Learning Objectives LO1 Describe the role of professional judgment in achieving the overall objectives of the independent auditor in conducting an audit of financial statements as set out in CAS 200. LO2 Explain how accumulated misstatements are evaluated at the conclusion of an audit to form an opinion on the fair presentation of general purpose financial statements. LO3 Describe the different forms of audit opinion and the decisions underlying the auditors choice of form. LO4 Explain the purpose of emphasis of matter (EOM) and other matter (OM) paragraphs in an audit report. LO5 Summarize the auditors communications throughout and at the conclusion of the engagement. 1

FORMING AN AUDIT OPINION ON THE FINANCIAL STATEMENTS The first decision is whether the audit team has obtained sufficient appropriate audit evidence. The auditor must also decide whether the applicable reporting framework chosen by management is acceptable. Acceptable reporting frameworks can be either fair presentation frameworks or compliance frameworks. LO3 2

FORMING AN AUDIT OPINION ON THE FINANCIAL STATEMENTS To assess fair presentation, the audit engagement partner considers the results of the final overall financial statement analysis, and assesses whether the overall presentation, structure, and content of the financial statements and notes represent the underlying transactions and events fairly, from the perspective of users (CAS 520). LO3 3

Dual-Dating in the Audit Report Dual-dating refers to the dating of the audit report as the end of field work along with an additional later date attached to a Type II subsequent event. This may occur where the subsequent information is discovered after completion of field work, but before issuance of the report. Not required if auditor is willing to extend subsequent procedures through later date. LO3 4

Audit Program for the Subsequent Period Some subsequent period audit procedures are part of a regular audit program. Procedures are carried out for determining cutoff and proper valuation of balance as of balance sheet date. Specific subsequent period audit procedures are designed to gather evidence on the two types of subsequent events. LO3 5

Responsibilities After the Audit Report Has Been Issued Two issues may arise after the audit report has been issued: subsequent discovery of facts existing at the date of the auditors report, and consideration of omitted procedures after the report date. Auditors are not generally required to perform procedures after the report is issued. They do have responsibilities once they become aware of the facts or omitted procedures. LO3 6

Subsequent Discovery of Facts When an auditor learns of facts that are important after the audit report has been issued, the auditor must determine: if the information is reliable, and if these facts existed at the date of the report. LO3 7