Final answer:
An auditor must assess if uncorrected misstatements are material when expressing an unmodified opinion. It is essential to evaluate cumulative effects of misstatements and whether they could impact users' decisions. Materiality determination and ensuring overall accuracy of the financial statements are crucial aspects of the audit.
Step-by-step explanation:
When expressing an unmodified opinion, the auditor who evaluates the audit findings should determine whether uncorrected misstatements are material to the financial statements. This involves evaluating not just individual misstatements but also their cumulative effect.
While it is important that the client acknowledges and records the amount of identified misstatement, and that the auditor documents the misstatements in a management representation letter, the auditor's primary concern is assessing whether these misstatements, individually or collectively, could influence the economic decisions of users taken on the basis of the financial statements.
The determination of materiality is a matter of professional judgment and is influenced by the auditor's perception of the financial information needs of users of the financial statements.
The auditor will also consider whether the estimates of total misstatements include the amounts of adjusting entries already recorded by the client as this affects the overall presentation of the financial statements. It is crucial for the auditor to ensure that the financial statements as a whole are free from material misstatement, whether due to fraud or error, to provide an unmodified opinion.