1. Discuss the differences between the US and UK "opinion" paragraphs of the auditors reports. What practical effects might these differences have?
In general the standard form that audit reports take in the US in comparison to that of the UK is very similar. In both countries the audit report seeks to give a second opinion as to the fairness of the financial statements and in both cases will state the auditors opinion regarding the fairness of these within the context of the accepted accounting standards within that particular country.
The two opinion paragraphs from the Caterpillar financial report 2002 and the Marks and Spencer 2002 at first read seem to state similar objectives which have been taken during the auditing, that of an independent party seeking to assure whether or not the financial records of that particular entity have been compiled and produced to the standards that are generally accepted and if not why so and that it will have been noted.
A major difference lies in a different usage of wording in both audits. The US audit for Caterpillar states that the financial reports have been presented 'fairly in all material respects, the financial position of caterpillar inc. and its subsidiaries at December 31, 2002, 2001 and 2000, and the results of their operations and their cash flows for each of the three years in the period ended December 31, 2002 in conformity with accounting principles generally accepted in the United states of America'. The UK equivalent for this phrasing used in their Audits is as follows : 'the financial statements give a true and fair view of the state of the affairs of the company and the group at 29 March 2003' and 'the financial statements have been properly prepared in accordance with the companies act 1985'...