Recently, I was engaged to review a client's internal control environment related to customer fund accounting and to provide my personal opinion to the board of directors. As a Certified Public Accountant (CPA), I need to ensure that the report clearly states that this opinion is provided in a consulting capacity, not as an auditor. Are there any available resources or disclaimer templates to indicate that I do not intend to issue an audit opinion?

In professional practice, it is crucial to distinguish between consulting opinions and audit opinions. Audit opinions are typically issued in accordance with Generally Accepted Auditing Standards (GAAS) and include assurance on the fairness of the financial statements as a whole; whereas consulting opinions are based on a specific agreed-upon scope and do not provide the same level of assurance. Therefore, including a clear and explicit disclaimer in the report helps avoid misunderstandings and protects the interests of relevant parties.

Core Elements of a Disclaimer

An effective consulting disclaimer should include at least the following elements:

  • Clear Identification: State that the opinion is provided by a consultant, not an independent auditor.
  • Scope Limitation: Explain that the review is limited to the specific agreed-upon areas (e.g., internal controls over customer fund accounting), not an audit of the entire set of financial statements.
  • Level of Assurance: Clarify that audit procedures were not performed, and therefore no audit assurance or audit opinion is provided.
  • Use Restriction: Indicate that the report is intended solely for the board of directors or specified management and is not suitable for other purposes.

Sample Template Reference

This report is prepared solely based on our agreed-upon scope as consulting advisors, to assist the board of directors in evaluating internal controls related to customer fund accounting. We have not performed audit or review procedures in accordance with Generally Accepted Auditing Standards, and therefore we do not express an audit opinion on the financial statements as a whole or on the effectiveness of internal controls. This report is intended solely for internal use by the board of directors and should not be used for any other purpose.

Professional Resources and Recommendations

In addition to the above template, you may refer to the following resources:

  • Guidance on reporting and communication in the Statement on Standards for Consulting Services issued by the American Institute of Certified Public Accountants (AICPA).
  • Relevant international standards for consulting services or related codes of ethics issued by the International Federation of Accountants (IFAC).
  • Disclaimer templates provided by professional liability insurance companies or legal counsel, which should be tailored to the specific engagement letter terms.

Before finalizing, it is recommended to communicate with the client's legal counsel or your professional liability insurer to ensure the disclaimer complies with local regulations and contractual requirements. Additionally, be sure to place the disclaimer prominently in the report (e.g., on the cover page or before the opinion section) to reduce the risk of ambiguity.

If you need more specific wording, you can provide the engagement letter or report draft for further customization. However, please note that this response does not constitute legal advice; for specific issues, please consult a qualified attorney.