Concept explainers
Explain the reason why the auditor’s reports are important to users of financial statements and why it is desirable to have standard wording.
Explanation of Solution
Explain the reason why the auditor’s reports are important to users of financial statements and why it is desirable to have standard wording as follows:
Auditors’ reports are important to users of financial statements, because users need to know about whether the financial statements are fairly stated, or whether no conclusion can be made with regard to the fairness of their presentation. Users especially look for any deviation from the wording of the standard unmodified report and the reasons and implications of such deviations. When there are departures from the standard wording, users are more likely to recognize and consider situations requiring a modification or qualification to the auditor’s report or opinion.
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Chapter 3 Solutions
EBK AUDITING AND ASSURANCE SERVICES
