What is an Unmodified Audit Report?
An unmodified audit report is the audited financial statement in which an independent external auditor expresses the opinion that reporting prepared, in all material aspects, in accordance with the applicable reporting framework. It simply means the auditors do not found any material misstatement in financial statements, so they present a true and fair view. The audited report will be modified when the auditor found the material misstatement which impacts the financial statements. And they will issue other types of opinions such as qualified, adverse, or disclaimer of opinion.
The company prepares financial statements based on the accounting policy which complies with a specific accounting framework. Managements’ responsible of set up company internal control to prevent any fraud or error on the financial statement.
Auditors’ responsibility is to issue the opinion on the financial statements if they are presented true and fair view. Auditors will provide a different kind of testing to collect to ensure that each account line items are correct. Besides the opinion, auditors also give recommendations on the company’s internal control weakness. It is the weakness that can lead to error or fraud in the financial statements.
Unmodified Vs Unqualified Opinion
Both unmodified and unqualified opinions refer to the auditor’s opinion issue when the company’s financial statements are free from material misstatement. Both terms have the same meaning but in different frameworks.
Elements of Unmodified Audit Report
The unmodified Audit report consist of the following elements:
- Introduction paragraph
- Management responsibility
- Auditors’ responsibility
- Opinion Paragraph
- Other reporting responsibility
- Auditor’s signature
- Date of auditor’s report
- Auditor’s address