ISA (UK) 700

This isn't examinable in AA because there is only one AA exam based on the international ISAs. To report "by exception" means just that - the auditor would be silent on matters that have been adequately disclosed in compliance with the code - but draw attention to omissions (for example). This would fall under other reporting responsibilities and so not affect the audit opinion, key audit matters, etc (because it's not disclosure in the financial statements and it does not fall within the scope of the audit of financial statements).