standard audit report typically containing two paragraphs. The first paragraph, called the scope section, indicates what the auditor has done. The second paragraph is the opinion section and gives the auditor's findings. The short-form report conforms to the reporting requirements of the SEC and AICPA. If the degree or results of the audit are unsatisfactory, the auditor may qualify the scope or opinion paragraph. In such a case, the auditor does not issue an unqualified opinion but rather a qualified disclaimer, or adverse opinion. The standard short-form report follows:
TO THE BOARD OF DIRECTORS OF ABC COMPANY:
In our opinion, the accompanying balance sheet and statements of income and retained earnings present fairly the financial position of ABC Company at December 31, 2000, and the results of its operations for the year then ended, in conformity with generally accepted accounting principles applied on a basis consistent with that of the preceding year.
| XYZ and Co. |
| Certified Public Accountants |
