What does an unmodified audit report indicate about the financial statements?

What does an unmodified audit report indicate about the financial statements?

• A. They give a true and fair view and the audit was conducted in accordance with requirements
• B. They contain material misstatements
• C. The auditor could not obtain sufficient evidence
• D. The report emphasizes a matter

Answer: (A)

An unmodified audit report means the financial statements are presented as a true and fair view of the entity’s financial position, results, and cash flows for the period, and the audit was conducted in accordance with the applicable auditing standards. In other words, there are no material misstatements identified and no reservations about the information, and the audit work followed the required procedures and guidelines. If material misstatements were found, the opinion would be modified to reflect that; if the auditor could not obtain sufficient evidence, the report would be a disclaimer; and an emphasis of matter would indicate a matter the report highlights but does not by itself fix the overall opinion.

An unmodified audit report means the financial statements are presented as a true and fair view of the entity’s financial position, results, and cash flows for the period, and the audit was conducted in accordance with the applicable auditing standards. In other words, there are no material misstatements identified and no reservations about the information, and the audit work followed the required procedures and guidelines. If material misstatements were found, the opinion would be modified to reflect that; if the auditor could not obtain sufficient evidence, the report would be a disclaimer; and an emphasis of matter would indicate a matter the report highlights but does not by itself fix the overall opinion.