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Must follow this sequences right?
1)Title
2)Addressee
3)Opinion paragraph
4)Basis of opinion paragraph
5)Going concern
6)Key audit matters
5)Management’s responsibilities
6)Auditors’ responsibilities
and so on……Previously the basis of opinion paragraph is placed before the opinion paragraph right? so the revised ISA 700 and 701 will alter this 2 items isn’t? That’s why the basis of opinion paragraph will be put otherwise after the opinion paragraph?
This is the sequence according to page 75 of the course notes
title
addressee
opinion paragraph
basis of opinion paragraph
management’s responsibilities
auditors’ responsibilities
date of the report
name of the engagement partner and signature, and
auditors’ addressIt’s believed that the reader wants to know the opinion and then have an explanation of the basis of that opinion
So, In the case of qualified opinion will be issued, the basis for qualified opinion will be placed immediately after NOT before the qualified opinion right?
That’s how I read it, yes. Check out the revised ISAs and see what you think but that’s the interpretation that I have
This is also what I have read in revised ISA 705 so I think it is correct. But the revised ISA 705 is not stated in ACCA study guide from Sep 2016 to June 2017, would this is possible to be examinable in coming Sep sitting?
This mean there is a lot of changes to the audit report especially the sequence which is different from the previous standards .
And I found out that in the revised ISA 700, the name of the engagement partner and signature comes first followed by Auditor’s address and date of the Auditor’s report which is quite different from what had stated in the page 75 of the course note.
I really wouldn’t worry about whether the reporting partner’s signature comes before or after the address and the positioning of the date is not something to get excited about
But you are correct in your first paragraph – there are quite a few changes made in response to users’ needs and observations
“which is quite different from what had stated in the page 75 of the course note.” – what do you mean “quite different”? Only the date is “incorrectly” placed and as I’ve just said, there’s no great issue about exactly where the date should go
Understood. This article is important right? https://www.accaglobal.com/za/en/student/exam-support-resources/fundamentals-exams-study-resources/f8/technical-articles/auditor-report.html
I don’t see how it could be anything other than extremely important – I suggest that there is an incredibly high percentage chance that this is asked in either September (very likely) or December (even more likely if it’s not in September’s exam)
Dear MikeLittle,
Sorry for interruption. Just to seek for clarification, because I’m glancing through the study text which I downloaded from OpenTuition website and it state that ‘the basis for opinion’ will be placed before ‘opinion’ paragraph. Is it out-dated? And we will have to follow the latest format according to Page 75 ‘OpenTuition’ P7 Notes (Opinion paragraph first, then only basis for opinion paragraph)?
2. Is Key audit matters (KAM) new thing? Because in the study text I see nothing related to ‘KAM’ section.
Thank you so much for your reply MikeLittle.
Regards
‘which I downloaded from OpenTuition website’ – I wasn’t aware that we HAD a study text!
Opinion followed by basis of opinion
KAMs – get happy with them – there’s a good chance that they will appear in September (or December, or even both!)
Here’s a link to a good article:
Hi Mike,
My understanding of the structure of the new audit report is this which is taken from PWC appendix 1:
https://www.pwc.com/gx/en/services/audit-assurance/publications/new-auditor-reporting-standard-iaasb-2015.html1. Opinion
2. Basis for Opinion
3. Material uncertainty regarding Going Concern (if applicable)
4. Emphasis of matter paragraph (if applicable)
5. KAM
6. Other matter paragraph (if applicable)
7. Other information (the auditors responsibilities in regards to other info are described here)
8. Management’s responsibilities
9. Auditors responsibilities
10. Date, Address and signatureAlso, KAM cannot be used if a disclaimer of opinion is issued, but must be used if a qualified or adverse opinion is given.
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