CPAs use the auditor's report to communicate their opinions of an entity's financial statements and related disclosures. Concerned parties, in turn, use the report to assess the integrity of the financial statements and the accuracy of the disclosures.

In 1988, the American Institute of CPAs auditing standards board established new wording for the standard unqualified audit report. It also revised the reporting requirements and types of audit reports allowed (for example, the subject-to report for uncertainties and except-for report for consistency departures were eliminated). The new wording appears in Statement on Auditing Standards no. 58, Reports on Audited Financial Statements.

With these audit reporting changes and modifications comes the need for CPAs to assess how financial statement users perceive the new reports and what impact the wording has had. One question is how users who continually encounter different types of reports are affected. Have these changes been acknowledged by those outside the CPA profession? If so, have they been beneficial?

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Copyright © 1994 American Institute of Certified Public Accountants. This article first appeared in Journal of Accountancy, November 1994, 59-64.

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