For every financial report, an auditor or a group of auditors will step up to audit or inspect the financial statement whether the financial report given are true and fair view. To conclude all the audit process, an auditor must or responsible to issue an appropriate report to forming an opinion in accordance with ISA 700. In a major division, auditiong report can be classified into two categorized, it is modified report and unmodified report. These two categorized are established by 5 types of audit report as shown below:
1. Standard Unqualified Report
2. Modified Unqualified Report
3. Qualified Opinion
4. Adverse Opinion
5. Disclaimer Opinion
1. Standard Unqualified Report
• It is a common audit report by an auditor
• It present or shown that the audited financial report are true and fair view
• All the requirement such as balance sheet, income statement and cash flow are fully presented and audited
• The financial statement given are presented accordance with approve accounting standard.
• There are no explanatory pharagraph or modification of audit report.
2. Modified Unqualified Report
• It is similar to Standard Unqualified Report, but with an extra pharagraph presented in the audit report that the auditor believes it is important to provide additional information regarding the significant uncertanties matter.
• It still presented that the financial report are true and fair view.
3. Qualified Opinion
• Whole financial report are true and fair view except for a few areas
• A saperated pharagraph for qualified opinion will be published by an auditor when • There are material misstatement in the financial statement given but not pervasive to the financial statement.
• Auditor unable to obtain sufficient audit evidence that material but not pervasive to the financial statement
• If auditor believes that the matter are material and pervasive to the financial report, an adverse opinion will be published
4. Adverse Opinion
• The financial statement given do not fairly represent the organization’s financial statement.
• Specified reason will be follow up the opinion
• It will be published when there are material misstatement and pervasive to the financial statement
• Resulted to the rejection of the audited financial statement
5. Disclaimer Opinion
• This type of report will be published when auditor can’t make any opinion due to insufficient audit evidence.
• Due to limitation of audit evidence there are possibilities that there are material misstatement that pervasive to the financial statement.
• However auditor can’t published adverse opinion although there are any possibilities that material misstatement that pervasive to the financial statement due to lack knowledge.