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AAA Reporting

The document discusses the format and contents of an audit report. It covers key sections of the audit report including the auditor's responsibilities, planned scope and timing of the audit, significant findings from the audit, and independence. It also discusses determining and communicating key audit matters, and the impact of various issues on the audit report such as modifications to the opinion, going concern uncertainties, and other matters.

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119 views6 pages

AAA Reporting

The document discusses the format and contents of an audit report. It covers key sections of the audit report including the auditor's responsibilities, planned scope and timing of the audit, significant findings from the audit, and independence. It also discusses determining and communicating key audit matters, and the impact of various issues on the audit report such as modifications to the opinion, going concern uncertainties, and other matters.

Uploaded by

zonairbutt90809080
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Download as PDF, TXT or read online on Scribd
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Audit Report – Format and Contents

Matters to be Communicated to TCWG


1. The auditor’s responsibilities – A statement that the auditor is responsible for
in relation to the financial forming and expressing an opinion on the financial
statements statements.
– That the auditor’s work is carried out in accordance
with ISAs and in accordance with local laws and
regulations.

2. Planned scope and timing of This would include


audit – The audit approach to assessing the risk of serious
misstatement, whether arising from fraud or error.
– The audit approach to the internal control system
and whether reliance will be placed on it.
– The timing of interim and final audits, including
reporting deadlines.

3. Significant findings from the This heading could include:


audit – Significant difficulties encountered during the audit,
including delays in obtaining information from
management.
– Material weaknesses in internal control and
recommendations for improvement.
– Audit adjustments, whether or not recorded by the
entity, that have, or could have, a material effect on
the entity’s financial statements. For example, the
bankruptcy of a material receivable shortly after the
year-end that should result in an adjusting entry.

4. A statement on This would include:


independence issues – That the audit firm has ensured that all members of
affecting the audit (for listed the audit team have complied with the ethical
standards of ACCA.
entities only)
– That appropriate safeguards are in place where a
potential threat to independence has been identified.
Key Audit Matters
DETERMINING KAM
There are three matters which the ISA required the auditor to take into account when
making this determination

1. Areas of higher assessed risk of material misstatement, or significant risks identified


in accordance with ISA 315 (Revised).
2. Significant auditor judgments relating to areas in the financial statements that
involved significant management judgment, including accounting estimates that have
been identified as having high estimation uncertainty.
3. The effect on the audit of significant events or transactions that occurred during the
period.

The auditor shall determine which matters are of the most significance in the audit of financial
statements and these will be regarded as KAM.
COMMUNICATING KAM
Once the auditor has determined which matters will be included as KAM, the auditor must
ensure that each matter is appropriately described in the auditor’s report including a
description of:

1. Why the matter was determined to be one of most significance and therefore a key audit
matter, and
2. How the matter was addressed in the audit (which may include a description of the
auditor’s approach, a brief overview of procedures performed with an indication of their
outcome and any other key observations in respect of the matter).
Audit Report

Unmodified Modified

Changes in Additional
Opinion Paragraphs

Material Emphasis of
Other Matter
Uncertainty re Matter
Paragraph
Going Concern Paragraph
Auditors Report On F/S Prepared in Accordance With a Fair
Presentation Framework

1. Title

2. Addressee

3. Opinion

4. Basis for opinion

5. Key Audit Matters

6. Other information in the document containing the F/S

7. Responsibilities of management & TCWG

8. Auditor’s responsibilities for audit of F/S

9. Report on other legal and regulatory requirements

10.Engagement partner’s name

11.Signatures

12.Auditor’s address

13.Date
Impact of Various Issues on the Audit Report

1. Title
2. Addressee
3. Opinion: If modified, heading changes to name of modified opinion, wording of opinion
changes
4. Basis for opinion: If modified, heading changes to Basis for Qualified/Adverse/Disclaimer;
need to explain nature, amount, impact of issue and the relevant accounting standard
5. If needed, Material uncertainty re. going concern paragraph will be placed here.
6. Key Audit Matters
7. If needed, EOMP can be placed either here or before KAM
8. If needed, OMP will be placed here
9. Other information in the document containing the F/S: any uncorrected inconsistencies
in other information will be explained here.
10. Responsibilities of management & TCWG
11. Auditor’s responsibilities for audit of F/S
12. Report on other legal and regulatory requirements
13. Engagement partner’s name
14. Signatures
15. Auditor’s address
16. Date
Impact of Going Concern on Audit Report

Going Concern

Assumption
Uncertain
Incorrect

F/S prepared F/S not


Disclosure Disclosure
on Break up prepared on
Given Inadequate
basis breakup basis

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