Key terms

Adverse opinion – негативна думка – an opinion expressed in an auditors’ report to the effect that the financial statements do not give a true and fair view of the organization’s activities. This situation usually arises when there is a disagreement between the auditor and the directors, and the auditor considers the effect of the disagreement so material or pervasive that the financial statements are seriously misleading.

Audit opinion – думка аудитора – an opinion contained in an auditors’ report. It expresses a view as to whether or not the financial statements audited has been prepared consistently using appropriate accounting policies, in accordance with relevant legislation, regulations, or applicable accounting standards. The opinion also has to state that there is adequate disclosure of information relevant to the proper understanding of the financial statements.

Auditor’s report – аудиторський висновок – a report by the auditors appointed to audit the accounts of a company or other organization. Auditors’ reports may take many forms depending on who has appointed the auditors and for what purposes.

Disclaimer of opinion – відмова від висловлення думки – a statement made by an auditor to the effect that a limitation of the scope of the audit report is so material that he or she has not been able to obtain sufficient evidence to support an opinion on the financial statements.

Materiality – суттєвість – the extent to which an item of accounting information is material. Information is considered material if its omission from or misstatement in a financial statement could influence the decision making of its users.

Qualified opinion – умовно-позитивна думка – an audit opinion which is issued if the scope of the auditors’ examination has been limited, or the auditors disagree materially with the treatment or disclosure of a matter in the financial statements, or they do not comply with relevant accounting or other requirements.

Unqualified opinion – безумовно позитивна думка – an audit opinion which is given if the auditors are satisfied on all the points of the financial statements, and if any departure from legislation, regulations, or applicable accounting standards has been justified and adequately explained in the financial statements.

EXERCISES