CFA Notes - Audit

Note

I. Audit

（1）Definition

An audit is an objective examination and evaluation of the financial statements of an organization to make sure that the records are a fair and accurate representation of the transcations they claim to represent.

（2）Approval Opinion

i. Unqualified Opinion

An unqualified audit opinion states that the financial statements give a "true and fair view" (international) or are "fairly presented" (international and US) in accordance with applicable accounting standards. This is often referred to as a "clean" opinion and is the one that analysts would like to see in a financial report.

ii. Qualified Opinion

A qualified audit opinion is one in which there is some scope limitation or exception to acounting standards. Exceptions are described in the audit report with additional explanatory paragraphs so that the analyst can determine the importance of the exception.

（3）Disapproval Opinion

i. Adverse Opinion

An adverse audit opinion is issued when an auditor determines that the financial statements materially depart from accounting standards and are not fairly presented. An adverse opinion makes analysis of the financial statements easy: Do not bother analyzing these statements, because the company's financial statements cannot be relied on.

ii. Disclaimer of Opionion

A disclaimer of opinion occurs when, for some reason, such as a scope limitation, the auditors are unable to issue an opinion.

（4）The important of Audit

制约

防护

管理控制

评价

鉴证

参谋

（5）Differences between Internal Audit and External Audit

opinion is provided on the effectiveness of the operational activities of the organzation
Opinion is provided on the truthfulness and fairness of the financial statement of the company

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