Report on the Audit of the Financial RepReport on the Audit of the Financial Report[14]

Report on the Audit of the Financial Report[14]

Qualified Opinion

We have audited the financial report of ABC Entity (the Entity), which comprises the statement of financial position as at 30 June 20X1, statement of comprehensive income, statement of changes in equity and statement of cash flows for the year then ended, and notes to the financial statements, including material accounting policy information, and the declaration by those charged with governance.[*]

In our opinion, except for the effects of the matter described in the Basis for Qualified Opinion section of our report, the accompanying financial report presents fairly, in all material respects, (or gives a true and fair view of) the financial position of the Entity as at 30 June 20X1, and (of) its financial performance and its cash flows for the year then ended in accordance with Australian Accounting Standards.

Basis for Qualified Opinion

As discussed in Note X to the financial report, no depreciation has been provided in the financial report which constitutes a departure from Australian Accounting Standards. This is the result of a decision taken by management at the start of the preceding financial year and caused us to qualify our audit opinion on the financial report relating to that year. Based on the straight‑line method of depreciation and annual rates of 5% for the building and 20% for the equipment, the loss for the year should be increased by $xxx in 20X1 and $xxx in 20X0, property, plant and equipment should be reduced by accumulated depreciation of $xxx in 20X1 and $xxx in 20X0, and the accumulated loss should be increased by $xxx in 20X1 and $xxx in 20X0.

We conducted our audit in accordance with Australian Auditing Standards. Our responsibilities under those standards are further described in the Auditor’s Responsibilities for the Audit of the Financial Report section of our report. We are independent of the Entity in accordance with the ethical requirements of the Accounting Professional & Ethical Standards Board’s APES 110 Code of Ethics for Professional Accountants (including Independence Standards) (the Code) that are relevant to our audit of the financial report in Australia. We have also fulfilled our other ethical responsibilities in accordance with the Code. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our qualified opinion.

Responsibilities of Management and Those Charged with Governance for the Financial Report[15]

[Reporting in accordance with ASA 700 – see Illustration 3 in the Appendix of ASA 700.]

Auditor’s Responsibilities for the Audit of the Financial Report

[Reporting in accordance with ASA 700 – see Illustration 3 in the Appendix of ASA 700.]