Reports on Financial Statement Audits
An audit report is a letter communicating what was audited, management's and the auditor's responsibilities, what an audit entails, and the auditor's opinion. Most financial statement audits result in a three-paragraph standard audit report. The report uses standard language stating that, in the auditor's opinion, management's financial statements present fairly, in all material financial respects, position, results of operations, and cash flows in conformity with generally accepted accounting principles (GAAP). The language was first standardized in a 1934 t, "Audits of Corporate Reports," by George O. May, Price Water- house (today's PwC) senior partner and chair of the American Institute of Accountants (today's AICPA) Committee on Cooperation with Stock Exchanges. In 1949, following adoption of the ten generally accepted auditing standards (GAAS