What are the basic elements of the Auditor‟s Report?
The auditor‟s report includes the following basic elements, ordinarily, in the following layout:
|Title||ð The auditor‟s report shall have a title that clearly indicates that it is the repor
of an independent auditor.
|(“INDEPENDENT AUDTORS REPORT”)|
|Addressee||ð The auditor‟s report shall be addressed, as appropriate, based on th circumstances of the engagement.
ð Law, regulation or the terms of the engagement may specify to whom th auditor‟s report is to be addressed in that particular jurisdiction.
ð The auditor‟s report is normally addressed to those for whom the report i
prepared, often either to the shareholders or to TCWG of the entity whos financial statements are being audited.
|Auditor’s Opinion||ð The first section of the auditor‟s report shall include the auditor‟s opinion and shall have the heading “Opinion.”
ð The Opinion section of the auditor‟s report shall also:
a. Identify the entity whose financial statements have been audited;
b. State that the financial statements have been audited;
c. Identify the title of each statement comprising the financial statements;
d. Refer to the notes, including the summary of significant accounting policies; and
e. Specify the date of, or period covered by, each financial statement comprising the financial statements.
ð The auditor‟s opinion Modified opinion or Unmodified opinion, as the cas
may be, shall be expressed in this paragraph
|Basis for Opinion||ð The auditor‟s report shall include a section, directly following the Opinio section, with the heading “Basis for Opinion”, that:
a. States that the audit was conducted in accordance with NSAs
b. Refers to the section of the auditor‟s report that describes the auditor‟s responsibilities under the NSAs;
c. Includes a statement that the auditor is independent of the entity in accordance with the relevant ethical requirements relating to the audit, and has fulfilled the auditor‟s other ethical responsibilities in accordance with these requirements.
d. States whether the auditor believes that the audit evidence the auditor
has obtained is sufficient and appropriate to provide a basis for the auditor‟s opinion.
|Going Concern||ð Where applicable, the auditor shall report in accordance with NSA 57
(Revised)- Going Concern.
|Key Audit Matters||ð For audits of complete sets of general-purpose financial statements of liste entities, the auditor shall communicate key audit matters in the auditor‟ report in accordance with NSA 701 (Key Audit Matters).
ð When the auditor is otherwise required law or regulation or decides t
communicate key audit matters in the auditor‟s report, the auditor shall do s in accordance with NSA 701.
|Other Information||ð Where applicable, the auditor shall report in accordance with NSA 72
|Responsibilities for th Financial Statements||ð The auditor‟s report shall include a section with a heading “Responsibilitie of Management for the Financial Statements.”
ð This section of the auditor‟s report shall describe management‟ responsibility for:
a. Preparing the financial statements in accordance with the applicable
FRF and for such internal control as management determines is
|necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error; and
b. Assessing the entity‟s ability to continue as a going concern15 and whether the use of the going concern basis of accounting is appropriate
|Auditor’s Responsibilitie for the Audit of th Financial Statements||ð The auditor‟s report shall include a section with the heading “Auditor‟ Responsibilities for the Audit of the Financial Statements.”
ð This section of the auditor‟s report shall:
a. State that the objectives of the auditor are to:
1. Obtain reasonable assurance about whether the financial statement as a whole are free from material misstatement, whether due t fraud or error; and
2. Issue an auditor‟s report that includes the auditor‟s opinion.
b. State that reasonable assurance is a high level of assurance, but is not guarantee that an audit conducted in accordance with NSAs will alway detect a material misstatement when it exists; and
c. State that misstatements can arise from fraud or error and explai under what circumstances they are considered material
In this section the auditor also states his responsibilities for:
a. Assessing the risk of material misstatements
b. Understanding the internal control system
c. Evaluating the appropriateness of accounting policies
d. Concluding the appropriateness of the managements use of goin concern basis
e. Communication with TCWG etc.
|Other Reportin Responsibilities||ð For other matters to be reported as per the requirements of other laws an regulations the other reporting responsibilities shall be addressed in separate section in the auditor‟s report with a heading titled “Report on Othe
Legal and Regulatory Requirements” or otherwise as appropriate
|Name of Engagemen Partner||ð The name of the engagement partner shall be included in the auditor‟s repor on financial statements of listed entities unless, in rare circumstances, suc disclosure is reasonably expected to lead to a significant personal securit threat.
ð Naming the engagement partner in the auditor‟s report is intended to provid further transparency to the users of the auditor‟s report on financia
statements of a listed entity.
|Signature of the Auditor||ð The auditor‟s report shall be signed. The auditor‟s signature is either in th name of the audit firm, the personal name of the auditor or both, a
appropriate for the particular jurisdiction.
|Auditor’s Address||ð The auditor‟s report shall name the location in the jurisdiction where th
|Date of the Auditor’s Repor||ð The auditor‟s report shall be dated no earlier than the date on which th
auditor has obtained sufficient appropriate audit evidence on which to bas the auditor‟s opinion on the financial statements