ASA 510 - Initial Engagements – Opening Balances - April 2006
Audit Conclusions and ReportingAudit Conclusions and Reporting
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Audit Conclusions and Reporting
14 If, after performing audit procedures including those set out above, the auditor is unable to obtain sufficient appropriate audit evidence concerning opening balances, the auditor’s report shall include:
(a) a qualified opinion;
(b) a disclaimer of opinion; or
(c) an opinion which is qualified or disclaimed regarding the results of operations and unqualified regarding financial position.
15 Examples of modified auditor’s reports are included at Appendix 1. See also ASA 701 Modifications to the Auditor’s Report.
16 If the opening balances contain misstatements which could materially affect the current period’s financial report, under ASA 260 Communication of Audit Matters with Those Charged With Governance, the auditor needs to inform those charged with governance and management and, after having obtained management’s authorisation, the predecessor auditor, if any.
17 If the effect of the misstatement is not properly accounted for and adequately presented and disclosed, the auditor shall express a qualified opinion or an adverse opinion, as appropriate.
18 If the current period’s accounting policies have not been consistently applied in relation to opening balances and if the change has not been properly accounted for and adequately presented and disclosed, the auditor shall express a qualified opinion or an adverse opinion as appropriate.
19 If a modification regarding the prior period’s financial report remains relevant and material to the current period’s financial report, the auditor shall modify the current period’s auditor’s report accordingly.
20 If the entity’s prior period auditor’s report was modified, the auditor needs to consider the effect thereof on the current period’s financial report under paragraph 19 of this Auditing Standard. For example, if there was a scope limitation, such as one due to the inability to determine opening inventory in the prior period, the auditor may not need to qualify or disclaim the current period’s audit opinion.