3-29 (OBJECTIVES 3-1, 3-3, 3-7, 3-9)The International Auditing and Assurance Standards Board (IAASB) recently revised its standards related to audit reporting. ISA 700 (Revised),Forming an Opinion and Reporting on Financial Statements, requires the auditor's report to include the following paragraphs under the headings "Basis for Opinion" and "Auditor's Responsibilities for the Audit of the Financial Statements":

Basis for Opinion

We conducted our audit in accordance with International Standards on Auditing (ISAs). Our responsibilities under those standards are further described in the Auditor's Responsibilities for the Audit of the Financial Statements section of our report. We are independent of the Company in accordance with the International Ethics Standards Board for Accountants' Code of Ethics for Professional Accountants (IESBA Code) together with the ethical requirements that are relevant to our audit of the financial statements in [the home country] and we have fulfilled our other ethical responsibilities in accordance with these requirements and the IESBA Code. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

Auditor's Responsibilities for the Audit of the Financial Statements

Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor's report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with ISAs will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements.

Required

Read the preceding paragraphs to answer the following:

a. How does the information in the preceding paragraphs compare to the information in the paragraphs under the "Auditor's Responsibility" heading in the standard unmodified opinion audit report example for a nonpublic company shown in Figure 3-1 (p. 48)?

b. How does the information in the preceding paragraphs compare to the information in the scope paragraph in the standard unmodified opinion audit report example for a public company shown in Figure 3-3 (p. 52)?

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c. Discuss whether you believe these paragraphs in the ISA audit report improve auditor communications to users of the financial statements.

FIGURE 3-1 Standard Unmodified Opinion Audit Report on Comparative Statements for a U.S. Nonpublic CompanyAICPA Auditing Standards

ANDERSON and ZINDER, P.C.

Certified Public Accountants

Park Plaza East - Suite 100

Denver, Colorado 80110

303/359-0800

Report Title

INDEPENDENT AUDITOR'S REPORT

Audit Report Address

To the Board of Directors and Stockholders

General Ring Corporation

Introductory Paragraph

We have audited the accompanying balance sheets of General Ring Corporation as of December 31, 2016 and 2015, and the related statements of income, changes in stockholders' equity, and cash flows for the years then ended, and the related notes to the financial statements.

Management's Responsibility

Management's Responsibility for the Financial Statements

Management is responsible for the preparation and fair presentation of the financial statements in accordance with accounting principles generally accepted in the United States of America; this includes the design, implementation, and maintenance of internal control relevant to the preparation and fair presentation of financial statements that are free from material misstatement, whether due to fraud or error.

Auditor's Responsibility

Auditor's Responsibility

Our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits in accordance with auditing standards generally accepted in the United States of America. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement.

Scope paragraph

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor's judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the entity's preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity's internal control. Accordingly, we express no such opinion. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by management, as well as evaluating the overall presentation of the financial statements.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.

Auditor's Opinion

Opinion

In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of General Ring Corporation as of December 31, 2016 and 2015, and the results of their operations and cash flows for the years then ended in accordance with accounting principles generally accepted in the United States of America.

Signature and Address of CPA Firm

Denver, Colorado

Audit Report Date (Date Auditor Has Obtained Sufficient Appropriate Evidence

February 15, 2017

FIGURE 3-3 Standard Unmodified Opinion Audit Report on Comparative Statements for a U.S. Public CompanyPCAOB Auditing Standards

Introductory Paragraph

We have audited the accompanying balance sheets of Westbrook Company, Inc., as of December 31, 2016 and 2015, and the related statements of operations, equity, and cash flows for each of the three years in the period ended December 31, 2016. These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on the financial statements based on our audits.

Scope Paragraph

We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

Opinion Paragraph

In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of Westbrook Company, Inc., as of December 31, 2016 and 2015, and the results of its operations and cash flows for each of the three years in the period ended December 31, 2016, in conformity with accounting principles generally accepted in the United States of America.