Generally Accepted Audit Standards. When the limitation on scope is imposed by client, as a result the auditor is unable to obtain sufficient appropriate audit evidence.
Management's plans in regard to these matters are also described in Note X. References 3. If the auditor audited the rest of the financial statements and is reasonably sure that they conform with GAAP, then the auditor simply states that the financial statements are fairly presented, with the exception of the inventory which could not be audited.
Unfortunately, many auditors are increasingly reluctant to include this disclosure in their opinions, since it is considered a "self-fulfilling prophecy" by some.
This letter is to inform you on how we plan to begin the audit process for your company. Investors, lending institutions, and governments very rarely accept an auditee's financial statements if the auditor issued an adverse opinion, and usually request the auditee to correct the financial statements and obtain another audit report.
Auditor's reports on financial statements in different countries[ edit ] See also: International Standards on Auditing The auditor's report usually does not vary from country to country, although some countries do require either additional or less wording.
Similar to the qualified and the adverse opinions, the auditor must briefly discuss the situations for the disclaimer in an explanatory paragraph. The disclaimer of opinion report can be traced back towhen the Statement on Auditing Procedure No.
Other explanatory information and paragraphs[ edit ] Although the auditor reports mentioned above are the standard reports for financial statement audits, the auditor may add additional information to the report if it is deemed necessary without changing the overall opinion of the report.
See also: Financial audit It is important to note that auditor reports on financial statements are neither evaluations nor any other similar determination used to evaluate entities in order to make a decision. This type of report is issued when the auditor tried to audit an entity but could not complete the work due to various reasons and does not issue an opinion.
Although this section may be longer than one paragraph, it should be written as succinctly as possible.