Final answer:
An unqualified audit report must state that all of the following have been evaluated by the auditors, except the likelihood of the occurrence of fraud in the financial statements. Hence, option 1) is the correct answer.
Step-by-step explanation:
An unqualified audit report is a formal statement issued by auditors indicating that, in their professional judgment, the financial statements of a company are presented fairly in accordance with the applicable financial reporting framework. This positive assessment is based on a thorough examination of various factors. The auditors assess the overall presentation of the financial statements, ensuring that they provide a clear and accurate representation of the company's financial position and performance.
Additionally, auditors critically evaluate significant estimates made by management during the preparation of financial statements. This involves a careful examination of management's judgments and assumptions, particularly in areas where uncertainties and complexities may impact the reported figures. Furthermore, auditors scrutinize the accounting principles applied by management, verifying that they are in compliance with the relevant accounting standards and are consistently and appropriately applied throughout the financial statements.
However, it's noteworthy that while auditors assess the risk of material misstatement, including the risk of fraud, they don't provide an absolute guarantee of detecting fraud, even if it is material. Therefore, the explicit evaluation of the likelihood of the occurrence of fraud is not a stated component of an unqualified audit report. The report typically asserts the fairness of the financial statements based on the auditors' comprehensive assessment of presentation, estimates, and accounting principles.