Understanding the Independent Auditors' Report

This lecture looks at the standard audit report for an unqualified opinion. An unqualified audit report basically says that the financial statements are fair in all material aspects which is in your opinion as the auditor. Before you can say that, you need to pass through five important gates:

1. You're engaged to perform an audit.
2. You followed GAAS
3. You gathered sufficient appropriate audit evidence
4. You have evaluated the fairness of presentation relative to GAAP/IFRS
5. You have no reservations whatsoever.

If all of these have been achieved, it's time to draft the audit report.