Page 505 - Auditing Standards

As of December 15, 2017
income taxes of $_______ and $_______ have not been provided, resulting in an increase in net

income of $_______ and $_______, respectively.

Basis for Opinion

[Same basic elements as the Basis for Opinion section of the auditor's unqualified report in AS 3101]

[Signature]

We have served as the Company's auditor since [year].

[City and State or Country]

[Date]

Disclaimer of Opinion

.44 A disclaimer of opinion states that the auditor does not express an opinion on the financial statements.
An auditor may decline to express an opinion whenever he or she is unable to form or has not formed an

opinion as to the fairness of presentation of the financial statements in conformity with generally accepted
accounting principles. If the auditor disclaims an opinion, the auditor's report should give all of the substantive
reasons for the disclaimer.

.45 A disclaimer is appropriate when the auditor has not performed an audit sufficient in scope to enable
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him or her to form an opinion on the financial statements. A disclaimer of opinion should not be expressed
because the auditor believes, on the basis of his or her audit, that there are material departures from
generally accepted accounting principles (see paragraphs .18 through .39). When disclaiming an opinion
because of a scope limitation, the auditor should state in a separate paragraph or paragraphs all of the
substantive reasons for the disclaimer. He or she should state that the scope of the audit was not sufficient to

warrant the expression of an opinion. The auditor should not identify the procedures that were performed nor
include the paragraph describing the characteristics of an audit (that is, the scope paragraph of the auditor's
standard report); to do so may tend to overshadow the disclaimer. In addition, the auditor should also disclose

any other reservations he or she has regarding fair presentation in conformity with generally accepted
accounting principles.

.46 When the auditor disclaims an opinion, the auditor's report must include the basic elements as would

be required in an unqualified auditor's report under AS 3101, modified as follows:

a. The first section of the auditor's report must include the section title "Disclaimer of Opinion on the
Financial Statements" and the following elements:

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