Incorrect audit opinions fail inspections despite sound fieldwork

An incorrect audit opinion fails the quality inspection even when the rest of the engagement follows good auditing practice.Tilintarkastajat PRH audit oversight (TIVA) treats incorrect opinions as particularly seriousTilintarkastajat: an outside user of the financial statements sees only the report.

The opinion section must name every calculation the financial statements consist ofTilintarkastajat: naming too few, or naming calculations the statements do not contain, both draw findingsTilintarkastajat. An unmodified opinion is unsafe where the statements omit a calculation or note required by the Accounting Act, the Accounting Ordinance or special legislation.Tilintarkastajat The other-information opinion under other reporting obligations must be present where other information accompanies the statementsTilintarkastajat, and must not be given where none existsTilintarkastajat.

Identified risks must connect to the procedures performedTilintarkastajat, and the report must agree with the audit file's conclusionsTilintarkastajat: a report contradicting the file is itself a findingTilintarkastajat; client-specific template fields also need completing correctly.

For related parties, the file must first record how management identifies the entity's lähipiiri or intressitahot circleTilintarkastajat, which transactions with the identified parties were foundTilintarkastajat and what evidence was obtainedTilintarkastajat. Narrow identification and undocumented procedures are recurring findingsTilintarkastajatTilintarkastajat. Documented conclusions must cover whether related-party disclosures in the financial statements and the management report are correct and sufficientTilintarkastajat. Communicate an identified deficiency to managementTilintarkastajat; where management makes no correction, assess its effect on the auditor's reportingTilintarkastajat.

Revenue work must cover every material revenue streamTilintarkastajat and every relevant assertionTilintarkastajat, since different streams carry different risks of material misstatement and the fraud risk in revenue recognition may attach to only some streams or assertionsTilintarkastajat. Cutoff procedures aimed at only one side of the reporting date need documented justificationTilintarkastajat. The file must identify the sales transactions testedTilintarkastajat, state the procedures appliedTilintarkastajat, say which assertion each evidencesTilintarkastajat, and record the conclusionsTilintarkastajat. Matching sales invoices to the general ledger gives no evidence of completeness, occurrence or cutoffTilintarkastajat. Assess the revenue-recognition fraud-risk presumption under ISA 240Tilintarkastajat and justify any rebuttal in the fileTilintarkastajat.

For inventories, test existence, completeness and valuation for every material class and relevant assertionTilintarkastajat. Where inventories include physical stock above materiality, obtain evidence of existence and condition under ISA 501 by attending the physical countTilintarkastajat; when the count takes place on another date, establish whether movements between that date and the reporting date were properly recorded; reconcile count results to the final stock list at the count dateTilintarkastajat, and the reporting-date final stock list to the balance sheetTilintarkastajat. Where attendance is impracticable, alternative procedures must still yield sufficient appropriate evidence; where neither route can do so, the opinion is modified under ISA 705.

For receivables, obtain existence evidence from outside the companyTilintarkastajat, for example external confirmations or matching invoices open at the reporting date against receipts on the bank statementTilintarkastajat, and gather sufficient evidence of valuationTilintarkastajat. For fixed assets, verify existence and agreement of the register with the ledgerTilintarkastajat, direct procedures at items and assertions capable of material misstatementTilintarkastajat, and cover cost formation, capitalisation criteria, depreciation and possible impairmentTilintarkastajat. Across balance-sheet items the file must let a later reviewer see which procedures were performedTilintarkastajat, what evidence they producedTilintarkastajat and which conclusions they supportTilintarkastajat, with procedures addressing the same assertions the risk assessment namedTilintarkastajat.

These are recurring findings, not new inspection themesTilintarkastajat: the 2025 annual quality-inspection report repeats earlier years' observationsTilintarkastajat, a repetition attributed to a different set of auditors inspected each year.

The articles invoke ISA 240 on fraud-related dutiesTilintarkastajat and ISA 501 on audit evidence for selected itemsTilintarkastajat; the inventory recommendation further points to ISA 705 on modified opinions and to Suomen Tilintarkastajat recommendation 5/2020 on attending counts held on another dateTilintarkastajat.