It expresses an opinion on the degree of the correspondence between information contained in the financial statements and the established criteria in the auditor�s procedures
What are 3 the requirements in issuing audit reports as set out in PSA 200 Objective and Principles Governing an Audit of Financial Statements?
1: If unqualified opinion is expressed, auditor refers to PSA 700 (The Independent Auditor's report on a Complete Set of Gen. Purpose. Fin. Statements)
2: if modified opinion is expressed including emphasis of the matter, qualified and disclaimer or adverse , refer to PSA 701 (Modifications to the Independent Auditor's Report) 3:refer to PSA 800 (Auditor's Report on Special Purpose Engagements)
An Auditor is required to refer to PSA 800 when expressing an opinion on (4)
1.Complete set of FS in another comprehensive basis of accounting
2.component of complete set of special purpose FS
3. Compliance with contractual agreements
4. Summarized FS
Corporation Code requires the filing of audited FS for all corporations whose paid-up capital is
50,000 or more
Tax Code requires which companies , partnerships or person to have their books of accounts examined by independent CPAs?
those whose quarterly sales , earnings receipts or output exceed 150,000
SRC 68 requires Corporations with paid-up capital of 50,000 or more to submit what document in addition to the FS?
annual report containing management discussion and analysis (MD & A) of the results of corporate operations
When is an Unqualified Audit Report issued? (3)
1. Auditors performed their examination in accordance with GAAS, PSA and PAPS
2. The FS are prepared in accordance with a FRF
3. No circumstances requiring modification
What are the 10 basic elements of a Standard unqualified audit report?
4. Management's Responsibility for FS
7.Other reporting Responsibilities
8. Auditor's Signature
9.Date of Auditor's report
*Departure from the standards wordings of the audit report is usually regarded as warning to the reader
This contains a statement that identifies the financial statements audited
This part of the Audit Report specifies the date and period covered by the FS
This part of the Audit Report refers to the summary of significant accounting policies and other explanatory notes
In the Philippines, certain issuers of like public companies are being required to have
separate auditor's opinion on supplementary schedules
*SRC 68, requires that the auditor's report on FS filed with SEC and BIR be signed manually or digitally
FALSE manually only
In the auditor's signature, what is the required information that must be stated along with the signature?
2: Tax identification No.
3: Privilege Tax Receipt No.
*PSA 560 states that the date of approval of the FS is the earlier date on which those with the recognized authority determine that a complete set of financial statements have been prepared
*The later the date of auditor's report , the lesser is the likelihood of subsequent events.
FALSE, greater likelihood. Therefore, it is in the auditor's interest to encourage client's management to finalize the FS as soon as possible.
*It is in the auditor's interest to perform a review of subsequent events as close as possible to the date of audit report in order to gather evidence that is relevant
Normally the date of audit report selected by the auditor is that date when
the principal auditor agrees finally with the responsible client executives on the form and content of the financial statements
PSA 700, requires only the indication of the auditor's address in the auditor's report while the complete mailing address of the client may or may not be indicated in the AR accompanying the FS to be filed with the BIR and SEC.
FALSE, both are required. Report should also contain the location of the country where the auditor practices.
When is an audit report said to be modified?
if the basic elements of the independent auditor's report as identified in PSA 700 are not kept in tact
What are the 4 examples of matters that do not affect the auditor's opinion?
Emphasis of a matter paragraph that pertains to 1.a going concern problem 2.uncertianties 3.inconsitency where the client entity refuses to make necessary amendment of other information in a document containing Audited FS 4.additional statutory reporting responsibilities
The auditor should modify the auditor's report by adding a paragraph to highlight the matter. This paragraph would be preferably included where or which part of the audit report?
after the auditor's opinion paragraph but before the section on any other reporting responsibilities