In short
The basis for opinion section comes right after the opinion in the auditor's report. It states that the audit was performed under generally accepted auditing standards, that the auditor is independent and met ethical requirements, and that the evidence is sufficient and appropriate.
Key takeaways
- When the opinion is modified, the heading changes, for example to Basis for Qualified Opinion, and the matter is described.
- Public company audit reports also have a basis for opinion section.
- It refers to the auditor's responsibilities section for more detail.
Where it's tested
AUD: Audit Reports — study notes, a five-minute revision sheet and practice questions.
Practise: 3 questions
Question 1 of 3 · 0 answered
An auditor is unable to observe the physical inventory count or satisfy themselves through alternative procedures, and inventory represents 60% of total assets. What opinion is appropriate?