What is the difference between modified and unmodified audit report?
Audit report is said to be unmodified if auditor releases such report which has the exactly the same format or contents as are mentioned for the report which should be given if financial statements are giving true and fair view. Under IAASB auditing standard ISA 700 (read para 20 through 40), the format of the […]
Where can I find the glossary of auditing terms?
Auditing is one of the technical and practical subject so defining each term can be different from one perspective to other. For example, term defined in one definition might have completely different meanings in another standard. Also there are many different auditing boards around the world ranging from global to country wide organizations responsible for […]
What is Audit risk?
In IAASB auditing standards the term Audit risk has been defined as: The risk that auditor expresses an inappropriate audit opinion when the financial statements are materially misstated. Audit risk is a function of risk of material misstatement and detection risk. In simple words a risk that auditor expresses an opinion that financial statements are […]
What is Performance materiality?
Since the the concept of materiality at application level has been defined in the standards, it has been posing problems for students. Many think that this is a new concept, but it is fairly old and was there but it was certainly not defined before. Main reason to my mind why students find it hard […]
What is the difference between Inherent Risk and Business Risk and implications of these two in auditing?
Understanding the difference between these two terms and other risk related terminologies is vital if students want to acquire the conceptual understanding of the Risk-based Audit approach. According to the glossary accompanying the IAASB pronouncements on assurance engagement and related Services business risk has been defined as follows: A risk resulting from significant conditions, events, […]
What is the difference between unmodified opinion and unqualified opinion?
To me there is no difference between the two terms as they concludes one and the same thing. Auditing Standards use both terms to mean one and the same thing. But it has been observed that the term Unmodified opinion is used more often in standards instead of Unqualified opinion. Some authors try to differentiate […]
Does Modified report always have Modified opinion?
No. Modified reports does not necessarily means modified opinion also. Lets explain it further. Modified opinion means either of the following: Qualified opinion Adverse opinion Disclaimer Therefore, whenever we refer to modified opinion we mean either of these three. And if the modification is necessary in the opinion then report also requires necessary modifications which […]
What is the difference between Negative assurance, Positive assurance, Negative opinion and Negative report?
Difference between Negative assurance and Positive assurance Many students get confuse in these things and mostly it is because books usually use such terminologies which prevail in the business world which are most of the time shortened up and thus sometimes lose their meanings. Lets start with Positive and Negative assurance. Many students think that […]
What is Substantive audit approach / Vouching approach?
There are many different auditing methodologies or in other words auditing approaches which can be used by the auditor to conduct an audit engagement. Which audit approach is better or should be used to much extent was (and to some extent still is) dependent on the audit firm. One of the approaches is vouching approach, […]
What is tolerable misstatement and tolerable rate of deviation and the difference betweem them?
Auditor most of the time, due to number of factors, is unable to apply audit procedures on each and every piece of information available to him. Therefore, he applies different audit procedures on less then 100% items in a given population. This is called sampling. Among these audit procedures there are two types of procedures […]
