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11 Cards in this Set
- Front
- Back
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Adverse opinion |
The auditor's opinion that the financial statements do not present fairly in accordance with generally accepted accounting principles (or other basis of accounting) due to a pervasively material misstatement. |
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Disclaimer of opinion |
The auditor's indication that no opinion is expressed on the financial statements. The auditor will disclaim an opinion if a pervasive scope limitation arises or if it is determined that the auditor lacks independence. |
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Explanatory paragraph |
A paragraph that is used under certain circumstances to provide additional explanation to users of the financial statements. These do not affect the auditor's unqualified/unmodified opinion. Under GAAS, this refers to a matter appropriately presented or disclosed in the financial statements us known as an emphasis-of-matter paragraph, while a paragraph that refers to matters other than those presented or disclosed in the financial statements is known as an other-matter-paragraph. |
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Generally accepted auditing standards |
Standards against which the quality of the auditor's performance is measured. |
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Materiality |
The max amount by which the auditor believes the financial statements could be misstated and still not affect the decisions of users. |
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Qualified Opinion |
The auditor's opinion that the financial statements present fairly, in all material respects, in accordance with generally accepted accounting principles (or other basis of accounting), except for a material misstatement that does not, however, pervasively affect users' ability to rely on the financial statements. Can also be issued for a scope limitation that is of limited significance. |
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Reasonable Assurance |
A term that implies some risk that a material misstatement could be present in the financial statements without the auditor detecting it, even when the auditor has exercised due care. |
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Representation letter |
A letter that corroborates oral representations made to the auditor by management or by other auditors and documents the continued appropriateness of such representations. |
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Scope limitation |
A lack of evidence that may preclude the auditor from issuing clean opinion, usually resulting from an inability to conduct an audit procedure considered necessary. |
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Special Purpose Financial Statements |
Financial statements prepared under cash basis, tax basis, regulatory basis, or contractual basis (formerly referred to as "other comprehensive basis of accounting") |
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Unqualified/Unmodified opinion |
The auditor's opinion that the financial statements present fairly, in all material respects, the client's financial position, results of operations, and cash flows in accordance with generally accepted accounting principles (or other basis of accounting) - i.e., a "clean" opinion. |
