INDEPENDENT AUDITOR'S REPORT

To the Shareholders of ABC Company [or Other Appropriate Addressee]

Report on the audit of the Consolidated Financial Statements

Opinion

In our opinion, the accompanying consolidated financial statements present fairly, in all
material respects, (or give a true and fair view of) the consolidated financial position of ABC
Company and its subsidiaries (the Group) as at December 31, 20X1, and (of) their
consolidated financial performance and their consolidated cash flows for the year then ended
in accordance with International Financial Reporting Standards (IFRSs).

We have audited the consolidated financial statements of the Group, which comprise the
consolidated statement of financial position as at December 31, 20X1, and the consolidated
statement of comprehensive income, consolidated statement of changes in equity and
consolidated statement of cash flows for the year then ended, and notes to the consolidated
financial statements, including a summary of significant accounting policies.

Basis for Opinion

We conducted our audit in accordance with International Standards on Auditing (ISAs). Our
responsibilities under those standards are further described in the Auditor's Responsibilities
for the Audit of the Consolidated Financial Statements section of our report. We are
independent of the Group within the meaning of [indicate relevant ethical requirements or
applicable law or regulation] and have fulfilled our other responsibilities under those ethical
requirements. We believe that the audit evidence we have obtained is sufficient and
appropriate to provide a basis for our opinion.

Key Audit Matters

Key audit matters are those matters that, in our professional judgment, were of most
significance in our audit of the consolidated financial statements. Key audit matters are
selected from the matters communicated with [those charged with governance], but are not
intended to represent all matters that were discussed with them. Our audit procedures relating
to these matters were designed in the context of our audit of the consolidated financial
statements as a whole. Our opinion on the consolidated financial statements is not modified
with respect to any of the key audit matters described below, and we do not express an
opinion on these individual matters.

The four specific topics and content presented below are purely for illustrative purposes. This
section would be tailored to the facts and circumstances of the individual audit engagement
and the entity. Accordingly, the IAASB has intentionally drafted these examples in a manner
that illustrates that Key Audit Matters will vary in terms of the number and selection of topics
addressed and the nature in which they may be described, and are intended to be consistent
with the disclosures in the entity's consolidated financial statements.

Goodwill
Under IFRSs, the Group is required to annually test the amount of goodwill for impairment.
This annual impairment test was significant to our audit because the assessment process is
complex and highly judgmental and is based on assumptions that are affected by expected
future market or economic conditions, particularly those in [Countries X and Y]. As a result,
our audit procedures included, among others, using a valuation expert to assist us in
evaluating the assumptions and methodologies used by the Group, in particular those relating
to the forecasted revenue growth and profit margins for [name of business lines]. We also
focused on the adequacy of the Group's disclosures about those assumptions to which the
outcome of the impairment test is most sensitive, that is, those that have the most significant
effect on the determination of the recoverable amount of goodwill. The Group's disclosures
about goodwill are included in Note 3, which specifically explains that small changes in the
key assumptions used could give rise to an impairment of the goodwill balance in the future.

Valuation of Financial Instruments

The Group's disclosures about its structured financial instruments are included in Note 5. The
Group's investments in structured financial instruments represent [ x%] of the total amount of
its financial instruments. Because the valuation of the Group's structured financial instruments
is not based on quoted prices in active markets, there is significant measurement uncertainty
involved in this valuation. As a result, the valuation of these instruments was significant to
our audit. The Group has determined it is necessary to use an entity-developed model to value
these instruments, due to their unique structure and terms. We challenged management's
rationale for using an entity-developed model, and discussed this with [those charged with
governance], and we concluded the use of such a model was appropriate. Our audit
procedures also included, among others, testing management's controls related to the
development and calibration of the model and confirming that management had determined it
was not necessary to make any adjustments to the output of the model to reflect the
assumptions that marketplace participants would use in similar circumstances.

Acquisition of XYZ Business

As described in Note 2, in December 20X1, the Group completed the acquisition of XYZ
Business. XYZ Business was a division of a large private company. As of December 31,
20X1, the Group has completed the initial acquisition accounting on a preliminary basis. The
Group will finalize the initial acquisition accounting during 20X2, and the amounts recorded
as of December 31, 20X1 could change. We focused on this transaction because it is material
to the consolidated financial statements as a whole and the fact that values had not previously
been assigned to the division as a standalone operation. In addition, determining the
assumptions that underlie the initial acquisition accounting and the useful lives associated
with the acquired intangible assets involves significant management judgment given the
nature of the [name of industry].

Revenue Recognition Relating to Long-Term Contracts

The terms and conditions of the Group's long-term contracts in its [ name of segment] affect
the revenue that the Group recognizes in a period, and the revenue from such contracts
represents a material amount of the Group's total revenue. The process to measure the amount
of revenue to recognize in the [name of industry], including the determination of the
appropriate timing of recognition, involves significant management judgment. We identified
revenue recognition of long-term contracts as a significant risk requiring special audit
consideration. This is because side agreements may exist that effectively amend the original
contracts, and such side agreements may be inadvertently unrecorded or deliberately
concealed and therefore present a risk of material misstatement due to fraud. In addition to
testing the controls the Group has put in place over its process to enter into and record long-
term contracts and other audit procedures, we considered it necessary to confirm the terms of
these contracts directly with customers and testing journal entries made by management
related to revenue recognition. Based on the audit procedures performed, we did not find
evidence of the existence of side agreements. The Group's disclosures about revenue
recognition are included in the summary of significant accounting policies in Note 1, as well
as Note 4.
Going Concern

The consolidated financial statements of the Group have been prepared using the going
concern basis of accounting. The use of this basis of accounting is appropriate unless
management either intends to liquidate the Group or to cease operations, or has no realistic
alternative but to do so. As part of our audit of the consolidated financial statements, we have
concluded that management's use of the going concern basis of accounting in the preparation
of the Group's consolidated financial statements is appropriate.

Management has not identified a material uncertainty that may cast significant doubt on the
Group's ability to continue as a going concern, and accordingly none is disclosed in the
consolidated financial statements of the Group. Based on our audit of the consolidated
financial statements of the Group, we also have not identified such a material uncertainty.
However, neither management nor the auditor can guarantee the Group's ability to continue as
a going concern.

Other Information

[The illustrative wording for this section is subject to the IAASB's finalization of proposed ISA
720 (Revised). The content of this section may include, among other matters: (a) a description
of the auditor's responsibilities with respect to other information; (b) identification of the
document(s) available at the date of the auditor's report that contain the other information to
which the auditor's responsibilities apply; (c) a statement addressing the outcome of the
auditor's work on the other information; and (d) a statement that the auditor has not audited
or reviewed the other information and, accordingly, does not express an audit opinion or a
review conclusion on it.]

Responsibilities of [Management and Those Charged with Governance or other

appropriate terms] for the Consolidated Financial Statements

Management is responsible for the preparation and fair presentation of these consolidated
financial statements in accordance with IFRSs, and for such internal control as management
determines is necessary to enable the preparation of consolidated financial statements that are
free from material misstatement, whether due to fraud or error. [Those charged with
governance] are responsible for overseeing the Group's financial reporting process.

Auditor's Responsibilities for the Audit of the Consolidated Financial Statements

The objectives of our audit are to obtain reasonable assurance about whether the consolidated
financial statements as a whole are free from material misstatement, whether due to fraud or
error, and to issue an auditor's report that includes our opinion. Reasonable assurance is a high
level of assurance, but is not a guarantee that an audit conducted in accordance with ISAs will
always detect a material misstatement when it exists. Misstatements can arise from fraud or
error and are considered material if, individually or in the aggregate, they could reasonably be
expected to influence the economic decisions of users taken on the basis of these consolidated
financial statements.

The remaining material in this section can be located in an Appendix to the auditor's report
(see paragraph 39 of proposed ISA 700 (Revised). When law, regulation or national auditing
standards expressly permits, reference can be made to a website of an appropriate authority
that contains the description of the auditor's responsibilities, rather than including this
material in the auditor's report (see paragraph 40 of proposed ISA 700 (Revised)).
As part of an audit in accordance with ISAs, we exercise professional judgment and maintain
professional scepticism throughout the planning and performance of the audit. We also:
 Identify and assess the risks of material misstatement of the consolidated financial
statements, whether due to fraud or error, design and perform audit procedures responsive
to those risks, and obtain audit evidence that is sufficient and appropriate to provide a
basis for our opinion. The risk of not detecting a material misstatement resulting from
fraud is higher than for one resulting from error, as fraud may involve collusion, forgery,
intentional omissions, misrepresentations, or the override of internal control.
 Obtain an understanding of internal control relevant to the audit in order to design audit
procedures that are appropriate in the circumstances, but not for the purpose of expressing
an opinion on the effectiveness of the entity's internal control.
 Evaluate the appropriateness of accounting policies used and the reasonableness of
accounting estimates and related disclosures made by management.
 Evaluate the overall presentation, structure and content of the consolidated financial
statements, including the disclosures, and whether the consolidated financial statements
represent the underlying transactions and events in a manner that achieves fair
presentation.
 Obtain sufficient appropriate audit evidence regarding the financial information of the
entities and business activities within the group to express an opinion on the consolidated
financial statements. We are responsible for the direction, supervision and performance of
the group audit. We remain solely responsible for our audit opinion.

We are required to communicate with [those charged with governance] regarding, among
other matters, the planned scope and timing of the audit and significant audit findings,
including any significant deficiencies in internal control that we identify during our audit.

We are also required to provide [those charged with governance] with a statement that we
have complied with relevant ethical requirements regarding independence, and to
communicate with them all relationships and other matters that may reasonably be thought to
bear on our independence, and where applicable, related safeguards.

Report on Other Legal and Regulatory Requirements

[The form and content of this section of the auditor's report would vary depending on the
nature of the auditor's other reporting responsibilities prescribed by local law, regulation, or
national auditing standards. Depending on the matters addressed by other law, regulation or
national auditing standards, national standard setters may choose to combine reporting on
these matters with reporting as required by the ISAs (shown in the Report on the Audit of the
Consolidated Financial Statements section), with wording in the auditor's report that clearly
distinguishes between reporting required by the ISAs and other reporting required by law or
regulation.]

The engagement partner responsible for the audit resulting in this independent auditor's report
is [name].

[Signature in the name of the audit firm, the personal name of the auditor, or both, as
appropriate for the particular jurisdiction]
[Auditor Address]
[Date]