Auditor Report Components and Phrases

Question 1

Title: Independent Auditor’s Report

Question 2

Addressed to the shareholders of the client

Question 3

Opinion (first)

Answer 3

1) Audited, list out the financial statements (five) included, the reporting period and year end.
2) Unmodified opinion: they give a true and fair view…applicable framework (IFRSs).
3) Qualified opinion - “except for”
4) Adverse opinion - “do not give a true and fair view”
5) Disclaimer of opinion - “no opinion”.

Question 4

Basis for Opinion (second)

Answer 4

1) Conducted according to ISAs (unabbreviated)
2) Independence as per Code of Ethical Conduct
3) “We believe the audit evidence we have obtained is sufficient and appropriate”.
4) Reason for modified opinion.

Question 5

MURGC (third)

Answer 5

1) Draw attention to note
2) Event and conditions where material uncertainty exists
3) Opinion is not modified in respect of the matter

Question 6

Key Audit Matters (four - listed companies)

Answer 6

1a) In professional judgement, most significant to audit of financial statements in the current period, not a separate opinion of matters but rather context of audit of financial statements as a whole.
1b) Note, value or disclosure in financial statements
2) Reason for focus (inherent risk, etc)
3) Audit procedures conducted (CASP)

Question 7

Other Information (six)

Answer 7

1) Management responsibility
2) Composition and non-composition (i.e. financial statements) of other information (annual report)
3) Opinion does not cover other information, and thus don’t express assurance conclusion.
3) Auditor responsibility - read and see is any material inconsistencies with financial statements. If find a material inconsistency, required to report the fact.
4) “Nothing to report in this regard”

Question 8

Responsibilities of Management and Board of Directors (seven)

Answer 8

1) Preparation and fair presentation of financial statements as per IFRSs.
2) Internal controls so financial statements free from financial statements due to error and fraud
3) Assessing ability for going concern and making appropriate disclosures and using appropriate going concern basis unless liquidating or ceasing trading
4) Board of Directors responsible to oversee Company’s financial reporting process.

Question 9

Responsibilities of Auditors (eight)

Answer 9

1) Reasonable assurance, issue audit report
2) Reasonable assurance is highest level of assurance but nota guarantee
3) Risk assessment, understanding of internal control, evaluate apporpriateness of accounting polcies, conclude appropriateness of going concern and drawing attention if material uncertainty exist of modify opinion if inadequate disclosures
4) Evaluate presentation, structure, content of financial statements
5) Communication to those charged with governance on planned scope, timing, significant audit findings, deficiencies of internal control.
6) Ethics requirements compliance statements
7) Key audit matters of current period determination. Describe unless law disallows.

Question 10

Other Legal and Regulatory Requirements (nine)

Answer 10

1) proper books of accounts
2) Conformity to Companies acct
3) Etc

Question 11

Engagement Partner name, date of report, signature, office address (last)

Question 12

Emphasis of Matters (four - unlisted companies)

Answer 12

1) Draw attention to note
2) Description
3) Do not modify opinion in respect to matter

Question 13

Other Matters (five)

Answer 13

• Another auditor audited
• Date of report
• Opinion type expressed