Final answer:
The correct option is 4). The introductory paragraph of the standard unmodified opinion audit report establishes the objective of the audit, outlines the responsibilities of the auditor and management, and directs the flow of information. The manner in which these functions are communicated parallels the structured format required by professional auditing standards.
Step-by-step explanation:
The introductory paragraph of the standard unmodified opinion audit report for a nonpublic company serves to perform several important functions. Firstly, it establishes the objective of the audit, which is to express an opinion on the financial statements. This statement informs the reader of the auditor's primary responsibility. Secondly, the introduction lays out the responsibilities of both the auditor and management. Management is responsible for the preparation and fair presentation of the financial statements, while the auditor's role is to conduct the audit in accordance with applicable auditing standards.
Although the options I, II, and III from the original question are not listed explicitly, if they were to correspond to these points, one might assume that I refer to the audit's objective, II to the auditor's responsibilities, and III to management's responsibilities. Therefore, the answer to which functions are performed by the introductory paragraph would likely be 4) I, II, and III.
When reviewing an audit report, the introductory paragraph should clearly indicate the purpose of the report. If the thesis statement is present, it would likely encapsulate the auditor's opinion on the financial statements, aligning with the purpose of the report. However, for an audit report, the term 'thesis statement' might be a bit misleading, as it is not structured like an academic paper but rather according to professional reporting standards.
Each body paragraph following the introduction in an audit report should correspond to the points made in the introductory paragraph, providing a consistent flow of information related to the auditor's opinion. Audit reports generally do not include body paragraphs for exploratory or argumentative purposes as in academic writing, therefore a lack of a clear point in a paragraph would suggest a need for revision.