All of these things are subjective in nature and depend on the auditor’s opinion.Īn adverse audit opinion can deflate a company’s status. The audit opinion is based on such things as how available the data was to them, whether they had an opportunity to follow all due procedures, the level of materiality and other issues along those lines. Investors are particularly interested in the audit opinion because it’s a reflection of the integrity of the audit report and projects an image of the company. Investors analyze audit reports and base much of their investment decisions on information contained in the audit reports. The audit report provides a picture of a company’s financial performance in a given fiscal year. The audit opinion is a very important part of the audit report because it makes a statement about a company’s financial status to investors. Auditors have to make various judgmental assumptions in finalizing reports. A couple of things that make audit reports so complicated is that some of the information isn’t readily available and some of the information is subjective in nature.
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