Audit and Assurance Practice Exam

The phrase that an auditor should avoid using when qualifying an audit opinion is "subject to." This terminology can create confusion regarding the auditor's stance on the financial statements being audited. The phrase is often seen as ambiguous and does not clearly convey the auditor's level of assurance or the specific circumstances leading to the qualification.

Auditors aim to communicate their findings and opinions clearly and unambiguously. Therefore, more definitive phrases such as "in our opinion" or "except for" are preferable when stating an opinion, as they reflect the auditor's professional judgment about the financial statements in relation to the auditing standards. The phrase "based on our review" typically pertains to compilations or limited reviews rather than a full audit, and its usage conveys a clear type of audit or assurance engagement.

In summary, avoiding vague phrases enhances the clarity and effectiveness of the auditor's communication. This is essential in maintaining trust and understanding among the financial statement users who rely on the auditor's opinion.