Скачать или смотреть Explanatory Paragraphs in Auditor's Reports: Issuer PCAOB | CPA Exam AUD

This video explains explanatory paragraphs in an auditor's report for issuers (publicly traded companies regulated by the SEC and audited by the PCAOB).

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0:00 introduction
Purpose: Explanatory paragraphs provide additional context or emphasize specific matters without modifying the auditor's opinion (0:45, 1:06). They draw the user's attention to particular events or topics.
Placement: They are typically placed after the opinion in an unqualified report (1:13).
When they are included:
Required by PCAOB: The video lists 10 situations where the PCAOB auditing standards require an explanatory paragraph. Examples include material changes in accounting principles (3:17), substantial doubt about going concern (4:03), and correction of material misstatements (6:06).
Auditor's Discretion: Auditors can also include them to raise attention to significant matters not explicitly required by PCAOB, such as unusually important subsequent events (9:24) or uncertainties regarding litigation (9:53).
Format: The paragraph must have an appropriate title to clarify its purpose (10:31).





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