ACCA AAA · Chapter 23
The Auditor’s Report 1: Overall Structure
Your chapter at a glance. Open any section, or keep the whole map in view.
Core sections and responsibilities
Auditor’s report structure and responsibilities
Opinion first
- Identify entity, period and financial statements audited
- State unmodified or modified opinion as appropriate
- True and fair view/present fairly in all material respects
Basis for Opinion
- Audit conducted in accordance with ISAs
- Independence and ethical compliance
- Sufficient appropriate evidence supports opinion
Management and TCWG
- Management prepares financial statements and assesses going concern
- Management maintains necessary internal control
- TCWG oversee financial reporting
Auditor
- Obtain reasonable assurance, not a guarantee
- Assess material misstatement from fraud or error
- Issue report containing opinion on financial statements as a whole
Identification
- Title: Independent Auditor’s Report
- Addressed to appropriate parties
- Engagement partner named where required
Completion
- Auditor’s signature, address and report date
- Report dated no earlier than evidence and approval
- Subsequent events duties change after report date
Conditional sections
- Going Concern or Material Uncertainty Related to Going Concern
- Key Audit Matters where required
- Emphasis of Matter or Other Matter where appropriate
- Other Information where applicable
Keep distinctions clear
- These sections do not themselves modify an opinion
- Modified opinion has corresponding Basis section
Reporting sections beyond the opinion
Extra sections purpose, placement and interaction
Selection
- Required for listed entities; may also be required otherwise
- Start with matters communicated with TCWG
- Identify matters needing significant auditor attention
- Select the most significant matters in the current audit
Description
- Why matter was significant and how audit addressed it
- Refer to related financial statement disclosure
- No separate opinion on individual KAMs
Emphasis of Matter
- Matter appropriately presented or disclosed in financial statements
- Fundamental to users’ understanding
- Refer to disclosure; state opinion is not modified
- Matter must not already be a KAM
Other Matter
- Matter outside the financial statements
- Relevant to audit, auditor’s responsibilities or report
- Example: predecessor audited comparative period
Scope and work
- Annual report content beyond financial statements and report
- Read for material inconsistency or apparent misstatement
- Audit opinion does not cover other information
If a problem is found
- Determine whether financial statements or other information is wrong
- Request correction and communicate with TCWG as needed
- Uncorrected other information may be reported separately
Do not substitute sections
- MURGC belongs in dedicated MURGC section
- Matter causing modified opinion belongs in Basis for Modified Opinion
- KAM does not replace management disclosure or modification
- EoM cannot make up for inadequate disclosure
Typical order
- Opinion → Basis → Going Concern/MURGC → KAM
- EoM before/after KAM according to significance
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