Auditing is an evaluation of an organization, system, process, or product.
The audit is carried out by a competent, objective and impartial party called the auditor.
The purpose of auditing is to verify that the subject matter of the audit has been completed or carried out in accordance with agreed and accepted standards, regulations and practices.
In the business world, we are also familiar with the term financial statement audit which is usually carried out by public accountants to assess how fair or how appropriate the presentation of these financial statements is made by the company with reference to generally accepted accounting principles.
Types of Financial Audit Opinions
There are several types of financial audit opinions that you need to know, what are they? Come on, see below.
- Unqualified Opinion
The opinion given by the auditor without any objection to the financial summary presented by the management.
This form of report is used when there are the following circumstances:
- Sufficient audit evidence has been collected and the auditor has carried out his duties in such a way that he can ensure that the fieldwork has been complied with.
- Has followed the agreed general standards.
- The audited financial statements are presented in accordance with generally accepted accounting principles in Indonesia and have been consistently established in previous reports. Similarly, sufficient explanations have been included in footnotes and other parts of the financial statements.
- There are no significant material uncertainties regarding future developments that cannot be predicted in advance or resolved satisfactorily.
- Qualified Opinions
The auditor’s opinion with certain objections to one of the estimates recorded in the financial statements, but the objection does not materially affect the financial summary presented by management.
Matters that affect the emergence of a qualified opinion are:
- There is no sufficient competent evidence or there is a limitation on the scope of the audit that is material but does not affect the financial statements as a whole.
- The auditor believes that the financial statements contain deviations from generally accepted accounting principles that have a material impact but do not affect the financial statements as a whole. Such deviations can be in the form of inadequate disclosure, or changes in accounting principles.
- Disclaimer Opinion
Is a refusal to provide an opinion on the financial summary presented by management due to a limitation on the extent of the audit or uncertainty about the amount of a certain estimate. - Adverse Opinions
Is the opinion given by the auditor who disagrees with the financial summary presented by management, because the auditor feels absolutely certain that the financial summary is truly inappropriate.
Audit Opinion Stages
Before the auditors give their opinion (opinion), they must carry out the stages of the company’s audit.
The stages of auditing according to Arens et al (2008) are as follows:
- Planning and promulgation of audit approach.
- Testing of controls and transactions.
- Performing analytical procedures and tests of details of balances.
- Completion and issuance of audit reports
