Use the annual report in this link http://www.about.hsbc.co.om/-/media/oman/en/i
ID: 2528800 • Letter: U
Question
Use the annual report in this link http://www.about.hsbc.co.om/-/media/oman/en/investor-relations/annual-report-2016-english.pdf to answer the following questions. Go to “Report of Independent Registered Public Accounting Firm”& answer the following questions. Read the report carefully. (10 marks) 9-What do you understand by the term “independence in opinion”? Support your answer with evidence from Annual report of HSBC. (10 marks) 10-Write a summary on the auditor’s report, in your discussion you need to elaborate the key audit matters.
Explanation / Answer
INDEPENDENT OPINION
An auditor's opinion is a certification that accompanies financial statements based on an audit of the accountant's opinion of the procedures and records used to produce the statements regardless of whether material misstatements exist in the financial statements
opinion given by the auditor should not be effected by any other parties
different types of opinions are given by the auditor they are
1.Unqualified Opinion
An unqualified opinion is also known as a clean opinion. The auditor reports an unqualified opinion if the financial statements are presumed to be free from material misstatements
2.Qualified Opinion
A qualified opinion is given when a company’s financial records have not been presented in accordance with GAAP. Although the wording of a qualified opinion is very similar to an unqualified opinion, the auditor provides an additional paragraph including exclusions from the cleanliness of the financial statements and points out why the auditor report is not unqualified
3.Adverse Opinion
The most unfavorable opinion a business may receive is an adverse opinion. An adverse opinion indicates financial records are not in accordance to GAAP and are grossly misstated. An adverse opinion is an indicator of fraud, and public entities that receive an adverse opinion are forced to correct their financial statements and have the financial statements re-audited
4.Disclaimer of Opinion
In the event the auditor is unable to complete the audit report due to absence of financial records or insufficient cooperation from management, the auditor issues a disclaimer of opinion
The auditor’s report is the final output of the audit process. Many users of the financial statements and stakeholders have called to have a more informative and relevant auditor’s report
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