W18 Reporting Flashcards
What are the contents of an audit report
Title
Addressee
Auditors opinion
Basis of Opinion
Going concern (where applicable)
Key audit matters
Responsibilities of management
Auditors responsibilities
Other reporting responsibilities
Signature, auditors address and date
What are key audit matters
are those that in the auditor’s professional judgement were of most significance in the audit and are selected from matters communicated to those charged with governance
What types of opinion can an auditor give
Unmodified opinion
- f.s give a true and fair view
unmodified opinion but report contains additional communication
- f.s give a true and fair view but there is additional communication required to bring something to the attention of users
modified opinion
-f.s dont give a true and fair view or the auditor has been unble to obtain sufficient appropriate audit evidence to determine whether they do or don’t
Why are modified opinions given
The auditor concludes based on the evidence obtained that the f.s as a whole are not free from material misstatement
or
the auditor is unable to obtain sufficient appropriate audit evidence to conclude that the financial statements as a whole are free from material misstatement
Wwhat is pervasive
Pervaise effects on the f.s are those that in the auditors judgement
- are not confined to specific elements, accounts or items of the finaancial statements
What is pervasive
Pervasive effects on the f.s are those that in the auditors judgement
- are not confined to specific elements, accounts or items of the financial statements
or
- if so confined, represent or could represent a substantial proportion of the financial statements
or
- in relation to disclosures are fundamental to user’s understanding of the financial statements
- the auditor comes to a conclusion as to whether the errors/omissions they found are
-material or material and pervasive
How can modified opinions be categorised
Qualified - on the basis of misstatement
Qualified - on the basis of an inability to obtain sufficient appropriate audit evidence
Adverse
Disclaimer
Modified opinion - on the basis of misstatement
How would the opinion be presented as
Given when the auditor concludes that the financial statements are materially misstated
◈ Opinion would be presented as
‘Except for the effects of the matter(s) described in the Basis for Qualified Opinion paragraph, the financial statements give a true and fair view’
Modified opinion on the basis of an inability to obtain sufficient appropriate audit evidence
How would the opinion be presented as
given when auditor cant obtain sufficient appropriate audit evidence to base their opinion but conclude, the possible effects on the f.s of undetected misstatements could be material but not pervasive
Opinion would be presented as
‘Except for the effects of the matter(s) described in the Basis for Qualified Opinion paragraph, the financial statements give a true and fair view’
Modified opinion - aadverse
How would the opinion be presented as
Given when the auditor concludes that misstatements, individually or in the aggregate are both material and pervasive
The financial statements do not give a true and fair view
Opinion would be presented as
‘Because of the significance of the matter(s) discussed in the Basis for Adverse Opinion paragraph, the financial statements do not give a true and fair view’
Modified Opinion - Disclaimer
How would the opinion be presented as
Given when the auditor is unable to obtain sufficient appropriate audit evidence on which to base the opinion, concluding that the possible effects on the financial statements of undetected misstatements, if any, could be both material and pervasive
Would be presented as
‘Because of the significance of the matter(s) described in the Basis for Disclaimer of Opinion paragraph, we have not been able to obtain sufficient appropriate audit evidence to provide a basis for an audit opinion. Accordingly, we do not express an opinion on the financial statements
What additional communication may the auditor be required to make in the auditors report
Auditor may be required to make additional communication even if the statements give a true and fair view
Material uncertainty related to goingconcern
- Emphasis of matter paragraph
- Other matter paragraph
Additional communication - material uncertainty related to going concern
This section is included where there is material uncertainty regarding the going concern status which has been adequately disclosed in the financial statements
◈ The auditor uses this section to draw the attention of the user to the clients disclosure note
Additional communication - emphasis of matter paragraph
refer to a matter that has been adequately presented or disclosed in the financial statements but in the auditor’judgement these matters are of such fundamental importance to the users’understanding of the financial statements that the users should have their attention drawn to it
Additional communication - other matter paragraph
included in the auditor’s report if the auditor considers it necessary to communicate to the users matters other than those presented and disclosed in the financial statements that, in their judgement, are relevant to understanding the audit, the auditor’s responsibilities, or the auditors report
