In practice auditors usually need more information for justification of the negative conclusion, than for positive. The possible reason of it is unwillingness of auditors to report bad news. Auditor standards accurately specify that if the auditor has bases for the negative conclusion, he cannot avoid its delivery, having refused to make it.
Quarterly and additional information. According to the accounting principles interim (quarterly) financial information is not the basic and necessary element of the corresponding GAAP of financial reports. But if such information is provided, it has to correspond to the accounting principles. On the other hand, the DEMON demands to provide the interim information as the additional information which is not entering the main financial reports. Thus, the interim information is not obligatory from the point of view of FASB, but SEC is required. But FASB and GASB can demand representation to the main financial reports of additional information. Now as additional it is required to provide information on reserves of oil, gas and other mineral resources.
financial reports contain the instruction that this accountant is CPA1 or the auditor of the company. The report of SRA demands if it is known that the independent accountant is anyway connected with the given financial account, and most of users assumes that an inspection was carried out and this information is authentic. Therefore, SRA are obliged to notify users on nature of the performed works (if they were carried out) and about the conclusion according to these financial reports.
Auditors are in an optimum situation when have all information necessary for making decision on report form and content. If it is necessary to make the positive report, it is possible to use its standard form without any modifications.
As it is more fully stated in notes, 7 and 10 to the consolidated financial reports, the company performed certain operations with interested parties. It is impossible to define, whether are results of such operations the same, as results of operations with completely independent parties,
There can be a situation when auditors are not able to receive evidential information in the volume sufficient for the conclusion about financial reports in general. It occurs, when there is no confidence that the economic unit will continue the activity (the principle of a continuity) and when the audit inspection is carried out not completely. Refusal in issue of the conclusion is a result of absence sufficient
Clients in such cases usually want to use name SRA to increase trust to financial reports. But SRA are not able to afford to do it and to assume responsibility of check according to the standard auditor standards.
The decisions made concerning formulations of the report concern also ethical problems. Accountants need to estimate objectively influence of the report on the decisions made by users of information. The decisions concerning reports are connected and with technology of carrying out check, that is it is necessary to know the standard accounting principles and auditor standards.
Auditors have to present not only the conclusion according to financial reports, but also accurately state the content of the work. Data on kind of work, carried out by the auditor during an audit inspection are provided in the section. This part of the report is very important for disclosure of quality and scale of check.
During the using of others, than GAAP, account methods, the first standard of the reporting is considered observed if in the auditor report it is specified that financial reports are intentionally submitted not according to GAAP. At this criterion of GAAP are replaced with criteria which can be applied in this system of the account.
As a rule, auditors cannot give so-called negative confirmation by drawing up the conclusion about financial reports, which purpose - to show a financial position and results of operations of the company. Negative confirmation is expressed in the following situation: "We have no information testifying that reports are submitted incorrectly". In this situation there are no accurate instructions on that, accountants took sufficient measures to define, whether financial reports are truly submitted, or not.