Which statement best describes a negative expression in an audit report?

Which statement best describes a negative expression in an audit report?

• A. The auditor has not found anything to bring to attention of users.
• B. The auditor has given a true and fair view.
• C. The auditor has issued a disclaimer.
• D. The auditor has identified material misstatements.

Answer: (A)

A negative expression is when the auditor indicates there is nothing material to report to users. Saying that the auditor has not found anything to bring to the attention of users directly communicates that there are no significant issues requiring emphasis. This aligns with the idea of a clean opinion, where the financial statements are presented fairly in all material respects and there’s nothing material discovered that would necessitate caution for users. The other statements describe different outcomes: a claim of a true and fair view is a positive summary of the overall opinion, not a negation of issues; a disclaimer reflects insufficient evidence to form an opinion; and identifying material misstatements points to problems that would lead to qualifying or adverse or modified wording rather than a negative expression.

A negative expression is when the auditor indicates there is nothing material to report to users. Saying that the auditor has not found anything to bring to the attention of users directly communicates that there are no significant issues requiring emphasis. This aligns with the idea of a clean opinion, where the financial statements are presented fairly in all material respects and there’s nothing material discovered that would necessitate caution for users.

The other statements describe different outcomes: a claim of a true and fair view is a positive summary of the overall opinion, not a negation of issues; a disclaimer reflects insufficient evidence to form an opinion; and identifying material misstatements points to problems that would lead to qualifying or adverse or modified wording rather than a negative expression.