Opinion Paragraph

The opinion paragraph provides those assurances that can be supported by the audit
Expresses opinion on the fair presentation of the financial statements
Indicates limitation of materiality
·1 Indicates conformity with U.S. GAAP

"In our opinion, the financial statements referred to above present fairly, in all material respects,
the financial position of X Company as of December 31, 20XX, and the results of operations and
its cash flows for the year then ended in conformity with United States generally accepted ac-
counting principles."
The opinion paragraph addresses the requirements of the standards of reporting
1) Explicitly indicates conformity with GAAP
2) Implicitly indicates consistency by not identifying inconsistencies
3) Implicitly indicates adequacy of disclosure by not stating otherwise
4) Explicitly expresses an opinion on the financial statements
5) Implicitly indicates auditor is taking full responsibility unless modified to explicitly indicate
division of responsibility

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156

PCAOB Audit Standard 1

The audit report must be prepared differently for a company that r~ports to ~he SEC and is,
therefore, subject to the requirements of the Public Company Accountmg Oversight Board.
The title of the page is "Report of Independent Registered Public Accounting Firm." .
The scope paragraph must not refer to generally accepted. auditing ~tandards, and. m-
stead refer to "the standard of the Public Company Accountmg Oversight Board (United
States)." ( it d
Below the signature of the auditor-in-charge must be lis~ed ~he city and state or Cl y an
country for non-US auditors) of the office where the auditor IS based.

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Reporting - Module 4