[The following paragraph was effective for reports issued or reissued on or after January 1, 1989. It was amended by the Board in PCAOB Release 2008-001 (January 29, 2008), effective November 15, 2008.

To return to current version.]


Justification for the expression of the auditor's opinion rests on the conformity of his or her audit with generally accepted auditing standards and on the findings. Generally accepted auditing standards include four standards of reporting. fn 2 This section is concerned primarily with the relationship of the fourth reporting standard to the language of the auditor's report.

Footnotes (AU Section 508 — Reports on Audited Financial Statements):

fn 2 This section revises the second standard of reporting as follows:     The report shall identify those circumstances in which such principles have not been consistently observed in the current period in relation to the preceding period. Previously, the second standard required the auditor's report to state whether accounting principles had been consistently applied. As revised, the second standard requires the auditor to add an explanatory paragraph to his report only if accounting principles have not been applied consistently. (See section 420, Consistency of Application of Generally Accepted Accounting Principles.) Paragraphs .17-.19 of this section provide reporting guidance under these circumstances.