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What is a basis of opinion paragraph in an unqualified opinion?

The basis for opinion paragraph contains a statement that management is responsible for the preparation of the financial statements that are being audited as well as a statement that the audit was conducted in accordance with the PCAOB.

Additionally, the basis for opinion paragraph should state that it is the auditor’s responsibility, not management’s, to perform audit procedures and report an audit opinion on the financial statements.

Furthermore, the basis for the audit opinion should state:

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  • What are the required paragraphs in an unqualified opinion?

    Unqualified opinions are issued for issuers (public companies). If the audit team has determined that, after performing all necessary audit procedures, that there are no material departures from the conceptual framework, the audit team may issue an unqualified opinion. Reporting an unqualified opinion would consist of an introductory paragraph, management responsibility paragraph, auditor responsibility paragraph, and the actual opinion paragraph.

  • What information is required in an unqualified opinion?

    Remember, an unqualified opinion is for issuers (an unmodified opinion is used for nonissuers). When the audit team of an issuer determines that the financial statements have been presented in accordance with the applicable financial framework, and that there are no material misstatements due to error or fraud, the audit team will issue an unqualified opinion. If an auditor reports an unqualified opinion the following paragraphs will be applied in an auditor’s report:

  • What is the difference between an unmodified and unqualified audit opinion?

    Issuers (public companies) receive unqualified audit opinions while nonissuers (private companies) would receive unmodified opinions. The requirements for the audit report vary between the two types of audit opinions.