[Sandy]

An auditor identified a material weakness in December. The client was informed and corrected it shortly after the “as of date” (December 31); the auditor agrees that the correction eliminates the material weakness as of January 31. The appropriate report under a PCAOB Standard 5 audit of internal control is
Adverse.
Unqualified.
Unqualified with explanatory language relating to the material weakness.
Qualified.

The answer is Adverse opinion.
However, I cannot find where in PCAOB says “as of date.”
For the FS audit report, if the management corrects the misstatement before audit report date, the auditor can still give unqualified opinion.
I don’t understand why it’ s not the case for ICFR report.

[Mike J]

Think of it this way. The auditor checks, tests, examines, etc for thing that exist during a given time frame (read as of a certain date). Here there was a material weakness that existed during the time under audit. Thus, the auditor must give an adverse opinion about the financial statements for the time as of the date in question.

AUD - 90
BEC - 79
FAR - 77
REG - 77

They don't trust JUST ANYBODY to count beans

[jdurham1994]

I could be completely wrong here, but I am just taking a shot at it.

Using Becker, it says that “If the material weaknesses are subsequently eliminated, management may wish to communicate this..blah blah blah” and they need a NEW, voluntary engagement that is literally only to express an opinion on whether a previously reported material weakness has been eliminated.

So, in this case, since they didn't fix it until AFTER the “as of” date, thus making it subsequently eliminated, it would need a new engagement. So, in the original report, it has to stay an adverse opinion. However, if they have the auditor perform a new engagement (which needs a new written report and all that jazz), he may provide a new report that gives an unmodified opinion on this and this alone. This question does not give too much in detail and is trying to trick you with the auditor saying it is okay now, but they would need a whole other report for it. Just because he said it fixed it, doesn't mean he actually did all of the testing or was engaged to perform the new engagement. If you have Becker, I would highly suggest reading page A5-26 of Version 3.2. If not, please let me know and I can try my best to explain this more.

I probably explained this very poorly, and like I said I could be wrong still, but I hope this helps.

[Author]

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