37 The auditor’s report shall state that the responsibility of the auditor is to express an opinion on the financial report based on the audit.
38 The auditor’s report states that the auditor’s responsibility is to express an opinion on the financial report based on the audit in order to contrast it to the responsibility of those charged with governance for the preparation and fair presentation of the financial report.
39 The auditor’s report shall state that the audit was conducted in accordance with Australian Auditing Standards. The auditor’s report shall also explain that those standards require that the auditor complies with relevant ethical requirements relating to audit engagements and that the auditor plans and performs the audit to obtain reasonable assurance whether the financial report is free from material misstatement.
40 The reference to Australian Auditing Standards conveys to the reader that the audit has been conducted in accordance with established standards.
41 ASA 200 specifies what is required in order to conduct an audit in accordance with Australian Auditing Standards. Under ASA 200, the auditor is not permitted to represent compliance with Australian Auditing Standards unless the auditor has complied fully with all of the Australian Auditing Standards relevant to the audit.
42 The auditor’s report shall describe an audit by stating that:
(a) an audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial report;
(b) the procedures selected depend on the auditor’s judgement, including the assessment of the risks of material misstatement of the financial report, whether due to fraud or error. In making those risk assessments, the auditor shall consider internal control relevant to the entity’s preparation and fair presentation of the financial report 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. In circumstances when the auditor also has a responsibility to express an opinion on the effectiveness of internal control in conjunction with the audit of the financial report, the auditor shall omit the phrase that the auditor’s consideration of internal control is not for the purpose of expressing an opinion on the effectiveness of internal control; and
(c) an audit also includes evaluating the appropriateness of the accounting policies used, the reasonableness of accounting estimates made by those charged with governance, as well as the overall presentation of the financial report.
43 The auditor’s report shall state that the auditor believes that the audit evidence the auditor has obtained is sufficient and appropriate to provide a basis for the auditor’s opinion.
Auditor’s Opinion
44 An unqualified opinion shall be expressed when the auditor concludes that the financial report gives a true and fair view or presents fairly, in all material respects, in accordance with the applicable financial reporting framework.
45 When expressing an unqualified opinion, the auditor shall include a section headed “Auditor’s Opinion”. The opinion paragraph of the auditor’s report shall state the auditor’s opinion that the financial report gives a true and fair view or presents fairly, in all material respects, in accordance with the applicable financial reporting framework (unless the auditor is required by law or regulation to use different wording for the opinion, in which case the prescribed wording shall be used).
46 When Australian Accounting Standards are not used as the financial reporting framework, the reference to the financial reporting framework in the wording of the opinion shall identify the jurisdiction or country of origin of the financial reporting framework.
47 The auditor’s opinion states that the financial report gives a true and fair view of or presents fairly, in all material respects, the information that the financial report is designed to convey (which is determined by the financial reporting framework). For example, in the case of a financial report prepared in accordance with Australian Accounting Standards, the auditor expresses an opinion that the financial report gives a true and fair view of or presents fairly, in all material respects, the financial position of the entity as at the end of the period and the entity’s financial performance and cash flows for the period then ended.
48 To advise the reader of the context in which the auditor’s opinion is expressed, under paragraph 45 of this Auditing Standard, the auditor’s opinion identifies the applicable financial reporting framework on which the financial report is based. When the applicable financial reporting framework is not Australian Accounting Standards, under paragraph 46 of this Auditing Standard, the auditor’s opinion also needs to identify the jurisdiction or country of origin of the applicable financial reporting framework. The auditor ordinarily identifies the applicable financial reporting framework in such terms as:
“… in accordance with Australian Accounting Standards”; or
“… in accordance with accounting principles generally accepted in Country X …”.
49 When the applicable financial reporting framework encompasses legal and regulatory requirements, the auditor ordinarily identifies the applicable financial reporting framework in such terms as:
“… in accordance with Australian Accounting Standards and, when appropriate, other relevant statutory or other requirements”; or
“…in accordance with accounting principles generally accepted in Country X and the requirements of Country X Corporations Act”.
49A When an entity, in accordance with Accounting Standard AASB 101 Presentation of Financial Statements, has included in the notes to the financial statements, an explicit and unreserved statement of compliance with International Financial Reporting Standards (IFRSs), and the auditor agrees with the entity’s statement of compliance, the auditor shall state that in the auditor’s opinion, the financial report complies with IFRSs.
49B With respect to the requirement in paragraph 49A, Appendix 2 to this Auditing Standard provides illustrations of an auditor’s opinions—see Example 1: Unmodified Auditor’s Report Prepared under the Corporations Act 2001—Single Corporate Entity; and Example 2: Unmodified Auditor’s Report Prepared under the Corporations Act 2001 – Consolidated Entity.
49C Auditing Standard ASA 701 Modifications to the Auditor’s Report provides mandatory requirements and explanatory guidance when the auditor disagrees with those charged with governance in relation to compliance with the requirements of accounting standards, and this applies to, and includes, AASB 101 requirements.
Other Reporting Responsibilities
50 In some cases, the auditor may have additional responsibilities to report on other matters that are supplementary to the auditor’s responsibility to express an opinion on the financial report. For example, the auditor may be asked to report certain matters if they come to the auditor’s attention during the course of the audit of the financial report. Alternatively, the auditor may be asked to perform and report on additional specified procedures, or to express an opinion on specific matters. When the audit of the financial report is conducted pursuant to the Corporations Act 2001, section 308(3)(b) of that Act requires the auditor to describe in the auditor’s report any deficiency, failure or shortcoming in respect of certain matters referred to in section 307(b), (c) or (d) of that Act.
51 When the auditor addresses other reporting responsibilities within the auditor’s report on the financial report, these other reporting responsibilities shall be included in a separate section in the auditor’s report that follows the opinion paragraph.
52 Under paragraph 51 of this Auditing Standard, the auditor needs to address these other reporting responsibilities in a separate section of the auditor’s report in order to clearly distinguish them from the auditor’s responsibilities for, and opinion on, the financial report.
Auditor’s Signature
53 The auditor’s report shall be signed in one or more of the name of the audit firm, the name of the audit company or the personal name of the auditor, as appropriate.
Date of the Auditor’s Report
54 The auditor’s report shall be dated as of the date the auditor signs that report. The auditor shall date the auditor’s report on the financial report no earlier than the date on which the auditor has obtained sufficient appropriate audit evidence on which to base the opinion on the financial report. Sufficient appropriate audit evidence shall include evidence that the entity’s financial report has been prepared and that those charged with governance have asserted that they have taken responsibility for it.
55 The date of the auditor’s report informs the reader that the auditor has considered the effect of events and transactions of which the auditor became aware and that occurred up to that date. The auditor’s responsibility for events and transactions after the date of the auditor’s report is addressed in ASA 560 Subsequent Events.
56 Since the auditor’s opinion is provided on the financial report and the financial report is the responsibility of those charged with governance, under paragraph 54 of this Auditing Standard, the auditor is not in a position to conclude that sufficient appropriate audit evidence has been obtained until the auditor obtains evidence that a financial report has been prepared and those charged with governance have accepted responsibility for it.
57 The auditor’s report on a financial report prepared pursuant to the Corporations Act 2001 is required by that Act to specify the date on which the auditor’s report was made.
Auditor’s Address
58 The report shall name the location in the country or jurisdiction where the auditor practices.