Which statement best describes a positive expression in an audit report issued after obtaining reasonable assurance?

Which statement best describes a positive expression in an audit report issued after obtaining reasonable assurance?

• A. The auditor concludes that the financial statements are true and fair.
• B. The auditor has found no errors in the financial statements.
• C. The auditor believes the financial statements are inaccurate but not material.
• D. The auditor cannot form an opinion.

Answer: (A)

The main idea is the auditor’s opinion after gathering sufficient evidence under reasonable assurance. A positive expression means the auditor is asserting that the financial statements are true and fair (or present fairly, in all material respects). This is the clean, unqualified opinion that the statements give a correct picture to users, reflecting fair treatment of material matters. Reason this is best: when reasonable assurance is obtained, the auditor has enough evidence to conclude there are no material misstatements that would mislead users. Saying the financial statements are true and fair directly communicates that they do not contain material misstatements and are free from bias in presentation and disclosures. Regarding the other statements: claiming no errors exist is too strong, because audits don’t guarantee the absence of all errors—only an absence of material misstatements. Saying the statements are inaccurate but not material would not align with a positive, unqualified opinion. If the auditor cannot form an opinion, that would lead to a disclaimer or something other than a positive expression.

The main idea is the auditor’s opinion after gathering sufficient evidence under reasonable assurance. A positive expression means the auditor is asserting that the financial statements are true and fair (or present fairly, in all material respects). This is the clean, unqualified opinion that the statements give a correct picture to users, reflecting fair treatment of material matters.

Reason this is best: when reasonable assurance is obtained, the auditor has enough evidence to conclude there are no material misstatements that would mislead users. Saying the financial statements are true and fair directly communicates that they do not contain material misstatements and are free from bias in presentation and disclosures.

Regarding the other statements: claiming no errors exist is too strong, because audits don’t guarantee the absence of all errors—only an absence of material misstatements. Saying the statements are inaccurate but not material would not align with a positive, unqualified opinion. If the auditor cannot form an opinion, that would lead to a disclaimer or something other than a positive expression.