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Understandability of unmodified audit report on consolidated financial statements: A normative and advanced study of the international normalization

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  • Mondher Fakhfakh

Abstract

The consolidated audit report is considered among the most used tools of financial communication. It is a written message that conveys the opinion of the independent auditor on the consolidated financial statements. Theoretically, the same report can reinforce the mechanisms and systems of governance of corporate groups. The consolidated audit report must be readable by all users of the financial statements and readers of financial information. Comprehensibility of the report is a qualitative feature that enhances the usefulness of financial information. Internationally, the content of the consolidated audit report is standardized by the International Standard on Auditing 700. The linguistic imperfection of international accounting standardization can reduce the relevance and reliability of the consolidated audit report. This article analyzes the structure and language features of this report. It measures the linguistic performance of the illustration provided by the international standard ISA 700, and discusses the impact of the translation of the normative consolidated audit report.

Suggested Citation

  • Mondher Fakhfakh, 2016. "Understandability of unmodified audit report on consolidated financial statements: A normative and advanced study of the international normalization," Cogent Business & Management, Taylor & Francis Journals, vol. 3(1), pages 1258134-125, December.
    • Handle: RePEc:taf:oabmxx:v:3:y:2016:i:1:p:1258134
    DOI: 10.1080/23311975.2016.1258134
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    References listed on IDEAS

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    1. Hamadi Fakhfakh & Mondher Fakhfakh, 2010. "The impact of Revised ISA 700: an international empirical comparison," International Journal of Accounting, Auditing and Performance Evaluation, Inderscience Enterprises Ltd, vol. 6(2/3), pages 274-326.
    2. Mondher Fakhfakh, 2013. "Linguistic Performance and Comprehensibility of Auditors’ Reports in Tunisia," The IUP Journal of Accounting Research and Audit Practices, IUP Publications, vol. 0(2), pages 30-56, April.
    3. Mondher Fakhfakh, 2016. "Linguistic performance and legibility of auditors’ reports with modified opinions," Asian Review of Accounting, Emerald Group Publishing Limited, vol. 24(1), pages 105-130, February.
    4. Gangolly, Jagdish S. & Hussein, Mohamed E. & Seow, Gim S. & Tam, Kinsun, 2002. "Harmonization of the auditor's report," The International Journal of Accounting, Elsevier, vol. 37(3), pages 327-346.
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