on these financial statements based on our audit. We conducted our audit in accordance with auditing standards generally accepted in the United States of America.

Those standards require that we PLAN and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement.

Contents of the Audit Report The basic elements of the unmodified audit opinion (nonissuer) are the following:

Title: "independent" (auditor's report) should be included in the report title. Addressee: The report is addressed as required by the circumstances of the engagement.

(1). Obtaining evidence that is sufficient and appropriate: Explicitly. (2). Consistent application of accounting principles: Implicitly.

Under U.S. auditing Standards, the auditor explicitly states in the Auditor's Responsibility paragraph of the opinion: "we believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion." Consistency is implied in the auditor's report.

Auditor's Responsibility

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.

Report on the Financial Statements

We have audited the accompanying financial statements of ABC Company, which comprise the balance sheet as of December 31, 2001, and the related statements of income, changes in stockholders' equity, and cash flows for the year then ended, and the related notes to the financial statements.

Reference to Auditing Standard in the Auditor's Report. Audits in Accordance with Two Sets of Standards. If the audit was conducted in accordance with two sets of auditing standards in their entirety, the auditor may indicate that the audit was conducted in accordance with another set of auditing standards

[e.g., international Standards on Auditing or government auditing standards]. Additional language should be added to the Auditor's Responsibility paragraph to describe this situation:

The auditor's report should include a section with the heading "Auditor's RESPONSIBILITY" that includes: (4). A description of the audit that states: (c)in making those risk assessments, the auditor considers INTERNAL CONTROL (test) relevant to the entity's preparation

and fair presentation of the financial STATEMENTS in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity's internal CONTROL, and accordingly, no such opinion is expressed.

The auditor's report should include reference to the United States as the country of origin of both the accounting principles used to prepare the financial statements

and the auditing standards the auditor followed in performing the audit.

Opinion In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of ABC Company as of December 31, 2001,

and the results of its operations and its cash flows for the year then ended in accordance with accounting principles generally accepted in the United States of America.

Optional Inclusions. ☐ the engagement partner's full name; and/or ☐ for other accounting firms participating in the audit, a statement that the auditor is responsible for the audits or audit procedures performed

by the other public accounting firms and has supervised or performed procedures to assume responsibility for their work in accordance with PCAOB standards.

Optional Inclusions. Although not required, the auditor of an issuer may elect to include in the auditor's report information regarding the engagement partner and/or other accounting firms participating in the audit.

if the auditor decides to provide information about the engagement partner, other accounting firms participating in the audit, or both, the auditor must disclose the following:

Unqualified Audit Opinion [Issuers]. The auditor of an issuer should express an unqualified opinion when the auditor concludes that the financial statements are presented fairly,

in all material respects, in accordance with the applicable financial reporting framework [e.g., generally accepted accounting principles]. The report should be in writing.

Auditor's Responsibility In making those risk assessments, the auditor considers INTERNAL CONTROL relevant to the entity's preparation and fair presentation of the financial STATEMENTS

in order to design audit procedures that are appropriate in the circumstances but not for the purpose of expressing an opinion on the effectiveness of the entity's internal CONTROL.

Contents of the Audit Report The basic elements of the unmodified audit opinion (nonissuer) are the following: Other Reporting Responsibilities (a) If the auditor addresses other reporting responsibilities

in the auditor's report in addition to GAAS, these other reporting responsibilities should be addressed in a separate section of the auditor's report subtitled "Report on Other Legal and Regulatory Responsibilities," or otherwise as appropriate.

Consistent Application of Accounting Principles: Implicitly. Examination of Evidence on a test basis: Implicitly. Consistency is implicit in the auditor's report ,and will be explicitly mentioned in an emphasis-of-matter paragraph

only if there are issues with consistency. there is no explicit reference to "test basis." The report says " an audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements."

Contents of the Audit Report The basic elements of the unmodified audit opinion (nonissuer) are the following: Auditor's Opinion The auditor's report should include a section with the title "Opinion" that includes: (a) A statement that the financial statements present fairly,in all material

respects, the financial position of the entity as of the balance sheet date and the results of operations and its cash flows for the period then ended, in accordance with the applicable financial reporting framework. (b) Identification of the applicable financial reporting framework and its origin.

The basic elements of the unqualified audit opinion (issuer) are the following: Reporting Date. The date of the audit report must be included in the report. (1) The report should be dated on or after the date on which appropriate audit evidence,

sufficient to support the opinion, has been obtained. Sufficient appropriate audit evidence includes evidence that: (a) Audit documentation has been reviewed; (b) financial statements have been prepared; and (c) management has taken responsibility for the financial statements.

Note: Most issuers are required to have an integrated audit, which means

that an additional opinion is rendered on the operating effectiveness of internal control.

A client decides not to make an auditor's proposed adjustments that collectively are not material, and want the auditor to issue the report based on the unadjusted numbers. The AICPA defines fair presentation as reflecting the underlying transactions of a company in a manner that represents

the F/S within a range of acceptable limits. Since the collective effect of the proposed adjustments is immaterial, the financial statement would be considered to conform to Generally Accepted Accounting Principles, and footnote disclosure of the proposed adjustments would not be required.

The basic elements of the unqualified audit opinion (issuer) are the following: Scope Paragraph. The scope paragraph contains the following: (1) a statement that the AUDIT was conducted in ACCORDANCE with the standards of

the Public Company Accounting Oversight Board (United States). (2). A statement that was PLANNED and PERFORMED to obtain reasonable assurance that the financial statements are free from MATERIAL MISSTATEMENT.

Audits in Accordance With GAAS and PCAOB Standards (Private Company-Nonissuer) When conducting an audit of financial statements in accordance with the standards of the PCAOB and the audit is not required to be conducted in accordance with those standards,

the auditor is required to also follow GAAS. In addition, the auditor should: (1). Use the report required by the PCAOB. (2). Amend the PCAOB (Issuer) report to state the audit was also conducted in accordance with GAAS.

The auditors should address their reports to

the entity that engaged them.

Non issuers use

the term unmodified.

Issuers use

the term unqualified

Management's Responsibility for the Financial Statements Management is responsible for the preparation and fair presentation of these financial statements in accordance with accounting principles generally accepted in the United States of America;

this includes the DESIGN, IMPLEMENTATION, and MAINTENANCE of internal control relevant to the preparation and fair presentation of financial statements that are free from material misstatement whether due to fraud or error.

our responsibility is to express an opinion on these financial statements based on our audits.

we conducted our audits in accordance with auditing standards generally accepted in the United States of America and in accordance with International Standards on Auditing.

Filing of Form AP [Public company/issuers]. an issuer must file Form AP with PCAOB for each audit report issued. this form includes information about the audit, such as:

☐ name of the firm. ☐ name of the issuer whose financial statements are audited. ☐ date of the audit report.

☐ the end date of the most recent period's financial statements identified in the audit report. ☐ the name of the engagement partner on the most recent period's audit and his/her current and prior ID number(s). ☐ The city and state [or city and country] of the office of the firm issuing the audit report.

☐ whether the audit report is dual-dated. ☐ whether other accounting firms participated in the audit. ☐ Whether the firm divided responsibility for the audit.