he IAASB recently revised its standards related to audit reporting. ISA 700 (Revised), Forming an Opinion and Reporting on Financial Statements, requires the auditor's report to include the following paragraphs under the headings "Basis for Opinion" and "Auditor's Responsibilities for the Audit of the Financial Statements": LOADING... (Click the icon to review the revised Basis for Opinion and Auditor's Responsibilities for the Audit of the Financial Statements paragraphs.) ... Question content area top right Part 1 Read the requirements LOADING... . LOADING... (Click the icon to view the Basis for Opinion and Auditor's Responsibility sections in the standard unmodified opinion audit report example for a nonpublic company.) LOADING... (Click the icon to view the Basis for Opinion section in the standard unmodified opinion audit report example for a public company.) Question content area bottom Part 1 Requirement a. How does the information in the IAASB's revised paragraphs compare to the information in the Basis for Opinion and Auditor's Responsibility sections in the standard unmodified opinion audit report example for a nonpublic company? (Select all that apply.) A. The ISA report explicitly notes that the auditor is not providing an opinion on internal control. The unmodified opinion audit report for nonpublic entities does not include similar disclosures. B. The ISA report includes a statement containing the auditor's conclusion that the audit evidence obtained provides a basis for the opinion issued. The unmodified opinion audit report for nonpublic entities does not include similar disclosures. C. While the wording differs between the two reports, both the ISA report and the unmodified opinion audit report for nonpublic entities recognize that the audit entails the performance of procedures to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether caused by error or fraud. D. The unmodified opinion audit report for nonpublic entities notes that the audit was conducted in accordance with ISA standards rather than U.S. GAAP. E. The ISA report includes a sentence explicitly stating that the auditor is independent and that the auditor has complied with the IESBA Code. F. The ISA report notes that the audit was conducted in accordance with ISA standards rather than U.S. GAAS. G. While most of the auditor's responsibility paragraph is similar between the two reports, the unmodified opinion audit report for nonpublic entities includes an additional sentence indicating that the risk of not detecting a material misstatement arising from fraud is greater than the risk arising from an error due to the possibility of forgery or collusion, override of controls, intentional omissions of data, or misrepresentations. H. The unmodified opinion audit report for nonpublic entities includes a description of what the audit entails, including the auditor's consideration of accounting policies, accounting.

1. he IAASB recently revised its standards related to audit reporting. ISA 700 (Revised), Forming
an Opinion and Reporting on Financial
Statements,
requires the auditor's report to include the following paragraphs under the headings "Basis for
Opinion" and "Auditor's Responsibilities for the Audit of the Financial Statements":
LOADING...
(Click the icon to review the revised Basis for Opinion and Auditor's Responsibilities for the
Audit of the Financial Statements paragraphs.)
...
Question content area top right
Part 1
Read the requirements
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.
LOADING...
(Click the icon to view the Basis for Opinion and Auditor's Responsibility sections in the
standard unmodified opinion audit report example for a nonpublic company.)
LOADING...
(Click the icon to view the Basis for Opinion section in the standard unmodified opinion audit
report example for a public company.)
Question content area bottom
Part 1
Requirement a. How does the information in the IAASB's revised paragraphs compare to the
information in the Basis for Opinion and Auditor's Responsibility sections in the standard
unmodified opinion audit report example for a nonpublic company? (Select all that apply.)
A.

2. The ISA report explicitly notes that the auditor is not providing an opinion on internal control.
The unmodified opinion audit report for nonpublic entities does not include similar disclosures.
B.
The ISA report includes a statement containing the auditor's conclusion that the audit evidence
obtained provides a basis for the opinion issued. The unmodified opinion audit report for
nonpublic entities does not include similar disclosures.
C.
While the wording differs between the two reports, both the ISA report and the unmodified
opinion audit report for nonpublic entities recognize that the audit entails the performance of
procedures to obtain reasonable assurance about whether the financial statements are free of
material misstatement, whether caused by error or fraud.
D.
The unmodified opinion audit report for nonpublic entities notes that the audit was conducted in
accordance with ISA standards rather than U.S. GAAP.
E.
The ISA report includes a sentence explicitly stating that the auditor is independent and that the
auditor has complied with the IESBA Code.
F.
The ISA report notes that the audit was conducted in accordance with ISA standards rather than
U.S. GAAS.
G.
While most of the auditor's responsibility paragraph is similar between the two reports, the
unmodified opinion audit report for nonpublic entities includes an additional sentence indicating
that the risk of not detecting a material misstatement arising from fraud is greater than the risk
arising from an error due to the possibility of forgery or collusion, override of controls,
intentional omissions of data, or misrepresentations.
H.
The unmodified opinion audit report for nonpublic entities includes a description of what the
audit entails, including the auditor's consideration of accounting policies, accounting estimates,
and the overall presentation of the financial statements. The ISA report does not include this.
Part 2

3. Requirement b. How does the information in the IAASB's revised paragraphs compare to the
information in the Basis for Opinion section in the standard unmodified opinion audit report
example for a public company? (Select all that apply.)
A.
Both reports provide additional information that emphasizes that reasonable assurance is not a
guarantee.
B.
The ISA report includes a sentence explicitly stating that the auditor is independent and that the
auditor has complied with the IESBA Code. The audit report for public companies does not have
the same disclosure.
C.
The standard unmodified opinion audit report example for a public company notes that the audit
was conducted in accordance with U.S. GAAP rather than PCAOB auditing standards.
D.
The unmodified opinion audit report for public companies include a statement containing the
auditor's conclusion that the audit evidence obtained provides a basis for the opinion issued. The
ISA report does not include similar disclosures.
E.
While the wording differs between the two reports, both the ISA report and the unmodified
opinion audit report for public companies recognize that the audit entails the performance of
procedures to obtain reasonable assurance about whether the financial statements are free of
material misstatement, whether caused by error or fraud.
F.
The ISA report notes that the audit was conducted in accordance with ISA standards rather than
PCAOB auditing standards.
Part 3
Requirement c. Discuss which of the three audit reports
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, in your opinion, provides greater auditor communications to users of the financial statements.
The ISA report's discussion about the importance of auditor independence provides

4. less explicit emphasis on the independence of the auditor, which may be a helpful reminder
more explicit emphasis on the independence of the auditor, which may be a helpful reminder
to users of the financial statements. Additionally, the expanded discussion about the concept of
reasonable assurance helps emphasize the fact that the audit
is a guarantee that all material misstatements will be detected if performed properly.
is not a guarantee that all material misstatements will be detected.
. In contrast, the ISA report provides
little information about the audit process and that lack of disclosure may lead to lack of user
understanding
more information about the audit process and that increase in disclosure may lead to better user
understanding
about key aspects of the audit process and what the auditor has and has not done.