Forming an Opinion on the Financial RepoForming an Opinion on the Financial Report

Forming an Opinion on the Financial Report

1. The auditor shall form an opinion on whether the financial report is prepared, in all material respects, in accordance with the applicable financial reporting framework.[9],[10]
2. In order to form that opinion, the auditor shall conclude as to whether the auditor has obtained reasonable assurance about whether the financial report as a whole is free from material misstatement, whether due to fraud or error. That conclusion shall take into account:
   1. The auditor’s conclusion, in accordance with ASA 330, whether sufficient appropriate audit evidence has been obtained;[11]
   2. The auditor’s conclusion, in accordance with ASA 450, whether uncorrected misstatements are material, individually or in aggregate;[12] and
   3. The evaluations required by paragraphs 12–15 of this Auditing Standard.
3. The auditor shall evaluate whether the financial report is prepared, in all material respects, in accordance with the requirements of the applicable financial reporting framework. This evaluation shall include consideration of the qualitative aspects of the entity’s accounting practices, including indicators of possible bias in management’s judgements. (Ref: Para. A1–A3)
4. In particular, the auditor shall evaluate whether, in view of the requirements of the applicable financial reporting framework:
   1. The financial report appropriately discloses the significant accounting policies selected and applied. In making this evaluation, the auditor shall consider the relevance of the accounting policies to the entity, and whether they have been presented in an understandable manner; (Ref: Para. A4)
   2. The accounting policies selected and applied are consistent with the applicable financial reporting framework and are appropriate;
   3. The accounting estimates and related disclosures made by management are reasonable;
   4. The information presented in the financial report is relevant, reliable, comparable, and understandable. In making this evaluation, the auditor shall consider whether:
      • The information that should have been included has been included, and whether such information is appropriately classified, aggregated or disaggregated, and characterised.
      • The overall presentation of the financial report have been undermined by including information that is not relevant or that obscures a proper understanding of the matters disclosed. (Ref: Para. A5);
   5. The financial report provides adequate disclosures to enable the intended users to understand the effect of material transactions and events on the information conveyed in the financial report; and (Ref: Para. A6)