ACCT90014 · Auditing And Assurance Services
Completion and Reporting
Fieldwork is done and the file is being wrapped. Completion is the final sweep that confirms the evidence still supports an opinion at the date the report is signed — evaluating subsequent events (ASA 560), assessing going concern (ASA 570), obtaining written representations, and aggregating the uncorrected misstatements (ASA 450) to ask one pivotal question: individually and in aggregate, are they material? That single question decides unmodified vs modified. Reporting then turns the conclusion into the audit report (ASA 700/701), which puts the opinion first and adds Key Audit Matters to raise its communicative value. The most-examined move in the whole subject lives here — the opinion decision (ASA 705). Two questions decide everything: (1) what is the problem? a misstatement (you disagree with management) or an inability to obtain sufficient appropriate evidence (a scope limitation); and (2) how bad? material, or material and pervasive. Fix the cause column first, then let the severity row pick the cell: qualified, adverse, or disclaimer — the modification grid.
What this chapter covers
- 01Completion: where we are and what the final sweep confirms
- 02Subsequent events (ASA 560) and going concern (ASA 570)
- 03Uncorrected misstatements (ASA 450): the material-in-aggregate question
- 04The audit report (ASA 700/701): opinion first, Key Audit Matters
- 05The opinion decision (ASA 705): cause × effect
- 06The modification grid: qualified / adverse / disclaimer
- 07Worked opinion scenarios walked through the answer shape
Worked example: which audit opinion?
- +2(a) Cause: a misstatement — you have the evidence and disagree with management (not a scope limitation). Effect: material but not pervasive (confined to inventory).
- +2(b) Opinion: a qualified ('except for') opinion — the statements give a true and fair view except for the effects of the overstated inventory.
- +1(c) If pervasive: a material and pervasive misstatement requires an adverse opinion — the statements as a whole do not give a true and fair view.
- +1State the grid: cause (misstatement) fixes the column; effect (material vs material & pervasive) picks the row — qualified for material, adverse for material & pervasive.
Key terms
- Subsequent events (ASA 560)
- Events between the balance date and the date the report is signed (and facts discovered after). Adjusting events provide evidence of conditions at balance date and change the numbers; non-adjusting events of significance are disclosed.
- Going concern (ASA 570)
- The assumption that the entity will continue operating for the foreseeable future. The auditor assesses whether material uncertainties exist; if disclosure is adequate the opinion may be unmodified with a 'material uncertainty' paragraph, otherwise the opinion is modified.
- Uncorrected misstatements (ASA 450)
- Misstatements identified during the audit that management has not corrected. At completion the auditor evaluates them individually and in aggregate against materiality — the question that decides unmodified vs modified.
- Pervasive
- A misstatement or scope limitation is pervasive if its effects are not confined to specific elements but spread across the statements (or could be, in a scope case), or are fundamental to users' understanding. Pervasiveness pushes a qualified opinion to adverse, or a qualified to a disclaimer.
- Modification grid (ASA 705)
- The decision tool for the opinion: cause (a misstatement vs an inability to obtain sufficient appropriate evidence) × effect (material vs material and pervasive) → qualified, adverse (misstatement, pervasive) or disclaimer (scope limitation, pervasive).
Completion and Reporting FAQ
What is the difference between a qualified, adverse and disclaimer of opinion?
They map onto the modification grid. A qualified ('except for') opinion is given when a misstatement or scope limitation is material but not pervasive. An adverse opinion is given when a misstatement is material and pervasive (the statements as a whole are misleading). A disclaimer is given when a scope limitation is material and pervasive (the auditor cannot obtain enough evidence to form any opinion).
How do I decide the opinion in an exam?
Two questions, in order. First the cause: is the problem a misstatement (you disagree with management, you have the evidence) or a scope limitation (you cannot obtain sufficient appropriate evidence)? Then the effect: is it material, or material and pervasive? Fix the cause column first, then the severity row picks the cell. This is the single most-examined move in the subject.
What are subsequent events and why do they matter at completion?
Subsequent events (ASA 560) occur between the balance date and the date the report is signed. Adjusting events reveal conditions that existed at balance date and change the recorded amounts; significant non-adjusting events are disclosed. They matter because the auditor's opinion speaks as at the signing date, so new information can change the numbers or the disclosures.
When does going concern affect the report?
If a material uncertainty about going concern exists and management discloses it adequately, the opinion can remain unmodified but a 'Material Uncertainty Related to Going Concern' section is added (ASA 570). If the disclosure is inadequate, or the going-concern basis is inappropriate, the opinion is modified — potentially adverse if the statements are prepared on the wrong basis.
Exam move
Make the opinion decision automatic, because it is the subject's signature question. Drill the two-step: cause first (misstatement vs scope limitation), then effect (material vs material & pervasive), and read the cell off the modification grid — qualified, adverse, disclaimer. Practise walking each scenario through IDENTIFY → CITE → APPLY → CONCLUDE → RESPOND, citing the right standard (ASA 705 for the opinion, 560 for subsequent events, 570 for going concern, 450 for uncorrected misstatements, 700/701 for the report). Watch the traps: going concern with adequate disclosure stays unmodified with an extra section, and pervasiveness is what separates qualified from adverse (or qualified from disclaimer).
