Chapter Eighteen Reports on Audited Financial Statements

1. Chapter Eighteen Reports on Audited Financial Statements

2. The Standard Audit Report with an Unmodified Opinion The standard audit report with an unmodified opinion is issued when the financial statements conform to the applicable financial reporting framework. • Nine Elements • Report title • Addressee • Introductory paragraph • Management’s responsibility • Auditor’s responsibility • Auditor’s opinion • Auditor’s signature • Audit report date. • Auditor’s address

5. The Standard Audit Report with an Unmodified Opinion – Prior ISA 700

6. An Emphasis of Matter Paragraph and an Other Matters Paragraph An emphasis of matter paragraph does not affect the auditor’s opinion because it can only be included in the audit report if the matter is presented or disclosed in the financial statements in accordance with the applicable financial reporting framework. An other matters paragraph does not affect the auditor’s opinion because it relates to matters other than those required to be presented or disclosed in the financial statements.

7. An Emphasis of Matter Paragraph for a Going-Concern Uncertainty

8. Emphasis of Matter Paragraphs The matter is both unusual and of fundamental importance to the user’s understanding of the financial statements. • Significant uncertainties. • Significant and unusual related party transactions. • Early application of a new accounting principle. • A subsequent event disclosed in the financial statements. • A matter such as a major catastrophe which is disclosed in a note to the financial statements, that has had, or continues to have, a significant effect on the entity’s business or operations.

9. An Emphasis of Matter Paragraph for a Significant Uncertainty

10. Other Matters Paragraphs • Avoidance of auditor association with misleading information in a document containing audited financial statements. • Matters that provide further explanation of the auditor’s responsibilities in the audit of the financial statements or of the auditor’s report thereon that the auditor may be required or permitted to elaborate on by standards, laws, or generally accepted practice in a jurisdiction. • In rare and unusual circumstances, other matters that the auditor considers relevant to communicate to the user.

11. An Other Matters Paragraph

12. Audit Reports with Modification to the Auditor’s Opinion Qualified Adverse Disclaimer

14. Results from an inability to obtain sufficient appropriate evidence about some component of the financial statements. Results when financial statements are materially affected by a departure from the applicable financial reporting framework. Conditions of Modification Scope Limitation Departure from the Applicable Financial Reporting Framework

15. Disclaimer of Opinion - Scope Limitation

16. Qualified Opinion – Scope Limitation

17. Qualified Opinion – Statements not in Accordance with the Applicable Financial Reporting Framework

18. Adverse Opinion – Statements not in Accordance with the Applicable Financial Reporting Framework

19. Special Reporting Issues Reports on comparatives. Other information. Special reports.

20. Reports on Comparatives Corresponding figures for the prior period are an integral part of the current period financial statements and are intended to be read in conjunction with the amounts of the current period. Comparative financialstatements are considered separate financial statements and are included for comparison with the financial statements of the current period.

21. Report on Comparative Financial Statements - Unmodified Opinion

22. Report on Corresponding Figures – Qualified Opinion

23. Other Information in Documents Containing Audited Financial Statements The auditor has no responsibility beyond the financial information contained in the report, and he or she has no obligation to perform any audit procedures to corroborate the other information. However, the auditor is required to read the other information and consider whether it is consistent with the information contained in the audited financial statements. Annual Reports

24. Report on a Material Inconsistency

25. Special Reports Components of financial statements. Financial statements prepared on an other comprehensive basis of accounting. Compliance with contractual agreements related to financial statements.

26. Financial Statements Prepared on a Other Comprehensive Basis of Accounting to Meet the Needs of Specific Users Regulatory Basis Tax Basis Cash Basis

27. Components of Financial Statements In some situations an auditor may be engaged to audit a single financial statement, specified elements, accounts, or items of the financial statements. Financial reporting framework such as IFRSs Other comprehensive basis of accounting (OCBOA) Basis of Accounting Basis of accounting prescribed by a contract or agreement

28. Reports on Compliance with Contractual Agreements Related to Audited Financial Statements • An auditor may be asked to report on an entity’s compliance with certain contractual agreements related to audited financial statements. • The auditor’s report should state whether, in the auditor’s opinion, the entity has complied with the particular provisions of the agreement.

29. End of Chapter 18