1. REPORTING ON AUDITED FINANCIAL STATEMENTS

2. PURPOSE OF AUDITOR’S REPORT
INDICATE RESPONSIBILITIES
MANAGEMENT RESPONSIBLE FOR FINANCIAL STATEMENTS
AUDITOR RESPONSIBLE TO EXPRESS AN OPINION
SCOPE
AUDITOR FOLLOWED GAAS
OPINION
FINANCIAL STATEMENTS IN ACCORDANCE WITH GAAP

3. STANDARDS OF REPORTING
STATE WHETHER F/S ARE PER GAAP
IDENTIFY CIRCUMSTANCES IN WHICH GAAP HAVE NOT BEEN CONSISTENTLY OBSERVED
DISCLOSURE IN THE F/S ARE REGARDED AS REASONABLE UNLESS OTHERWISE STATED
EXPRESS AN OPINION ON THE F/S AS A WHOLE

4. THE FOURTH STANDARD OF REPORTING (AU 508.04)
THE REPORT SHALL EITHER CONTAIN AN EXPRESSION OF OPINION REGARDING THE FINANCIAL STATEMENTS, TAKEN AS A WHOLE, OR AN ASSERTION TO THE EFFECT THAT AN OPINION CANNOT BE EXPRESSED. WHEN AN OVERALL OPINION CANNOT BE EXPRESSED, THE REASONS THEREFOR SHOULD BE STATED. IN ALL CASES WHERE AN AUDITOR'S NAME IS ASSOCIATED WITH FINANCIAL STATEMENTS, THE REPORT SHOULD CONTAIN A CLEAR-CUT INDICATION OF THE CHARACTER OF THE AUDITOR'S WORK, IF ANY, AND THE DEGREE OF RESPONSIBILITY THE AUDITOR IS TAKING.

5. UNQUALIFIED AUDITOR’S REPORT
TITLE
MUST INCLUDE THE TERM “INDEPENDENT”
ADDRESS
STOCKHOLDERS, BOD, COMPANY
INTRODUCTION
REFER TO F/S, RESPONSIBILITIES OF MANAGEMENT AND AUDITOR

6. SCOPE OPINION FIRM NAME DATE GAAS, REASONABLE ASSURANCE, DEFINE AUDIT
GAAP, FAIR PRESENTATION
FIRM NAME
DATE
END OF FIELD WORK

7. CONDITIONS FOR UNQUALIFIED OPINION
GAAS
GENERAL, FIELDWORK, REPORT
GAAP
F/S PER GAAP
ADEQUATE DISCLOSURE

8. EXPLANATORY LANGUAGE ADDED TO STANDARD UNQUALIFIED REPORT
OTHER AUDITORS
DEPARTURE FROM PROMULGATED GAAP
GOING CONCERN
LACK OF CONSISTENCY
EMPHASIS OF A MATTER

9. OTHER AUDITORS PRINCIPAL AUDITORS? RELY ON OTHER AUDITOR?
MATERIAL PORTION
KNOWLEDGE OF OVERALL FINANCIALS
IMPORTANT PORTION
RELY ON OTHER AUDITOR?
REPUTATION
INDEPENDENCE

10. ASSUME RESPONSIBILITY FOR OTHER AUDITOR?
CORRESPONDENT FIRM, AGENT OF PRINCIPAL AUDITOR, OR IMMATERIAL PORTION OF F/S
NO CHANGE IN AUDIT REPORT
DON’T ASSUME RESPONSIBILITY FOR OTHER AUDITOR?
MODIFY INTRODUCTION (PERCENTAGE OF WORK DONE BY OTHER AUDITOR), SCOPE AND OPINION PARAGRAPHS

11. DEPARTURE FROM PROMULGATED GAAP
RULE 203 [ET SECTION ] OF THE CODE OF PROFESSIONAL CONDUCT OF THE AICPA STATES:
A MEMBER SHALL NOT (1) EXPRESS AN OPINION OR STATE AFFIRMATIVELY THAT THE FINANCIAL STATEMENTS OR OTHER FINANCIAL DATA OF ANY ENTITY ARE PRESENTED IN CONFORMITY WITH GENERALLY ACCEPTED ACCOUNTING PRINCIPLES OR (2) STATE THAT HE OR SHE IS NOT AWARE OF ANY MATERIAL MODIFICATIONS THAT SHOULD BE MADE TO SUCH STATEMENTS OR DATA IN ORDER FOR THEM TO BE IN CONFORMITY WITH GENERALLY ACCEPTED ACCOUNTING PRINCIPLES, IF SUCH STATEMENTS OR DATA CONTAIN ANY DEPARTURE FROM AN ACCOUNTING PRINCIPLE PROMULGATED BY BODIES DESIGNATED BY COUNCIL TO ESTABLISH SUCH PRINCIPLES THAT HAS A MATERIAL EFFECT ON THE STATEMENTS OR DATA TAKEN AS A WHOLE…

12. ...IF, HOWEVER, THE STATEMENTS OR DATA CONTAIN SUCH A DEPARTURE AND THE MEMBER CAN DEMONSTRATE THAT DUE TO UNUSUAL CIRCUMSTANCES THE FINANCIAL STATEMENTS OR DATA WOULD OTHERWISE HAVE BEEN MISLEADING, THE MEMBER CAN COMPLY WITH THE RULE BY DESCRIBING THE DEPARTURE, ITS APPROXIMATE EFFECTS, IF PRACTICABLE, AND THE REASONS WHY COMPLIANCE WITH THE PRINCIPLE WOULD RESULT IN A MISLEADING STATEMENT.

13. GOING CONCERN IF SUBSTANTIAL DOUBT REMAINS
SUBSTANTIAL DOUBT EXISTS ABOUT THE ENTITY’S ABILITY TO CONTINUE AS A GOING CONCERN ONE YEAR BEYOND THE DATE OF THE F/S
OBTAIN INFORMATION ABOUT MANAGEMNT’S PLANS AND ASSESS THE LIKELIHOOD OF SUCH PLANS BEING IMPLEMENTED
IF SUBSTANTIAL DOUBT REMAINS
ADD EXPLANATORY PARAGRAPH
COULD DISCLAIM

14. CONSISTENCY GAAP AND ACCOUNTING CHANGES CHANGE IN PRINCIPLE
CUMULATIVE EFFECT
RESTATE FOR SOME
CHANGE FROM NON-GAAP TO GAAP IS CORRECTION OF AN ERROR (PRIOR-PERIOD ADJUSTMENT)
CHANGE IN ESTIMATE
PROSPECTIVE
CHANGE IN ENTITY
RESTATE

15. CHANGES AFFECTING COMPARABILITY PER GAAS
CHANGE IN PRINCIPLE
CHANGE IN ENTITY (DISCRETIONARY)
CORRECTION OF ERROR IN PRINCIPLE (NON-GAAP TO GAAP)
CHANGE IN PRINCIPLE THAT IS INSEPARABLE FROM A CHANGE IN ESTIMATE
ADD PARAGRAPH AFTER OPINION

16. EMPHASIS OF A MATTER
AUDITOR CAN ADD PARAGRAPH BEFORE OR AFTER OPINION TO EMPHASIZE
COMPONENTS OF A LARGER BUSINESS
RELATED PARTY TRANSACTIONS
SUBSEQUENT EVENTS
ETC

17. DEPARTURES FROM UNQUALIFIED OPINION
GAAS
AUDITOR HAS NOT PERFORMED SATISFACTORY AUDIT
DOES NOT HAVE KNOWLEDGE IF F/S ARE FAIRLY STATED OR NOT
QUALIFY OR DISCLAIM DEPENDING ON MATERIALITY

18. SCOPE (GAAS) LIMITATION
AUDITOR IMPOSED (NOT INDEPENDENT)
CLIENT IMPOSED
CONDITION IMPOSED
QUALIFIED REPORT
QUALIFY SCOPE AND OPINION
DISCLAIMER
NO OPINION

19. GAAP - AUDITOR NOT SATISFIED AS TO FAIRNESS OF F/S
AUDITOR HAS KNOWLEDGE THAT THE F/S ARE NOT FAIRLY STATED
QUALIFY OR ADVERSE DEPENDING ON MATERIALITY

20. QUALIFIED OPINION DUE TO GAAP DEPARTURE
QUALIFY OPINION PARAGRAPH
ADVERSE OPINION
THE F/S DO NOT PRESENT FAIRLY IN ACCORDANCE WITH GAAP

21. OTHER REPORTING ISSUES
PIECEMEAL OPINIONS (EXPRESSIONS OF OPINION AS TO CERTAIN IDENTIFIED ITEMS IN FINANCIAL STATEMENTS)
SHOULD NOT BE EXPRESSED WHEN THE AUDITOR HAS DISCLAIMED AN OPINION OR HAS EXPRESSED AN ADVERSE OPINION ON THE FINANCIAL STATEMENTS TAKEN AS A WHOLE BECAUSE PIECEMEAL OPINIONS TEND TO OVERSHADOW OR CONTRADICT A DISCLAIMER OF OPINION OR AN ADVERSE OPINION.

22. COMPARATIVE STATEMENTS
CHANGE PRIOR OPINION
THE REPORT ON THE F/S OF THE PRIOR PERIOD SHOULD BE UPDATED IF AN AUDITOR BECOMES AWARE OF CIRCUMSTANCES OR EVENTS THAT EFFECT THOSE PRIOR PERIOD F/S
CHANGE AUDITORS
REFER TO PREDECESSOR AUDITOR OR
ATTACH PREDECESSOR’S REPORT